Serial No. 105-143


Printed for the use of the Committee on Education

and the Workforce

Table of Contents





Appendix A Ė Written Statement of the Hon. Charlie Norwood *

Appendix B Ė Written Statement of Suzanne B. Seiden *

Appendix C Ė Written Statement of Andrew J. Samet *

Appendix D Ė Email Message from Jonathan Kronheim, October 23, 1996 *

Appendix E Ė Email Message to Andrew Samet, October 23, 1996, 3:23 pm *

Appendix F Ė Email Message from Andrew Samet, October 23, 1996, 5:38 pm *

Appendix G Ė Email Message from Campaign for Labor Rights, February 24, 1998 *

Appendix H Ė July 31, 1998 US Department of Labor Press Release: U.S. Labor Department Releases Quarterly Garment Enforcement Report *

Appendix I Ė March 6, 1998 List of Fashion Trendsetters *

Appendix J Ė September 10, 1998 List of Fashion Trendsetters *

Appendix K Ė Garment Enforcement Report: January 1998 Ė March 1998 *

Appendix L Ė January 31, 1997 US Department of Labor Press Release: Labor Department Extends Guess? Inc. Probationary Status on Trendsetter List *

Table of Indexes *

Thursday, September 10, 1998


U.S House of Representatives

Committee on Education and the Workforce

Subcommittee on Oversight and Investigations

American Worker at a Crossroads Project

Washington, D.C.






The subcommittee met, pursuant to notice, at 10:07 a.m., in Room 2175, Rayburn House Office Building, Hon. Charlie Norwood [vice chairman of the subcommittee] presiding.


Present: Representatives Hoekstra, Norwood, and Mink.


Staff present: Jan Faiks, American Worker Project Director

Stevan Johnson, American Worker Hearing Coordinator/Office Manager

Arturo Silva, American Worker Media Relations Assistant

William Matchneer, American Worker Project Chief Counsel

Stephen Settle, American Worker Project Counsel

Kimberly Reed, American Worker Project Counsel

Beth Wallinga, American Worker Project Staff Assistant

Peter Wucetich, American Worker Project Intern

Mark Rodgers, Workforce Policy Coordinator

Cindy von Gogh, Calendar Clerk


Mr. Norwood. [presiding] A quorum being present, the subcommittee of the Committee on Education and Workforce will come to order.


The subcommittee is meeting today to hear testimony for the American Worker at a Crossroads Project. Under Rule 12(b) of the committee rules, any oral opening statement at the hearing is limited to the chairman and ranking minority member. This allows us to hear from the witnesses sooner and helps members keep to their schedules. Therefore, if other members have statements, they can be included in the hearing record. Witnesses should be advised that any additional information or testimony that they would like to have entered in the hearing records may be done in the next 10 days.


I would like to make an opening statement, after which I will ask Mrs. Mink to do the same.




Good morning. Welcome. Today the subcommittee will conduct the third in a series of hearings that focuses on regulatory practices at the United States Department of Labor.


At issue are policies that include the use of adverse publicity to achieve agency objectives that are often unclear. The vehicle for this publicity, we have learned, are "good guy" or "bad guy" lists of companies that either agree to behave as the agency desires or refuses. Concern rests in the fact that these regulatory objectives seem to exceed the requirements of law.


At the first hearing I held on this subject last May 8, 1998, I stated that before making any judgment on the Departmentís decision to publish "good guy" or "bad guy" lists, this subcommittee was obliged to get the facts. As I envisioned the process, the facts we sought surrounded two general questions.


First, whether the decision-making process surrounding the administration on these lists was being exercised fairly and even-handedly. And second, whether procedural protections were in place to keep the decision-making neutral and free from arbitrary conduct.


At the previous hearings, I was disappointed to hear the concerns of administrative law scholars regarding the lack of procedural protections. I was more distressed to learn that these theoretical concerns were supported by specific examples of procedural defect that actually affected trade and commerce.


For instance, we learned that decisions concerning who would be honored as a good guy were made in a star chamber-like setting, with no records of the deliberations. Decisions were made to remove at least one company from a list and thereby, through the inferences of adverse publicity, inflict severe damage to their competitive posture in the free market. No one at the Department of Labor is aware of how many meetings occurred. No one is aware of what items were on the agendas for these meetings. And no one is aware of how decisions to exclude companies were made.


More shocking was the admission of the Department of Labor that decisions with adverse and/or positive effects on the regulated community could have been influenced by outside parties, such as the unions or public interest groups. That these groups would try to influence the process can be expected. That the senior DOL administrator of a government program would not know if this had occurred, however, as we have learned at a previous hearing, and that the government had purposefully omitted procedures intended to prevent the possibility of outside influence is very, very troubling.


More concern stems from hundreds of pages of ex-partite communications regarding the Departmentís administration of these programs. Before the last hearing, I asked the Labor Department to provide the specific communications it had received from outside interests trying to influence their decision-making. The evening before the hearing, one-week late, the Department sent over a large box of materials. The volume of this material did not surprise me. I expected that the unions and other interest groups were involved in ex-partite communications.


A few weeks ago, I asked the UNITE union to please send me copies of specific communications they had made with the Labor Department. And guess what? There were many communications to many people like the Secretary of Labor that had not been furnished by the Department itself, despite my specific request for those materials.


Thinking that this was odd, I sent yet another request to the Labor Department asking for the communications that they might have missed. Another hundred or so pages showed up a few days later with a light note that basically said, oops, we missed a few.


This, of course, occurred after Mr. Fraser, the Acting Wage and Hour Administrator, told me at a hearing that he could not be sure whether the ex-partite communications such as these had influenced the decision-making process.


So I am very uneasy about the facts that have been revealed to date concerning the administration of the Trendsetters program at the Department. At the conclusion of the first hearing in this series, I stated that there could be a giant chasm between noble purpose and actual practice. As we begin this hearing, I am more convinced than ever that Congress must vigilantly oversee the operations of agencies to ensure that objective rather than subjective decision-making steers the publicís business.


I hope that the information we will receive today will shed further light on this question of fairness at the U.S. Department of Labor and address some of the concerns that have arisen from our previous hearings.


To maximize the chance that this happens, I will proceed with two specific objectives for this hearing. First, we want to delve deeper into the role that ex-partite communications played in the administration of the Trendsetters list, as list described by even the DOL as a "good guy" list. Second, we want to explore the role played in the administration of this program by the International Labor Affairs Bureau, an office that reports directly to the Secretary of Labor and has no domestic enforcement authority. We are interested to see how this Administrationís overseas policies may overlap with the various domestic enforcement programs at the U.S. Department of Labor and the degree to which the overlap may exceed statutory authority.



See Appendix A for the Written Statement of the Hon. Charlie Norwood



I will now introduce the panel. I need to remind our witnesses that they have been invited to speak for five minutes before the subcommittee, but as I mentioned earlier, they may submit additional copies or information for the record if they see fit to do so.


We are very fortunate to have this group of people with us today who will share with the subcommittee some of their thoughts and experiences, and I do sincerely thank you for coming. We will pose questions after all the members of the panel have completed their testimony.


Before receiving your testimony, we will ask the witnesses to take an oath. You should be aware that it is illegal to make a false statement to Congress under oath. In light of this, will you please rise and raise your right hand.


[Witnesses sworn.]


Let the record reflect that each of the witnesses has answered in the affirmative.


Suzanne Seiden is our first witness. She currently is the Acting Deputy Administrator for the Wage and Hour Division. She testified at our last hearing on the Trendsetters List, and we are very pleased, Ms. Seiden, that you have joined us again this morning. If you will begin with your five minute testimony, then we will go to Mr. Samet.





Ms. Seiden. Thank you, Mr. Chairman, for again inviting the U.S. Department of Labor to testify about the Trendsetter List, a strategy we have used to recognize companies in the garment industry that have taken steps to show their commitment to protecting the rights of the workers who sew the clothes Americans buy and wear.


As we have testified at two previous hearings on this subject, I will limit my remarks today to review the strategic framework within which the Trendsetter List was conceived.


As you know, the Department of Labor is responsible for achieving compliance with the minimum wage, overtime and child labor requirements of the Fair Labor Standards Act and several other labor laws. To meet this very substantial challenge in the U.S. garment manufacturing industry, the Department has developed and implemented an innovative and effective strategy to bring long-term solutions to the problems confronting garment workers.


Our "No Sweat" initiative is a multi-prong strategy of enforcement; education to encourage and increase voluntary compliance; partnerships to involved all segments of the industry: contractors, manufacturers, retailers, consumers, and worker representatives; and recognition of exemplary steps being taken to promote or achieve compliance with the law.


The "No Sweat" initiative is designed to increase compliance in the garment industry by leveraging Wage and Hourís limited resources. We believe that our "No Sweat" strategic approach is the best way to increase compliance and protect workers.


The focus of todayís hearing is again on the Departmentís Trendsetter List, developed as part of the recognition prong of our "No Sweat" strategy. Many manufacturers and retailers urged us to not just highlight the bad actors in the industry, but to find a way to acknowledge the companies that were taking extra steps to increase compliance in the industry. The Trendsetter List was intended to advance voluntary compliance with the law by recognizing companies whose efforts could help to increase compliance with worker protection laws.


