Sweatshop Victims Cite Harassment by Bosses : Employment: Workers say their cooperation with a sewing shop crackdown has gotten them blacklisted. The allegations have resulted in another investigation.

SANTA ANA —  Seven garment workers who cooperated with a recent federal crackdown on Orange County sweatshops now say they have been blacklisted, intimidated or forced to give kickbacks to their bosses, prompting a second round of investigations by the U.S. Department of Labor.

In several cases, sewing shop owners who were ordered to make up unpaid minimum or overtime wages wrote checks to their workers but then allegedly forced them to give the money back, said Rolene Otero, director of enforcement for the department’s wages and hours division in Santa Ana.

Another worker said her boss followed her home after she cashed her check and demanded she return the money--a story the boss vehemently denies. The Labor Department has filed suit against the boss, seeking to collect the unpaid wages and forestall any retribution.

Although labor officials have documented widespread abuses in Orange County sewing shops and ordered 18 shops to pay back wages, they are finding it difficult to get the money into the hands of the victimized workers.

“I had employers take employees to the bank, have them sign the (settlement) check, hand the cash over to the employer in the bank lobby, and then sign a receipt saying they got the money,” Otero said. “They (the employers) just told them it was a formality that had to be done and took advantage of the ignorance” of the employees, who were all recent immigrants from Mexico, she said.

Otero said four workers surrendered to their bosses settlements ranging from $300 to almost $2,000.

In addition to those four workers, three others have complained to the department that they have been refused work because they were known to have cooperated with a federal investigation of their former bosses.

Worried that the fear of retaliation will silence other workers, Otero is threatening legal action against anyone who harasses a federal witness.

“I don’t think they understand how powerful the federal government is,” Otero said. “Their refusal to admit that the law applies to them just baffles me. They’re looking for any way around it at all.”

“It’s outrageous,” said Max Mont, a longtime labor watchdog who helped draft the last round of garment industry reform laws a decade ago. “It’s an outright shakedown, not merely a labor law violation. It certainly will have the effect of discouraging any (further) reports of violations if they can intimidate workers out of their rights.”

Alice Callaghan, director of Las Familias del Pueblo, a community and legal aid center for workers in the Los Angeles garment district, said she had heard stories of Los Angeles garment workers being threatened when they tried to collect unpaid wages but had never heard of bosses trying to commandeer government-ordered checks.

Callaghan said such alleged retaliation was “awful” but not particularly surprising. “Owners of factories will stoop to almost anything,” she said. “Otherwise they wouldn’t let people work 55 hours a week for $50 dollars, or let them work for a couple of weeks and then never pay them.”

Under the Fair Labor Standards Act of 1938, employers may not discriminate against or fire employees for cooperating with federal labor inspections, Otero said. Violators face a maximum fine of $10,000 and six months in jail.

“I’ve just got to sit down with these subcontractors and explain to them what the law is and that when they are dealing with the federal government we’re not going to slap somebody’s wrist and go away,” she added.

Fueled by an influx of immigrant labor, about 400 such garment contracting shops have sprung up in Orange County within the last few years, supplying Los Angeles labels with everything from shorts to party dresses.

Most shops are owned by Vietnamese immigrants who themselves toil long hours for paltry profits. They in turn employ Southeast Asian and Latino workers for wages that in some cases are as low as $1 an hour, federal and state labor officials said.

One 7-year-old boy worked hundreds of hours helping his mother sew designer clothes in their Santa Ana home, for wages that averaged $1.45 an hour, federal officials said. The shop owner they worked for signed a consent decree agreeing to repay the family more than $22,700 in minimum and overtime wages owed to them, including nearly $3,200 owed David Valladares, now 8.

The Valladares family still has not received the money. In fact, according to Otero, recalcitrant owners and red tape have delayed payment of most of the $180,000 that 18 shops were ordered to pay to more than 200 other garment workers as a result of the August investigation.

In a second crackdown in October, 14 more shops were inspected, but Otero declined to release details because those cases are still pending.

Otero said several of the shop owners have reached out-of-court agreements with the government under which the employers agreed to begin paying workers properly and keep records to prove it, and were in turn allowed several years to repay the back wages owed their workers.

Some have kept their part of the bargain. For example, Otero’s inspectors found that Vo Ba Cuong, owner of Queen’s Fashions Inc. of Garden Grove, had violated overtime laws. Cuong, who sews junior sportswear for All That Jazz Inc., insisted his employees had not worked overtime. Nonetheless, he said, he signed a consent decree agreeing to pay 14 workers a total of $11,000.

“He came in two days later with a cashier’s check for one-quarter of the back wages and has been paying all his employees with cashier’s checks on the 15th on the dot ever since,” Otero said.

But trying to collect money from several other sewing shops and get it into the hands of the workers has been “a nightmare,” she said.

