American retailers continue to avoid helping the victims of the Tazreen and Rana Plaza factory disasters in Bangladesh, which killed 1,200 garment workers. The blanket excuse is fear of the American liability system, in which helping victims might impute a larger responsibility for conditions at factories owned by middlemen. But those fears are remote, according to legal experts, and there are times when a company’s litigation strategy shouldn’t be a bar to its humane obligations: The US firms should follow the lead of their European counterparts in helping displaced workers and family members of victims, while spurring improvement in factory conditions throughout Asia. The American legal system can understand the difference between a humanitarian gesture and the acceptance of legal responsibility.
The lack of leadership by US companies was especially evident when The New York Times reported that neither Walmart, Sears, Children’s Place, nor any of the other US companies which had products made at Tazreen or Rana Plaza were contributing to a compensation fund of up to $70 million being established by European and Canadian retailers. In fact, one European company, Primark, a chain that originated in Ireland, says it has already given out $3.2 million in aid to victims and is currently paying the salaries of Rana Plaza workers. The gulf was further widened when Canadian retailer Loblaw, maker of the Joe Fresh line, announced it is also pitching in to pay workers’ salaries, and Swedish retailer H&M unveiled a plan to boost the wages of 850,000 textile workers in Asia, starting with a few companies next year and covering all 750 factories that make its clothes by 2018.
There were some small signs of American cooperation as a coalition of European and American retailers agreed on a new set of tougher inspections for factory safety. In addition, European brands including Benetton, Zara, and Helly Hansen joined with a handful of smaller US brands such as American Eagle and Sean John in agreeing to pay for improved factory safety conditions out of pocket. In contrast, big American retailers have offered only voluntary measures and pledges of loans to factory owners. Many of those firms, including Macy’s, Target, Kohl’s, Costco, and JC Penney, are not making any binding commitments out of fear they will be construed as an admission of negligence and trigger lawsuits.
But the notion that improving conditions now will lead to huge legal liabilities later is highly speculative. International labor law professor Mark Barenberg of Columbia Law School said in an e-mail that factory safety “is no more burdensome in Bangladesh than ensuring that warehouses and retail stores are structurally sound in the United States, where the US retailers already face legal liability if those buildings collapse on the heads of workers and customers.”
Once, many US, European, and Canadian retailers all sought the cheapest makers of clothing, regardless of workers’ conditions. Now, Europe and Canada are hearing a message that Americans aren’t. “We believe we have a moral obligation to support the workers who are producing our products,” Joe Chant, Loblaw’s senior vice president for corporate affairs, told the Times. “Our chairman has voiced disappointment that more brands haven’t stepped up.”
A company’s litigation strategy shouldn’t be a bar to its humane obligations.
More American firms should step up.