The list was rooted in the firm belief that most companies want to comply with workplace laws and that their commitment is essential to ensure that worker rights and opportunities are respected. By highlighting companies with exemplary workplace practices and the meaningful steps they are taking to ensure that their goods, products, and services are not the result of abusive workplace conditions, we applaud them for their efforts and accomplishments and hold them up for others to emulate.


The Trendsetter List started in 1995 and included companies that pledged to combat sweatshops and that had implemented policies designed to achieve that goal. As we previously testified, to create the list, the Department undertook an outreach effort to inform the industry of the objectives of the list and to invite firms, which wished to be included to submit information supporting their designation as Trendsetters. These outreach efforts were repeated and expanded in 1996 to update the list.


The Department reviewed the submitted information on the basis of four criteria. One, demonstrate commitment to labor laws. Two, cooperate with law enforcement officials when contractors or suppliers are found in violation of the Fair Labor Standards Act. Three, educate suppliers on the requirements of the Fair Labor Standards Act. Four, monitor working conditions at suppliersí work sites.


The last additions to the Trendsetter List occurred in March 1997. Since that time, the list has remained dormant in light of the work of the Apparel Industry Partnership. As you know, the Apparel Industry Partnership, a voluntary, industry-driven partnership of manufacturers, retailers, labor, nongovernmental organizations, and consumer groups, was formed two years ago to develop strategies to address the problems of sweatshops. Last year, the Department decided not to solicit new Trendsetters and to allow the list to remain dormant, anticipating that the work of the Apparel Industry Partnership would provide a more effective vehicle for recognizing companies that take affirmative steps to end worker abuse in the garment industry. Once the Partnership has completed its work, the Trendsetter List will be obsolete. The Department plans to take no steps to update or modify the Trendsetter List.


In closing, I would again like to thank the subcommittee for this opportunity to describe the Departmentís efforts to recognize apparel companies that are committed to promoting and achieving compliance, and like the Department of Labor, are committed to fostering the well-being of their workers.


For better or worse, the companies that violate the law and abuse their workers often appear in the headlines. The vast majority of businesses that try to do the right thing--and in fact, do the right thing Ė go unheralded. The Department is proud of its role in trying to shine the spotlight on some of those companies to applaud them for their efforts and to help them lead the industry by example.


Thank you. I would be happy to answer any questions.



See Appendix B for the Written Statement of Suzanne B. Seiden




Mr. Norwood. Thank you very much, Ms. Seiden. Andrew J. Samet, also from the Department of Labor, is currently Acting Under Secretary for the Department of Labor''s International Labor Affairs Bureau. Welcome, Mr. Samet, and your report, please.







Mr. Samet. Thank you, Mr. Chairman. Just to clarify, I was Acting for an extended period of time, but since February, I have been officially the Deputy Under Secretary.


Mr. Chairman, I would like to begin by thanking you for inviting me here today and providing me with an opportunity to describe the mission of the Department of Laborís Bureau of International Labor Affairs. I understand that you also have specific questions regarding the Departmentís Trendsetter List.


The mandate of the Bureau of International Labor Affairs is threefold. First, to assist in carrying out the Secretary of Laborís international responsibilities; second to help develop Departmental policy and programs relating to international labor activities; and third, to coordinate the Departmental international activities involving other U.S. government agencies, intergovernmental organizations, and nongovernmental organizations. All of these activities have a common purpose, which constitutes the central mission of ILAB: to assist in formulating U.S. international policies and programs of concern to the U.S. workforce.


The Bureau's strategic goals include, first, maximizing the benefits from the international exchange of information on labor market policies. By closely monitoring new ideas and programs developed around the world, particularly in other industrialized nations, and sharing our own best practices, we have worked to promote the welfare of workers and the needs of U.S. employers in a global economy.


Human resource and labor policy concerns are now prominent parts of the agendas of the G-8, the Transatlantic Agenda with the European Union, and the Asia Pacific Economic Cooperation, or APEC, forum. We also work to assure that U.S. interests are reflected in the policies and programs of international organizations, such as the International Labor Organization and the Organization for Economic Cooperation and Development, or OECD.


Second, promoting adherence to core international labor standards. These standards include freedom of association, the right to organize and bargain collectively, the prohibitions on forced labor and exploitative child labor, and non-discrimination in employment.


We promote core labor standards through various means, including through our work in the ILO, where we recently participated in the negotiation of a new ILO declaration on fundamental principles and rights at work and through the implementation of the North American Agreement on Labor Cooperation, the labor supplemental agreement to the NAFTA.


In recent years, ILAB has done extensive work on international child labor, including a 1996 study on the extent to which apparel importers had established and were implementing codes of conduct or other business guidelines prohibiting the use of child labor in the production of the clothing they sell. We also participate in interagency work to implement various U.S. statutes that contain worker rights provisions, such as the Generalized System of Preferences, or GSP program.


Third, we work to support the growth of democratic institutions and creation of free and open markets in foreign countries. This is accomplished through programs that provide labor-related technical assistance to foreign countries. Our recent efforts have included programs in Eastern Europe, Bosnia, and South Africa.



Mr. Chairman, the process of economic globalization provides new opportunities for U.S. workers at the same time that it poses new challenges. In that regard, ILAB is focusing on how to better serve the Department of Labor, as well as employers and employees in the United States, both by learning useful techniques, models, and experiences of other countries, and by representing the priorities of Americans in international fora.


All of the aforementioned goals of ILAB focus on helping to make sure that the United States has a capability to be informed of important international developments in the areas of labor market policy, to work to assure that bilateral, regional, and multilateral agreements concerning labor are in the best interests of the American workforce, and to effectively assure that core labor standards are observed. Authority for the Departmentís and ILABís participation in these and other activities flows from numerous sources, including federal legislation, executive orders, and interagency memoranda.


In previous appearances before this subcommittee on May 8 and June 19, my colleagues from the Departmentís Wage and Hour Division have testified about the Trendsetter List, a list that was developed by the Department in 1995 to recognize U.S. companies that had pledged to combat sweatshops and had implemented policies to achieve that goal. The first Trendsetter List was published in 1995 and was updated in 1996. As my colleagues have testified, the Trendsetter List was conceived as part of the recognition element of the Departmentís "No Sweat" strategy developed and implemented by the Department to bring long-term solutions to the problems confronting garment workers.


Because the Trendsetter List evolved from the "No Sweat" initiative, the Bureau of International Labor Affairs was not significantly involved in the early work on its development, including the drawing up of criteria, dissemination of information about the program, and selection of companies recognized in the first Trendsetter List.


However, the Bureau of International Labor Affairs began participating in the intradepartmental committee that administered the Trendsetter List in the fall of 1996. Two staff members of the Bureau served on the committee at different times during the period from the fall of 1996 forward. Through these staff members, ILAB provided publicly available information regarding labor conditions in overseas operations of corporations being considered for inclusion or already on the Trendsetter List, including information we might have generated from the previously mentioned 1996 study on codes of conduct and child labor, and participated in the decision-making process.



Mr. Chairman, this concludes my prepared remarks. I will be pleased to respond to questions.




See Appendix C for the Written Statement of Andrew J. Samet




Mr. Norwood. Thank you both for your thoughtful testimony. I think it is appropriate for me to say at the outset that I believe all members of this subcommittee agree with your high and noble purposes. The purpose of these hearings is not to question that in any way, but to question the mechanism by which we are trying to achieve these noble purposes.


Ms. Seiden, I will begin with the questions. Could you please tell this committee briefly who Jonathan Kronheim is, please?



Ms. Seiden. He is an attorney that works in the Solicitorís Office.



Mr. Norwood. Mr. Kronheim wrote the following, and I would like to quote, "The kinds of factors the Department will consider to determine whether a firm should continue on the Trendsetterís List are one, the severity of any violations, the swiftness of response, whether a pattern indicates that a monitoring program is not meaningful, and four, what proactive steps have been taken to avoid future violations," end quote.



Ms. Seiden, these are the exact criteria you embraced later that same afternoon on October 23, 1996 in an e-mail sent to Mr. Samet. Is that correct?



Ms. Seiden. I wouldnít be able to say whether that was correct without seeing it, Mr. Chairman.



Mr. Norwood. When was the Trendsetters program begun? It was 1995, wasnít it?



Ms. Seiden. Yes, in the fall of 1995 is when the Secretary of Labor asked us to develop a recognition program, and we developed it in the fall and did outreach in the fall and announced the first list in December of 1995.



Mr. Norwood. So the criteria that the Department would consider to determine whether a firm should continue on the Trendsetters List was developed after the UNITE union requested that one company be removed from the list, is that correct in those dates?



Ms. Seiden. I donít remember the exact dates of when the issue was discussed. I know there came a time when the Department addressed the issue of whether or not, if we had to remove anybody from the list, what would be the criteria. I donít remember the exact dates.



Mr. Norwood. Okay. We are going to hand you the document. All indications are that the Trendsetters Program began in 1995 and the criteria were then set up and agreed to in 1996. Mr. Samet, since you were copied on this e-mail, I assume that you have had some input into these criteria for removal.