Two weeks ago, the Department of Labor filed suit against one of the garment contractors, Joanne Fashions of Santa Ana, which made dresses for La Belle Fashions Inc., a junior clothing manufacturer in Los Angeles. The complaint, filed in U.S. District Court in Los Angeles, alleges that the former owners of Joanne Fashions violated federal labor laws and discriminated against workers who told labor inspectors they had been underpaid.

Joanne Fashions was one of 18 sewing shops in and around Westminster’s Little Saigon that were cited for wage and hour violations in the August sweep by federal labor inspectors.

According to Department of Labor internal investigative documents obtained by The Times under the Freedom of Information Act, Joanne Fashions paid workers less than $3.25 an hour, denied them overtime pay and gave 12 workers garments to sew at home in violation of federal and state laws that prohibit home sewing.

Joanne Fashions was sold during the investigation. But former owners Diana Nga Ngoc (Diana) Nguyen and her two brothers agreed in a settlement with the Department of Labor to pay a total of $12,102 to seven former employees, court documents show.

In an interview earlier this month, a sobbing Nguyen insisted that she had been paying the minimum wage all along but that two workers lied to federal investigators in hopes of getting a big cash settlement.

Nguyen nevertheless signed a waiver of the statute of limitations and promised to pay the back wages, an agreement she now says was coerced. As a first installment on the $12,102 owed, Nguyen wrote checks for a total of $3,425 to two workers--Maria Del Pilar Solano and her mother, Liova Martinez, Nguyen and the workers said in separate interviews.

The alleged harassment began, according to Solano, when Nguyen offered to “buy” the checks back for $500 in cash, a story Nguyen denounced as “lies.” Nguyen said that she had lent Solano more than $4,000 and that the mother and daughter had promised to return the money after they cashed the checks. Solano said she borrowed $200 to pay a doctor’s bill but never borrowed thousands or promised to hand over the back wages.

According to Solano, when she and her mother arrived at the bank to cash their checks, Nguyen was there waiting for them. Solano said Nguyen followed them home and demanded they hand over the cash. When they refused, Solano said, Nguyen began to yell and threaten them and demanded they return several gifts she had given them, including clothing for Solano’s children. Solano said she did return the $200 she had borrowed.

Nguyen said she just happened, by coincidence, to be at the bank when the women arrived. She insists she never went to the women’s home, never threatened them and was never repaid the thousands she lent them.

“I was kind to them when they worked for me,” Nguyen said, her face swollen with tears. “When they borrowed money from me, I always gave it to them. . . . They took advantage of me.”

Otero said the alleged incident at the bank and the failure to pay the rest of the money owed prompted the federal suit.

Nguyen, however, alleged that from the first, the labor investigators have been biased in favor of the Latino workers. She charged that Otero has discriminated against her because she is Vietnamese.

“She (Otero) didn’t believe anything I told her,” said Nguyen, speaking in Vietnamese through an interpreter. “She didn’t want to listen to my side of the story.”

“She was treated the same way everyone else was,” Otero said. “She and I had three conferences, and we reduced the back wages by about 30% based on her side of the story.”

What is not in dispute is that Nguyen has made no further payments to the workers. The Labor Department’s suit seeks to force Nguyen and her brothers to pay the rest of the back wages, with interest, and to enjoin them from discriminating against the workers.

No legal action has been taken against La Belle Fashions Inc., officials said, despite a new federal policy of trying to hold manufacturers accountable for labor abuses by their contractors. The policy is based on the 1938 “hot goods” law, which forbids the shipping across state lines of products made in violation of federal labor laws.

“We have just begun talking with La Belle and have not come to any conclusions,” Otero said.

La Belle co-owner David Kashanian said the company has been asked to freeze payment to another Orange County contractor that had allegedly not paid its workers properly. He declined to name the contractor.

But Kashanian said he was not aware of any abuses at Joanne Fashions and has not done business with the Nguyens since they sold their shop in September. He said La Belle cannot be held responsible for how its contractors treat their workers.

“Is this my job, if you work for some other company, to put my nose in to see if you got the right wage?” he asked. “This is not under my name. I cannot control it.”

Meanwhile, Solano, her mother and Juana Valladares say they have been branded troublemakers and refused work at other garment shops as word has spread that they cooperated with the government.

Valladares supplied Otero with the names of two sewing shops she says refused to hire her. One store owner told her he had no work for her “because you talk,” Valladares said. Otero confirmed that she is investigating those allegations. In the meantime, Valladares says she may try to find work as a janitor.

Otero said her office has affidavits from the other workers and is investigating their complaints. She said all of the complaints have come from Latino workers, though many Southeast Asian workers were also owed back wages. Otero said she suspects some of the Asians have been subjected to similar pressure tactics but are reluctant to complain.

“Not one of them would talk to us about it,” Otero said. “But if we get signed receipts that say somebody received their money, there’s simply nothing we can do about it.”