Mr. Samet. I donít recall the e-mail, Mr. Chairman.



Mr. Norwood. Do you recall having any input into the criteria?



Mr. Samet. I donít recall any specific discussion of this. It is possible that I was in certain meetings where this question came up, but I donít recall any specific conversation about it.



Mr. Norwood. Regardless of the date, you donít recall having any input into the criteria of removal at any time?



Mr. Samet. I donít recall any specific discussion where the issue of criteria for removal came up. It is possible I was in certain meetings where it did.



Ms. Seiden. Mr. Chair.



Mr. Norwood. Yes, maíam.



Ms. Seiden. The criteria that we developed were developed in 1995. The criteria for removal was the same criteria as it was for inclusion on the Trendsetter List. The information that you handed to me was an elaboration of how to explain what the criteria for removal. Simply put, if a company was not meeting the criteria of the Trendsetter List, those were the same requirements for removal on the list. And those articulations were different ways of saying the same thing, if that is your question in terms of what the criteria was for removal.



Mr. Norwood. Well, we canít go on with this too much, but you said you set criteria in 1995. Was that criteria for removing a company, or did that later come up in 1996 with Mr. Kronheim?



Ms. Seiden. I am not sure of when the exact discussion was about the criteria for removal. What I am sure about is that the same criteria for inclusion on the Trendsetter List was the same criteria for making a determination as to whether to remove a company from the list. And that is whether or not the company was meeting the criteria of the Trendsetter List.



Mr. Norwood. I wish we had Professor Gellhorn or Breger here to address these points in an administrative law context. Developing criteria for a government that decides to do the taking is not very good business, legally speaking. I mean it is, to me, like figuring out the reasons for hanging someone after the hanging has already taken place. Shoot first, ask questions later.



Mr. Samet, can you tell me who Stephanie Swirsky is?



Mr. Samet. Stephanie Swirsky is a Department of Labor employee who, I believe, works in the Office of the Secretary of Policy. I am not sure. She did at the time; she may have been reassigned to another office within the Department.



Mr. Norwood. Let me read you an e-mail transmission to you, Mr. Samet, from Ms. Swirsky. It reads, "I just received a copy of a story concerning company X," and I will not name the company. "The company announced that they will accept the union at their Guatemala plant," and I quote, "I assume this means we are able to now take action on this company vis a vis the Trendsetter List."



Mr. Samet, what does that mean? It sounds a little bit like you might have had veto power over this list. Can you help me understand what her statement was? And I can read it again.



Mr. Samet. I am aware of that particular e-mail reference, Mr. Chairman. It referred to, as you indicated, certain developments in Guatemala related to a question of union recognition and compliance with Guatemalan labor law and what the facts were at that time. I believe I confirmed to her my understanding of those facts, as she asked me.



Mr. Norwood. What does it mean, "now take action vis a vis the Trendsetter List"?



Mr. Samet. I believe that was a reference of whether it was appropriate to place this company on the Trendsetter List.



Mr. Norwood. And did that mean you had veto power over who was on the list? In other words, she was asking you, or getting permission? What did that mean?



Mr. Samet. I donít believe I had veto power, per se. She was asking for my view of whether these developments addressed a situation that had come up in the past concerning that particular company.



Mr. Norwood. Does it sound to you that she was saying these guys are now willing to have the union; so, therefore, weíd better include them on the Trendsetters List?



Mr. Samet. I think what it indicates is there had been information considered in the process sometime before that about this particular situation. The addition of that company had not at that time been added to the list, and was subsequently added to the list later.



Chairman Hoekstra. Mr. Chairman?



Mr. Norwood. Yes, sir.



Chairman Hoekstra. May I ask a question?



Mr. Norwood. I will yield.



Chairman Hoekstra. Mr. Samet, as Iím reading this communication, it sounds to me that Stephanie Swirsky is making a value judgment in that accepting the union was a positive thing. Can you provide me with some background information on that?



Mr. Samet. Certainly. The situation was a well-known, well-publicized event in Guatemala at the time. There had been a number of issues concerning Guatemalan labor law. In fact, we had an ongoing GSP review on Guatemala in terms of worker rights. There was an issue raised as to whether, in this particular case, Guatemalan labor law was being complied with in the context of a certain number of workers seeking union recognition and the right to bargain.


The company itself was very involved in trying to sort out the facts of the situation there, and eventually that situation was resolved and the company recognized the union and I understand it has been allowed to proceed consistent with Guatemalan labor law subsequently.



Mr. Norwood. Mr. Samet, in response to questions previously submitted by the subcommittee, ILAB assured us that the Agency has no enforcement authority. Has this changed since December?



Mr. Samet. I believe we have indicated in the statement what our legal authority is. I would actually want to ask counsel whether we have any enforcement authority per se, but I believe, in general, that we do not have enforcement authority. That would be correct, in the meaning that you are asking.



Mr. Norwood. Does the ILAB have any domestic enforcement authority, or has that changed?



Mr. Samet. I donít believe that we have any domestic enforcement authority.



Mr. Norwood. And that has not changed?



Mr. Samet. I am not aware of any reason why that would have changed, no, sir.



Mr. Norwood. Where does ILAB obtain its intelligence concerning companies conducting in overseas markets? And what procedures are in place for that company to challenge what it believes to be misinformation?



Mr. Samet. Well, are you asking in the particular context of this process, or in general with regard toÖ



Mr. Norwood. In general.



Mr. Samet. Well, we essentially do work related to activities of companies for specific purposes. We donít just, as a matter of course, go out and try to find out about international practices of companies per se.


For example, the 1996 study that I referred to on codes of conduct in child labor, that was a study requested of us by the Congress and it asked us to actually look at practices of major U.S. importers. What we did is we sent a survey to 48 major companies. It was a voluntary survey that was indicated to them; 42 of these companies responded. And what we did in addition was a number of site visits to a number of factories around the world in six countries, a number of which produced for some of these companies that we had surveyed. And we discussed in detail with associations and with individual companies the nature of their answers and documentation.


And in the particular case of study, I am not aware, Mr. Chairman, of any significant criticism of what we said or how we used that information.



Mr. Norwood. That study was turned over to Congress?



Mr. Samet. Yes, it was sir.



Mr. Norwood. Did any of the 43 companies under investigation or under study challenge what was reported in the study? Is there a mechanism for the companies to challenge the report should they think that something in the study is wrong?



Mr. Samet. I would think that if they thought something in the study was wrong, they would have brought it to our attention. In this particular case, I am not aware of any criticism. In fact, frankly, Mr. Chairman, I believe that many companies felt that this document was a very useful public service. It provides a lot of information about the state of activity in this area and it has been, as far as I can tell, a very well-received document, even though, Mr. Chairman, it does provide extensive references to practices of individual companies. It includes the information they gave us in terms of their codes of conduct, their guidelines, their practices, and what we found in terms of how those activities might show up when we went to individual plants that might have been producing for them.



Chairman Hoekstra. Will the chairman yield?



Mr. Norwood. Yes, I will yield.



Chairman Hoekstra. This entire process perplexes me. Allow me to return to the earlier question. What I see ILAB doing, in the case of Guatemala, is looking at labor conditions and making an analysis as to whether a certain company is or is not meeting Guatemalan labor law.



Mr. Samet. I would say, sir, that in the particular case you are referring to, our involvement with the issue of Guatemalan labor law and Guatemalan labor law enforcement was a multiyear involvement related to an ongoing GSP review in terms of worker rights compliance there.


The focus of our concern would have been whether the Guatemalan labor officials were, in fact, complying and enforcing the law.



Chairman Hoekstra. So we here in Washington at the Labor Department are determining whether Guatemalan government officials are enforcing their labor law. Then, we take that information and apply it domestically to establish who may or may not be on a Trendsetters List.



Mr. Samet. I think what we were doing there, sir, was, as we do in numerous countries, we look at labor law practices and enforcement under various statutes and under various studies that we are asked to do. In the context of our involvement in the International Labor Organization, the ILO looks extensively at labor practices and labor law enforcement in countries around the world.


I think what occurred in the case that you are referring to is that information involving this particular situation was a part of the information that was considered in making a decision related to a particular company in the list. But it was not necessarily the information that was generated or sought as a consequence of that process. It was information that we had that was publicly available information that was relevant to the individual company situation where this was occurring.



Chairman Hoekstra. Thatís one heck of a process. Publicly held information, I assume, are what? Newspaper reports, general government information? And what I have heard you say is that the Department of Labor took publicly available information and determined whether Guatemalan law is being enforced, and then used that information to help influence and decide whether a company would be on a Department of Labor Trendsetter List. Yes or no?



Mr. Samet. I donít think thatís exactly what I said, sir. What I saidÖ



Chairman Hoekstra. Iím trying to get an answer. Iím trying to sift through what you are saying, because I donít understand it. Did you use the information or not to help influence who and who is not on our Trendsetter List?



Mr. Samet. What we used was the information that there was a certain labor dispute at this particular company. That information was publicly known and the fact of thisÖ



Chairman Hoekstra. And a labor dispute is bad and the company is wrong?



Mr. Samet. I am not saying the company was right or wrong. I am not saying a labor dispute is necessarily good or bad. In this particular case, what Iím saying is there was a situation involving the question of whether a group of workers were being able to exercise their legal rights. And that was subsequently resolved and this company was subsequently added to the list.



Chairman Hoekstra. But you are making judgments as to whether Guatemalans are enforcing their labor law or not, and then you are using that information to apply it to domestic decisions coming out of the U.S. Labor Department. Thatís quite an awesome responsibility to go in and drop our holy water on them and saying, you are doing it right or youíre not.



Mr. Samet. Again, I don't think thatís exactly what I was saying.



Chairman Hoekstra. Are you using the information or not? You are researching what is going on in Guatemala, correct?



Mr. Samet. We research what is going on in many countries of the world, sir. It is part of what we do. We are asked to do it many times by the Congress itself. The International Labor Organization, of which we are a member, does this extensively and reports on whether labor laws, one, meet international standards, and two, are being effectively enforced in countries.


And there is an extensive history within the ILO itself on the question of Guatemalan labor law and practices. There was extensive record of problems in that regard, everything from the murder of trade unionists to other types of problems. Guatemala has gone through an important period of reform, but there is an extensive background on many countries around the world, sir, on labor practices.



Chairman Hoekstra. It is one thing to evaluate and determine on a broad basis that Guatemala is or is not enforcing labor laws that are meeting generally established international guidelines established under different treaties or trade agreements.


It is an entirely different situation when the Department of Labor takes that determination from an international treaty or a trade agreement and applies it to some little Trendsetter List. Then saying, thereís a dispute in Guatemala, the company is wrong, and therefore, we are not going to put them on a Trendsetter List. Wow, what a major leap of faith and what a major responsibility for the U.S. Department of Labor to get involved in a single trade dispute in Guatemala and pick a winner and loser and then pick a winner and loser here in the U.S.


Where in international trade agreements does the Trendsetter List come up? Where is the statutory authority allowing for the use of those criteria for establishing a Trendsetter List in the U.S. for one particular company?



Mr. Samet. Sir, what I think the Department was doing, and appropriately doing, was considering information that came to its attention about an international situation involving countries that had voluntarily come forward as applicants for the Trendsetter List.


I think it was foreseeable to many companies that the question of international issues could arise. And I think the Department appropriately considered this information in this process. There were not that many instances; there were not that many cases where this type of situation arose. But I think the Department appropriately considered the information before it on this question.



Chairman Hoekstra. I am glad you think it is appropriate, because you did it. I donít. If the Department is going to take individual labor decisions in Guatemala and you are going to start impacting businesses and employees in the U.S. then youíd better do it for Guatemala, youíd better do it for Panama, youíd better do it for Brazil, youíd better have it for Argentina.


Because if you are going to start taking on that responsibility, youíd better do it right and youíd better not just go around the world and pick a case here and pick a case there. You are either going to do it right or youíre not going to do it at all.


I donít think you have the resources, and Iím sure you donít have the statutory authority to do that. You have way overstepped the bounds of what ILAB can do and what we in the U.S. Department of Labor should be doing. It concerns me greatly.


I will yield back. Thank you, Mr. Chairman.



Mr. Norwood. Mrs. Mink.



Mrs. Mink. Thank you very much.



Mr. Norwood. You are recognized for a while.



Mrs. Mink. Pardon?



Mr. Norwood. You are recognized for a while, maybe longer than five minutes if you want it.



Mrs. Mink. For a while. All right, thank you, I appreciate that; it may be a long while. I apologize for missing the initial testimony of the two witnesses here today, but customarily our caucus meets at 9 o'clock and today was an especially important caucus that I could not miss. So I apologize for being late.


The inquiry that, as I stepped into the room to listen, is very interesting. I wanted to back up a bit and get some perspective about your responsibility as the Deputy Undersecretary for International Affairs in the Department of Labor. When was this particular function created? Whatís its general purpose, and the extent of your jurisdiction which is now under question in terms of your participation in the Trendsetter List? Can you give us sort of a back-up history for the record in terms of when this function was established in the Department of Labor and what the purpose is?



Mr. Samet. Thank you, Congresswoman. Yes, the international function of the Department goes back to about 1947. The current Bureau was created in the 1950ís. As I indicated in the testimony, there are various authorities for the Bureauís activities. Among the things that we do are those consistent with the responsibilities of the Secretary of Labor with regard to the Trade Act of 1974 and other trade legislation. The Joint Resolution of Congress in 1934, which had the United States joining the International Labor Organization has the Secretary of Labor as the Presidentís representative to that organization.


In my capacity, I am the U.S. representative to the governing body of the International Labor Organization. There are other immigration acts where there are activities of the Bureau involved Ė the NAFTA Implementation Act and the North American Agreement on Labor Cooperation. The NAFTA Labor Supplemental Agreement is something that is implemented by my Bureau.


There are responsibilities we have under the Foreign Service Act, the Foreign Assistance Act related to our work with the Department of State in terms of the activities of labor officers abroad.


And, in addition, I would say that in recent years, there has been very positive interest from the Congress in the work we have done in terms of international child labor reporting and other kinds of labor concerns. So these are some of the activities and the basis for them.



Mrs. Mink. Given the history and jurisdiction and functions over 50 years plus in this area of international labor, with reference to the subject matter of this hearing, how did it happen that your office got involved in enforcement of domestic labor laws, such as a thing like the Trendsetter?



Mr. Samet. I donít actually believe that we would say this is enforcement of domestic labor laws. This is a voluntary recognition program. ILABís participation in this was essentially in the process of assisting the overall effort, given the nature of the growing interest in international labor conditions and the importance of the garment industry, which is really an industry that is half domestic, half international.


We believe that it was appropriate for us to be working in collaboration with other agencies in the Department on these questions, given, as I said before, the request that we had from Congress to do more work in the area of the apparel industry internationally and the labor standards question.



Mrs. Mink. So you were invited then to make your comments with reference to the people that were on the list or not on the list or whatever in reference to their overall experience in international markets. That was your role?



Mr. Samet. Well, I would say our role was, particularly in 1996 in the second phase, we joined the committee as one of the committee members in the Trendsetters process. I would say a particular effort that we made would be to provide information within that process that we had generated either through the 1996 study that I talked about that looked extensively for the first time--I mean I think it was a study that had never been done before, but looked extensively for the first time at the issue of codes of conduct. As I said, we had surveyed 48 companies; 42 companies responded to that process. So that type of information.


Other types of publicly available information that we might be aware of related to labor concerns in a particular instance and the individual case that has been raised before about the situation in Guatemala. I should note that within that process I donít believe that the international questions arose as a significant controversial factor in very many cases. It was only in a few cases that these issues required extensive consideration.



Mrs. Mink. The inquiry has been made with reference to Guatemala. Were there other countries or practices that were reported in the general discussions you had with the Trendsetter group?



Mr. Samet. Not in that sense. I believe there were really only two or three examples where international issues per se were raised to the level or whether it was appropriate or not appropriate for a company at a particular point in the process to be put on the list.



Mrs. Mink. So, in essence, you are saying there are one or two. Which was the other country besides Guatemala?



Mr. Samet. It was not a country example, per se. It was other types of issues or practices.



Mrs. Mink. In any of these discussions with the Trendsetters, were there example of gross violations of child labor laws in these countries?



Mr. Samet. Again, there certainly would be child labor concerns in a number of countries, but the Trendsetter process was looking particularly at the activities of Trendsetter applicants, companies who had put themselves forward as potential Trendsetters. So I would say no, in a general sense, there was not extensive concern that there was illegal child labor being used in Trendsetter candidates.



Mrs. Mink. In the Guatemalan incident, was there any child labor consideration?



Mr. Samet. I donít believe that that was the particular issue. It was more, as weíve discussed beforeÖ



Mrs. Mink. I just have one final question of Ms. Seiden. What is the status of the Trendsetter List now?



Ms. Seiden. The Trendsetter List is dormant and has been. The last time we added any Trendsetters was in March of 1997. In the fall of 1997, the Department made a decision to keep the Trendsetter List dormant and await the conclusion of the Apparel Industry Partnership.



Mrs. Mink. This is at the request of the industry or simply a decision by the Department?



Ms. Seiden. It was a decision that the Department made in consultation certainly with the voluntary group of the Apparel Industry Partnership that was conducting its work.



Mrs. Mink. Thank you.



Mr. Norwood. Mrs. Mink, thank you very much. We will recess for 15 minutes to go vote and come right back. One vote.





Mr. Norwood. The committee will come to order. With that, I will recognize Mr. Hoekstra.



Chairman Hoekstra. I thank the Chair for yielding. I would like to make just a couple of comments. I want to clearly state for the record that in no way does this subcommittee or do I, as Chairman of the subcommittee, recognize the authority of the Labor Department to form a Trendsetter List.


I do not concede that Congress has ever given the authority to the Labor Department for this type of activity. Then, to extend its authority by incorporating into judgments on domestic companies our ability to interpret the effectiveness or the adherence to international labor law as criteria for the Trendsetters List. This practice goes way beyond the realm of what is an appropriate role for the Department of Labor.


With that said, Mr. Samet, would you please identify the two or three other cases where international law or international issues played a major role in identifying who should and should not be on the Trendsetter List.



Mr. Samet. Thank you sir. I would be happy to respond to that, obviously. If I could, I would like to just make a couple of additional comments related to that. I think it is important to note, sir, that one, this was a voluntary program that companiesÖ



Chairman Hoekstra. I donít.



Mr. Samet. Secondly, if I could sir, I understand a number of companies themselves came forward and put on the record as part of the information they gave the Department, their international activities in regard to labor standards. Third, that I would think that, given the situation, it was appropriate for the Department to take into account other types of international information. As I think one of my colleagues previously raised here, to have ignored, potentially by definition, any international issues, if serious issues existed, it might potentially have made the other members of the Trendsetters List uncomfortable with the fact that a company was added where very serious issues had been raised about them in an international context. So by definitionÖ



Chairman Hoekstra. I think we have agreed to disagree. We have agreed to disagree about the Labor Departmentís ability to establish a Trendsetters List and we disagree on the appropriateness of doing it. We could hammer you all day on the effectiveness of it, but thatís not the issue.


The issue is the appropriateness of establishing a Trendsetters List and on this level, it was inappropriate. If, at some point in time, the Department wishes to debate this point, then we will discuss its effectiveness. I cannot believe the way the Department has applied standards and thinks it has the ability or this role to interpret how other countries and companies are meeting their labor law. It is beyond me.


I want the other two or three cases that you mentioned where the international information played a significant role in whether a company was on a Trendsetter List or not.



Mr. Samet. I would be happy to do that. I would prefer not to mention the companies by name, if that is acceptable to you, sir.



Chairman Hoekstra. Itís acceptable at this point.



Mr. Samet. So I will try to find another way of indicating that. I believe there was one case, which occurred in the 1995 process, and there was one additional case in the 1996 process, as I indicated, where international issues and concerns were considered relevant to the decision.



Chairman Hoekstra. What countries? What issues? What is going on here?



Mr. Samet. I donít know whether my colleague wants to comment in more detail on this in terms of the 1995 decision. I believe it was a situation involving a plant in El Salvador, and in the 1996 situation, it was a number of more general types of issues about labor practices overall.



Chairman Hoekstra. I am assuming that in the document request we sent to the Labor Department that we have received all the background information on those two, as well. Have we requested that information?



Mr. Samet. I believe the Department has responded to your request.



Chairman Hoekstra. Counsel is informing me that we donít have information on those two cases. Would there be documents that exist on that? Do you think that you have sent those to us?



Ms. Seiden. On any information that we had on those particular cases.



Chairman Hoekstra. We will check. My time has expired. I yield back to the Chair. Thank you.



Mr. Norwood. Thank you, Mr. Hoekstra. Mr. Samet, does Ms. Sonia Rosen work at ILAB?



Mr. Samet. Yes, sir.



Mr. Norwood. Are you familiar with an organization called Campaign for Labor Rights?



Mr. Samet. I believe that refers to an organization which I have seen a number of their Internet messages.



Mr. Norwood. I have before me e-mail sent to Ms. Rosen from the Campaign for Labor Rights, and it will be before you in just a second. The subject of the e-mail to Ms. Rosen from the Campaign for Labor Rights is, and I quote, "pressure retailers of GUESS." It asks that whomever receives the e-mail communicate concern to two of GUESSí most important customers, Federated Department Stores and Dayton Hudson Corporation.


Mr. Samet, what did ILAB do with this information that came from the Campaign for Labor Rights?



Mrs. Mink. Mr. Chairman, may we have a copy, too, please?



Mr. Norwood. Of course.



Mr. Samet. I am not aware of any particular action taken about this specific e-mail. Ms. Rosen monitors this Internet process and she forwards me a number of messages of this type and information of this type, some of them related to GUESS and some of them have been related to various other types of issues that this organization.



Mr. Norwood. Do you recall that Ms. Rosen received a series of e-mails from the Campaign for Labor Rights Ė eight or nine, which were sent on to you, I presume, from Ms. Rosen?



Mr. Samet. Yes, I am aware that a number of those have been provided to you.



Mr. Norwood. Were they provided to you from Ms. Rosen?



Mr. Samet. I am sure that they came over my computer and that I probably saw them at the time, yes, sir.



Mr. Norwood. Were you aware, Mr. Samet, that each of these e-mail communications came during the period of time that the Department of Labor was supposed to be reviewing the status of this company following their being placed on probation from the Trendsetters List? Did that time frame lock in for you?



Mr. Samet. I was certainly aware, Mr. Chairman, that the issue of GUESSí status was being discussed within the Department and it is quite possible, and even likely, that some of these came during the time when this issue was being discussed within the Department.



Mr. Norwood. Well, itís not just possible. It did. Many of these communications were concerning accusations by the Campaign for Labor Rights that a certain company was going to move its operation overseas. You shared these communications with others at the Department, didnít you, Mr. Samet?



Mr. Samet. These particular e-mails? I donít recall that I did.



Mr. Norwood. Ms. Seiden, did you read any of these communications in question from the Campaign for Labor Rights?



Ms. Seiden. I donít recall whether I did or not.



Mr. Norwood. Is it purely coincidence, Ms. Seiden, that these communications from the Campaign for Labor Rights was followed by a letter from you and the Wage and Hour Division stating, and I quote, "The Department recently learned that company Z intends to move business to foreign locations. We would like to receive information regarding this, as it is in keeping with another criteria for inclusion on the Trendsetters List, a demonstrated commitment to labor law."


Ms. Seiden. My letter was not written based on those communications.



Mr. Norwood. What, then, was that letter based on?



Ms. Seiden. We at the Department learned that there were charges filed at the National Labor Relations Board alleging violations of a core labor act with respect to that particular company. And because of those charges filed, and we were unable to evaluate those charges, we made a determination to keep the company on probation based on that information.



Mr. Norwood. All right. Let me go back and give you your quote. "The Department recently learned that company Z intends to move business to foreign locations. We would like to receive information regarding this, as it is in keeping with another criteria for inclusion on the Trendsetters List." That is a separate statement than the one you just made. Is moving your business to foreign locations part of the criteria for not being on the Trendsetters List?



Ms. Seiden. Absolutely not. That company was not maintained on probation because it moved its operations overseas. In fact, many companies that had operations overseas were Trendsetters. In that particular case, an issue was before the NLRB as to whether or not a particular company moved overseas to avoid compliance with U.S. labor laws, which is referred to as a runaway shop. That is a various charge that was filed and accepted at the National Labor Relations Board.


So, as I said, in general, many, many companies had overseas practices. In this particular company, a question was raised as to whether or not the company specifically moved overseas to avoid compliance with our laws.



Mr. Norwood. My time is up, but Iíd like to comment that this was not a company that had moved overseas. It is a company that was considering moving overseas, and obviously, the fact that they were considering that affected the Trendsetters List.


With my time up, Mrs. Mink, Iíd like to recognize you.



Mrs. Mink. I have no further questions, Mr. Chairman, except to comment that certainly the Department seems wholly justified in making their recommendation based upon complaints that were officially filed with the NLRB, and that is what the witness has said. So I donít see any point to further inquiries in that direction. Thank you.



Mr. Norwood. That may be exactly right in terms of the complaints, but this is a separate letter, a separate discussion, about a company simply moving or considering moving overseas, which is a different subject than complaints before the National Labor Relations Board.



Mrs. Mink. Will the chairman yield that point.



Mr. Norwood. I will.



Mrs. Mink. It seemed to me that the answer, the response was that the move to another country was for the specific purpose of ignoring the compliance with specific rules in terms of a runaway shop description, which she offered in answer to your question.



Mr. Norwood. That would be fairly presumptuous to think you know exactly why a company would make a serious decision to move its plant out of America into another country.



Mr. Hoekstra.



Chairman Hoekstra. Ms. Seiden, am I assuming that the Labor Department then assumes that a charge or an allegation to the NLRB is a statement of fact, and therefore, the company is guilty?



Ms. Seiden. No, thatís not correct. It is my understanding that when a charge is filed and accepted at the NLRB, that is serious. And these were serious charges raised. One was of the runaway shop; another was retaliation against workers who were organizing. But in no way was the Department able to make a determination that was before another agency.


So, in fact, thatís why the Department decided to maintain the companyís status in a probationary fashion, than to just assume that a company was guilty and simply remove it from the Trendsetter List.



Chairman Hoekstra. So anyone could have filed charges with the NLRB, and any company that had charges filed against them, there would have been assumed serious allegations that would have either warranted them to maintain probation or perhaps to be moved on probation?


Ms. Seiden. I canít say in a hypothetical with respect to any other company other than the company that is being discussed. In general, although I am certainly not an expert on NLRA, but I donít believe that all complaints are merely acceptedÖ



Chairman Hoekstra. I know they are not accepted, no.



Ms. Seiden. But I canít comment on any other company except for this particular one and what the facts and circumstances warranted.



Chairman Hoekstra. Weíre going to go back to Guatemala, because I am troubled by this. Mr. Samet, counsel is going to show you an e-mail that Iíd like you to briefly review.


Let me read a portion of it. Reading on the first or second paragraph that is identified as point one. This is e-mail from you to a series of people at the Department of Labor. "The criteria for the original list as repeated in the current release were designed on the basis of compliance with U.S. FLSA requirements, not on what happens in international production."


If you go down to the fourth paragraph, "in other words, if one discerned from the ILAB reports which companies were doing the most to enforce their codes internationally, it is not clear that all those companies on the Trendsetters List would be included. Indeed, for many of them, we donít know anything."


Earlier you said it was appropriate to include international criteria. With this email, would you reconcile those two statements? Reconcile from what you testified to earlier to the contents of this 1996 email?



Mr. Samet. Certainly, Mr. Chairman. I think Iíd like to put this in the context of the situation at the time I wrote this, and that was surrounding the release of this report, which I had indicated to you that we had just completed on codes of conduct and child labor, focusing on 48 major U.S. importers.


This got very extensively into the question of monitoring processes, transparency issues, et cetera. And the implication of what I am saying is that additional information or the types of information and detail of the type of information that we got in there were not necessarily evident to me in terms of the criteria related to the Trendsetters.


And this was also about the time where ILAB became involved in the Trendsetter committee process. I donít recall whether it was before or after this, exactly, but it was around this time where we became formally involved in the committee process.


I think what I have indicated before is that the nature of the information the Department could have in terms of the domestic situation based on compliance history, based upon involvement with monitoring and compliance agreements, et cetera, was certainly more extensive than the Department could have with regard to international operations.


I have also indicated and it is my understanding this was the case that the applicants for the Trendsetter List provided information to the Department to consider about their international operations. I was not particularly aware of that at the time that I wrote this, having not been extensively involved in that process before this time.


Given that such information had been provided, and given that it seemed to me, and seems to me, that it was appropriate for the Department to consider any other kind of information that came before it related to international practices for some of the reasons I indicated before.


I donít think it would have been appropriate to ignore information that was relevant. The intersect between domestic production and international production grows every day in this industry, and I think the companies themselves saw that there was a relationship between these two situations.


So while I think that my view at the time was the criterion were much more related to domestic types of information, I also believe that the Department's consideration of the information provided by the companies about their international monitoring efforts or codes of conduct issues and whatever information was available to the Department was appropriate in terms of making these decisions subsequently.



Chairman Hoekstra. You are a great soldier. But let me tell you, you were right in 1996. You should consider only compliance with U.S. Fair Labor Standards Act. We donít know anything about international. For you and for this Department to be putting out a Trendsetter List based on somebody filing an NLRB complaint and saying we are going to judge companies on the information that they provided us on international compliance. Give me a break.


In here you are saying we donít know anything. Does the Department just accept it on face value, or did you have to verify it? And if you verified it, what did you verify it with if you didnít know anything about it?



Mr. Samet. As this indicates, Mr. Chairman, ILAB at that time, as I was aware, based upon the work we had done for a number of the Trendsetter companies, we didnít have any particular information. However, I think the Departmentís view was the extent companies were self-selecting themselves to apply for this and were providing the information, in the absence of any other information raising questions or contradicting what they were telling us about their commitments on these practices, that it was appropriate to consider it on that basis.



Chairman Hoekstra. How big is the Department of Labor? How many dollars do you spend annually?



Mr. Samet. How many employees and what is our budget?



Chairman Hoekstra. Yes, your budget.



Mr. Samet. Of the entire Department?



Chairman Hoekstra. Yes.



Mr. Samet. I am embarrassed to say, Mr. Chairman, I cannot tell you. I can tell you the budget of my humble Bureau, but I cannot tell you the Departmentís total budget. I can tell you our budget is a very, very small percentage of the Departmentís overall budget.



Chairman Hoekstra. But this has Maria Echaveste on it. Suzanne, you are on here, Marvin Krislov, Susan King. It is a heck of a way to run a Federal department agency in publishing Trendsetter Lists based on information provided by the companies when the Department itself says indeed, for many of them, we donít know anything.



Ms. Seiden. Mr. Hoekstra.



Chairman Hoekstra. Yes.



Ms. Seiden. If I might add, you have had several hearings about the garment industry and, in fact, heard from many workers about how awful their working conditions are and how abusive the practices are.


The Department made a decision that enforcement alone was not enough to increase compliance in this industry. So what we made a decision to do was to come up with a multi-prong approach. Enforcement is certainly the cornerstone of what we do, but we made a decision that we also had to embark on education of the industry and that we needed to partner with all players in the industry and because of the industry's concerns about being tarnished, we needed to recognize those companies that were trying to do the right thing.


This was a piece of that, and in fact, it was important enough for other people in the Department to focus on this because increasing compliance in the garment industry is one of our major strategic goals for the Agency, and we were trying to look to our resources.



Chairman Hoekstra. Excuse me. Reclaiming my time, I understand that. What we are evaluating here is how well youíve done that. And youíve picked winners and losers, good guys and bad guys, in this industry. I donít know who the good guys and the bad guys are?


I have serious questions and will not concede that you even have the opportunity to use those criteria. Number one, I think the whole thing is suspect. Number two, the way you did it is suspect. And number three is you are using criteria where even you yourselves who are putting this thing in place Ė you were part of this process.


Explain this to me. How can you sit in a committee and decide who is going to be on the list and who is not going to be on the list when the person who is supposed to know more about this than anybody else sends you an email says, "we donít know anything?" And then you decide that you are going to use bits and pieces to determine who is going to be on your Trendsetters List and who is not. That is the question.



Ms. Seiden. First, I would like to again say what I have testified before, which is that the Trendsetter List was not a way to determine who was good and who was bad. It was a list of exemplary companies.



Chairman Hoekstra. Is that good, exemplary companies?



Ms. Seiden. Yes, we hope thatÖ



Chairman Hoekstra. Is that a code of approval by the Labor Department?



Ms. Seiden. I donít know if it was a code of approval by the Labor Department. It was a list ofÖ



Chairman Hoekstra. Pretty nice to have, right?



Ms. Seiden. We hope that companies would think it was nice to have and that other companies would emulate it and that the industry would believe that we were responsive to their request to recognize the good things that we were doing.



Chairman Hoekstra. Excuse me, you said it wasnít a good guy or a bad guy list. I would assume by calling it Trendsetters, that by being a voluntary program, that you believed that there would be a value attached to a company getting on your list, otherwise they would not go through the hassle of getting on the list.



Ms. Seiden. Well, I believe that the Department indicated that there were lots of companies that had good model programs. We didnít know about all of them. We only knew about those companies that voluntarily applied for the list. I donít believe it was a hassle for them to get on. They submitted information in any format that they wanted to for the Department and in fact, a number of companies did want to participate and thought it was good to be held up as a model.


But we did keep all of the information about the applicants confidential because we did not want to give any company a stigma, which did apply to the list. And I think we did a good job of that.



Chairman Hoekstra. Now, answer the question. How can you sit in a committee and in three cases use international criteria as the key criteria as Mr. Samet said? The key criteria or key component of the decision-making; and recognizing that the group that was providing you with that information, recognize that for many of them we donít know anything.



Ms. Seiden. Because with respect to making our determinations, we had criteria. We applied the information we got to see if a company met the criteria. We testified previously that we did accept the companies at their word for what they were doing domestically and internationally. We accepted them at their word. We had different ability to check on what they were doing domestically than internationally.



Chairman Hoekstra. Did you have international criteria?



Ms. Seiden. The international practices were included in our criteria. It had in there Ė it says "demonstrated commitment to labor laws." One of the examples is codes of conduct and it has been testified by several witnesses on the panel, including a company representative, the industry widely regarded codes of conduct to apply to international as well as domestic.


The Secretary of Labor, in sending out a letter inviting companies to participate, talked about the international practices of various companies. The companies voluntarily submitted information and touted their international practices to us, so we did consider that information. We considered all of the information that they supplied to us and all of the other information that was also raised to our attention.


We were not selective on evaluating certain bits and pieces that we would receive from ILAB or anyone else. We looked at all of the information. If we had any questions with respect to companiesí practices, we called that company up and asked them for more information or to explain it to us. So we did apply the criteria in a fair way, I believe.



Chairman Hoekstra. I yield back.



Mr. Norwood. Thank you, Mr. Hoekstra. I will yield myself five minutes for a couple of questions.



Ms. Seiden, my staff met with you last March, and at the time, you informed them that the Trendsetters program was no longer active or they were inactive or they were dormant. Is that correct?



Ms. Seiden. I believe thatís correct.



Mr. Norwood. Mr. Fraser restated that this program was inactive or not active or no longer active or dormant in testimony before this subcommittee last May. That statement was carried in the newspapers, as well as is in the record.


Then, Ms. Seiden, why does the Department of Labor press release dated July 31, 1998, just over one week ago, state that and I quote, "The Department's Trendsetters List highlights retailers and manufacturers that have assumed responsibility for monitoring practices."


You can correct me, but I wouldnít believe you and Mr. Fraser were intentionally trying to mislead us in the last hearing and at our meeting. But explain that press release dated just a few weeks ago.



Ms. Seiden. Would you mind if I could look at a copy? I am not sure which press release you are referring to.



Mr. Norwood. I donít mind at all, but while we are getting it for you, trust me, the quote is "The Department's Trendsetters List highlights retailers and manufacturers that have assumed responsibility for monitoring practices."


While we are getting that to you, I want to go ahead and then come back to that.



Ms. Seiden. Certainly. Iíd just like to see the context of the press release, but I do know that we testified that the list was dormant and that we have not added any Trendsetters or removed any Trendsetters since March of 1997, that we had no intention of doing so. The list is still available with a date on the list.



Mr. Norwood. Ms. Seiden, you are familiar with the meeting my staff had last week with Mr. Perry, your regional administrator in Atlanta, and Mrs. Elizabeth Cepero? Were you aware in advance that your compliance officers and field officers were still recruiting for membership on the Trendsetters List despite the fact that we have been told over and over the program is inactive and dormant.



Ms. Seiden. I donít believe that Mr. Perry or Ms. Cepero were recruiting participants for the Trendsetter List.



Mr. Norwood. Have you put out information from the Washington office to the regional administrators that this Trendsetters List is dormant and they need not recruit?



Ms. Seiden. Our regional administrators understand the status of the Trendsetter List, but the list is still on the Internet for information, sir. The Trendsetter List is still up with a date on it.



Mr. Norwood. The list is still up, but does everybody know that it is dormant?



Ms. Seiden. I donít know if every single person in the Agency knows if itís dormant. However, the process of invitingÖ



Mr. Norwood. Would you say the regional administrators know that it is dormant?



Ms. Seiden. I would hope so. I certainly would just say I would hope so.



Chairman Hoekstra. Mr. Chairman.



Mr. Norwood. I will yield.



Chairman Hoekstra. What does dormant mean?



Ms. Seiden. Dormant means and I believe we have testified that we have no plans to update the Trendsetter List and the Trendsetter List looks now like it did in March 1997. There is a list; it is a way of providing information to people who ask for it. But that is what my understanding of dormant is, that we had no plans to update or recruit for the list. And I donít believe any recruiting has been done.



Mr. Norwood. Reclaiming, explain for the record why one company was chosen over all others to approach in the fast food industry. Why was the Department of Labor trying to form a partnership with chain restaurants to address uniforms?



Ms. Seiden. Part of what our folks do in the field is to develop partnerships with companies to increase compliance, whether it is related to the garment industry or other low wage initiatives, because itís an important strategy to achieve compliance in low wage initiatives.


I believe in this case, our staff took the initiative and I applaud them for it, to try to work with the fast food industry to try to take steps to increase compliance by ensuring that garments are made in compliance with the law. There are no Trendsetters on the list that are fast food establishments. Our Trendsetter List contains footwear and apparel companies.



Mr. Norwood. It appears to those involved that your staff used words like "Trendsetters" and used documents that have previously been used to determine Trendsetters, and they left, I believe, at least in their opinion, that they were being looked at for Trendsetters.


How many citations have been issued for FLSA violations in the uniform industry?



Ms. Seiden. I would have to get you that information, Mr. Chair. I donít know that.



Mr. Norwood. Could you give me a ballpark and then we wonít hold you to it. You can give the exact later.



Ms. Seiden. I couldnít give you a good ballpark example that I would feel comfortable with. I would have to get you that information. But I would like to say that itís unfortunate if a company left a meeting with a particular perception.


I am very confident, and what my understanding is that in no way did staff link their conversations to the Trendsetter List. They may have supplied a bunch of materials that included the Trendsetter List. But we certainly did not consider companies to be applicants unless they wished to be.



Mr. Norwood. Well, I agree with you, it is unfortunate, because someone implied in some form or fashion that it was involved in that. You need to fix your website. It says very clearly that the Trendsetters List is still open on your website.


Ms. Seiden. Youíre right. We do need to fix the website.



Mr. Norwood. Can we count on that?



Ms. Seiden. Yes.



Chairman Hoekstra. Mr. Chairman, I think now might be a good time to close the website down.



Mr. Norwood. We can vote if you want to. I want to return to this uniform issue. I have been told that there have been no violations, at least in the Atlanta region. Why was a company in the South the first contact for what appears to be a pretty sweeping initiative?



Ms. Seiden. Well, I canít say why this particular company in the South was the first contact, other than that staff knew of the company or had previous relationships and thatís where they were located. But part of what various companies--in fact, for instance, the Newark arch diocese called upon the Department for help in ensuring that the uniforms their students were wearing were not made in sweatshops.



Mr. Norwood. New York?



Ms. Seiden. The Newark arch diocese.



Mr. Norwood. Newark?



Ms. Seiden. And other arch dioceses have similarly asked us for help.



Mr. Norwood. These uniforms were being made in Atlanta or in the South, that region?



Ms. Seiden. I donít know where the uniforms were made. I was using that as an example that this particular issue is prevalent around the country. There are many universities that are very concerned about how the sweatshirts that they sellÖ



Mr. Norwood. Okay, I want you to answer this question. It is leading right from where you are talking. Answer it carefully. Did any one interest group contact the Department concerning uniform manufacturing?



Ms. Seiden. Did any one interest group ask us?



Mr. Norwood. Interest groups contact you pretty regularly about all this.



Ms. Seiden. Yes.



Mr. Norwood. Did anybody call up and say, Suzanne, we need to check out this deal down in Atlanta and the Southern District down there about uniforms? Did anybody, any interest group, call or inform or write or e-mail or use any communication of any kind with the Department of Labor concerning uniform manufacturing?



Ms. Seiden. Not to my knowledge, sir.



Mr. Norwood. Will you check on that for me?



Ms. Seiden. Yes, I will.



Mr. Norwood. Are you aware that the uniform industry is an organizing target for the UNITE garment union?



Ms. Seiden. Excuse me?



Mr. Norwood. Would you like to respond? Itís okay. What did he tell you? If he gave you some new information on that, let us know about any interest group.



Ms. Seiden. I was reminded that Duke University had contacted us. I didnít consider that to be an interest group, but they did contact us for help in a code of conduct to ensure thatÖ



Mr. Norwood. When Duke University contacts you, who contacts you? The president or an employee or is it a faculty member? What do you mean, Duke University contacted you?



Ms. Seiden. Duke University, the individual in charge of licensing, contacted me.



Mr. Norwood. In charge of licensing.



Ms. Seiden. Licensing was a very big business for universities.



Mr. Norwood. Okay. Are you aware that the uniform industry is an organizing target for the UNITE garment union?



Ms. Seiden. No, I am not aware of that.



Mr. Norwood. Are you, Mr. Samet?



Mr. Samet. No, sir.



Mr. Norwood. Has ILAB received any communications from its third party sources regarding the shift of uniform manufacturing to overseas concerns, Mr. Samet?



Mr. Samet. I am not aware of any such communications.



Mr. Norwood. Mr. Samet, there are special inspection procedures established under the International Labor Organization convention for examining matters relating to freedom of association, is that correct?



Mr. Samet. I believe you are referring to the Committee on Freedom of Association in the International Labor Organization.



Mr. Norwood. Yes, about inspection procedures. Could you explain those?



Mr. Samet. Well, if I understand your question accurately, Mr. Chairman, which I am not sure I do.



Mr. Norwood. All right, letís make sure we are communicating. The International Labor Organization convention Ė for examining matters relating to freedom of association Ė are special inspection procedures established? Can explain those to me?


Mr. Samet. I am not aware of a special inspection procedure related to the ILO convention on freedom of association. I am aware of a Committee on Freedom of Association, which operates within the ILO that looks at the principle of freedom of association, but not technically tied to the convention as such.



Mr. Norwood. Thatís a little unfair question, it seems to me. Why donít we give you an opportunity to answer that in a little more detail in writing, rather than today?



Mr. Samet. Okay.



Mr. Norwood. Mrs. Mink, I think we are ready to close down. Would you like a period to have closing remarks?



Mrs. Mink. Well, I donít have closing remarks, but I do have a comment to make. With reference to the many points that have been raised about the Trendsetter List, I feel that the establishment of such a list and the criteria that used both domestic and international standards is appropriate, and I think that it served a useful purpose.


It was concurred in by the industry and in fact, probably, as far as I know, suggested by the industry, and implemented by the Department. What I wanted to say was, however, that I do concur with the Chair of the subcommittee, Mr. Hoekstra.



Chairman Hoekstra. Wonderful things happen on break, donít they?



Mrs. Mink. Words like "dormant" are not satisfactory if the Department continues to rely upon its existence. As I understand the query that we have been engaged in for several sessions now, is how does one get on, how does one get off, how does one get probation? There is a continuing review of the relative merits of the people that are on the list, or relative merits of those who are not on the list.


If the practice has been suspended and that is what I have to interpret "dormant" means, then I donít believe the should be exposed to the public in any way. So I wholly concur in the Chairmanís request for the list to be removed from the Departmentís website.


Further, it seems to me that all the facets of this operation within the Department should come to an end and the list should not be used any more. Thatís not to suggest that I feel that the creation of the list is inappropriate or that its continuation is inappropriate. But if the Department has decided that they are not going to make any further evaluations or additions or corrections or suspensions, then it ought not to be there in the marketplace at all.


I would probably have voiced vigorous feelings with respect to its continuation, but having learned that it is suspended since March of 1997, then I am concerned about its continued utilization and particularly the reference that you cited in a press release. I think that is very, very disconcerting and probably kind of disorients the whole industry to have this occur.


So I think that I have to concur with the Chair of the subcommittee in this instance. He may not appreciate that, but thatís my conclusion. Thank you, Mr. Chairman.



Mr. Norwood. Ms. Mink, would you consider joining with Chairman Hoekstra and myself in a letter to the Secretary along these very lines that you just stated.



Mrs. Mink. I reserve the right to read your language, as I usually do, but if it states what I have tried to state, I am more than happy to join that, because I think it is an appropriate conclusion to this matter. I do hope we have concluded this matter on the Trendsetters.



Mr. Norwood. We do, too. Actually, you would have the veto right over that letter as to whether to sign or not. Mr. Hoekstra.



Chairman Hoekstra. Yes, I am sorry we didnít have this ready beforehand, but if you would take a look at your Web page. I believe this list is identified as being dormant since March of 1997. We have one of those copies, you will find, dated at the bottom is 3/6/98. The other was printed off minutes ago on 9/10/98.


Can you perhaps explain to me how Esprit and Phillips Van Heusen have appeared on that list from 3/6/98 to 9/10/98 after you have been telling us that this list is dormant?



Ms. Seiden. Yes, I said the last time companies were added to the list was in March of 1997 and I would have to recollect, at least Esprit was added to it. Iíd have to look and seeÖ



Chairman Hoekstra. March of 1997.



Ms. Seiden. I said that was the last timeÖ



Chairman Hoekstra. We have printouts here of 3/6/98, which is a year from March of 1997. You mean it takes you more than a year to update your Web page?



Ms. Seiden. I canít attest to when the website was updated, and I apologize if thatís when it was updated. But when the website is printed, it shows the date that it was printed; it doesnít show the date that it was updated.



Chairman Hoekstra. I know. I am just saying the list has been dormant since March of 1997. There is a difference in your printout from 3/6/98 to 9/10/98. You mean you added those companies in 1997. Somebody is maintaining this list. It does not appear to be dormant to me.



Ms. Seiden. I canít tell you about the specific dates of when the list was updated or not. I can tell you that the last time we added companies to the list was March of 1997, and those may have been the companies. I was trying to look and see if I had when those companies were added.


I know that the website is periodically updated, and it may not have been updated in as timely a fashion. I would be happy to check on that.



Chairman Hoekstra. Timely? Itís a year.



Ms. Seiden. I canít speak to when it was updated. I would have to get back to you or your staff. What I can affirmatively say is that the last time companies were added to the list was in March of 1997 and that no other companies have been added since that time.



Chairman Hoekstra. I would just ask the Department, if you are going to be part of the Information Age, be part of the Information Age. I would like a response. If it took the Department a year to update its Trendsetter List from the last time that you added companies, shut it down, and you should have never been on the Web.


You are on the Web to communicate information on a timely basis and the Labor Department may have been the first Department that has taken the Web and equated it to the Post Office and made it snail mail. Because if it takes you a year to update the Web, you have just wasted a bunch of money and shouldnít even be on the Web.



Mrs. Mink. Will the chairman just yield for a comment on the Web page issue?


Mr. Norwood. I certainly would.



Mrs. Mink. I agree that the Web page should be exterminated in this instance, but I have to say that Web pages are notoriously outdated. I mean, we believe we are diligent, but most Web pages I have seen are way out of date. So I can understand what happened in the Labor Department and I would urge that they also take steps immediately.



Chairman Hoekstra. Ms. Mink, this is a Trendsetter List.



Ms. Seiden. Mr. Hoekstra, one final pointÖ



Mrs. Mink. It was a Trendsetter List.





Chairman Hoekstra. It was a Trendsetter List, thank you.



Ms. Seiden. I believe there were separate lists of the Trendsetter List that were consolidated, but all the information was on the website as to when companies were added to the list and who were the members.


So there were separate lists and your point is well taken that there should have been one list done in a quicker fashion. But all the information was on the website in separate lists.



Mr. Norwood. Thank you, Mr. Hoekstra.


At the outset of this series of hearings, I voiced my belief that what was at stake was much more than specific initiatives such as the Trendsetters program. At the heart of our inquiry is the process of the American people holding its government accountable. What is at stake is the most fundamental of the rights enjoyed by Americans, the right to question the conduct of its government and obtain truthful answers to that inquiry.


After three hearings on programs such as Trendsetters, "good guy" lists, I find that this subcommittee has been unable to obtain the facts about the administration of these programs. These facts and the truth are so elusive, I believe, because, as we have been told, no concrete records were kept about the deliberations that proceeded the decision-making.


To paraphrase Lewis Carroll in "Through the Looking Glass," the Department seems content in explaining that any specific criteria means exactly what it wants it to mean at that time and in that particular context. Unlike other government decisions, there seems to be no recourse for an effective party, except, that is, for the Robert Reich Catch-22.


The Catch-22 is that the government besmears a company that has failed to follow the Department's arbitrary imposed mandates. The only recourse available to that company following this calculated exercise of adverse publicity is for the company to further call adverse public attention to itself as it seeks legal redress.


In short, it is a lose-lose situation, which dictates that target companies keep very still in order to minimize the damage to their reputation. What disturbs me most is that it seems that these programs have been intentionally designed this way.


In light of these seeming irregularities, the only explanations that I can glean that this subcommittee has received from the Department is that the end of these questionable tactics justify the means. That is, we are told that the only way to end sweatshops is through this new brand of regulatory terrorism.


That explanation doesnít satisfy me very well, nor do the shallow promises I have received that this program has been abandoned or retired. Despite this assurance, we have reason to believe that these tactics continue, perhaps under a different title, maybe under a different name, but with the same fatal procedural flaws having been purposefully kept intact.


I ended this series of hearings by strongly requesting that Secretary Herman have instructions sent to Department of Labor officials throughout this nation ending these programs or instituting strong procedural protections that are preceded by public notice and comment. I ask that I be copied on that instruction to the field officers.


If the Secretary decides that this clarification is not necessary, I strongly request that this subcommittee be notified in writing why this list should remain posted on the Web and appear to be active. Lastly, I will do all in my power in the coming months and in the coming Congress to see a more permanent accountability be brought into these programs.


I want all of you to understand and this is a personal observation that your goal is noble. What you seek to do is right. We all believe we want the labor laws of this country to be obeyed. But how you achieve that end in America is critical. And that is what we are being critical of, not what your intent is and not what you want to see happen.



Ms. Seiden and Mr. Samet, I do appreciate your appearance today. With that, I would like to yield to my friend, Chairman Hoekstra, for a final comment.



Chairman Hoekstra. I would just thank the Chair for yielding. I, too, share the same concerns as the Chair today. I am not convinced the program is dormant. The website was updated as recently as July. That means that there are some people working on this program, and I would like an accounting for who is doing what and has done what on this program since March of 1997.


There are dollars and people that are being expended and I would like to understand what dormant means with the Department of Labor, because it does not mean that activity has stopped. There are people that are working on this project. They are updating Web pages. They may not be updating them timely, but there are people who are working on it. I would like to know who and in what capacity and how much time they are spending on it, because I would like to understand what dormant means, because I think it is different perhaps than what has been outlined. There may not be additions or subtractions to the list, but it is clear that there is work going on in this area. Thank you.



Mr. Norwood. Thank you, Mr. Hoekstra. Yes, maíam.



Ms. Seiden. Weíd be happy to provide you with that information, but I want to make sure it is clear on the record that no work has been done on that. We will give you an accounting of that. The dates on the website are the dates when things are printed and that information was on the website. But we would be happy to get you that.


Mr. Norwood. Ms Seiden, I believe every word of that, that you believe no work has been done. But this is a large country and a lot of people out in the hinterlands may very well be doing work on that that none of us are aware of. At least, that is beginning to be our perception. I would like it to be known by all that any documents referred to today in this discussion will be submitted and inserted into the official record. If there is no further business, this hearing is now adjourned.


See Appendix D Ė Email Message from Jonathan Kronheim, October 23, 1996


See Appendix E Ė Email Message to Andrew Samet, October 23, 1996, 3:23 pm


See Appendix F Ė Email Message from Andrew Samet, October 23, 1996, 5:38 pm


See Appendix G Ė Email Message from Campaign for Labor Rights, February 24, 1998


See Appendix H Ė July 31, 1998 US Department of Labor Press Release: U.S. Labor Department Releases Quarterly Garment Enforcement Report


See Appendix I Ė March 6, 1998 List of Fashion Trendsetters


See Appendix J Ė September 10, 1998 List of Fashion Trendsetters


See Appendix K Ė Garment Enforcement Report: January 1998 Ė March 1998


See Appendix L Ė January 31, 1997 US Department of Labor Press Release: Labor Department Extends Guess? Inc. Probationary Status on Trendsetter List


[Whereupon, at 12:17 p.m., the subcommittee adjourned subject to the call of the Chair.]