AMERICAN SAMOA HIGH COURT'S DAEWOOSA "OPINION AND ORDER" ISSUED

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By Fili Sagapolutele

PAGO PAGO, American Samoa (April 26, 2002 – Samoa News)---The High Court of American Samoa, in a 103 page "opinion and order" issued last week, found rampant minimum wage violations at Daewoosa Samoa and evidence that the company's foreign workers suffered harsh living conditions at the now closed garment factory.

Signed by Associate Justice Lyle Richmond and Chief Associate Judge Logoai Siaki, the court issued a judgment of $3.5 million against Daewoosa, its owner Kil Soo Lee and two Vietnamese government recruiting agencies.

Details of the judgment against the defendants were outlined in a story published by Samoa News on April 18, 2002.

[SEE: http://pidp.eastwestcenter.org/pireport/2002/April/04-19-up1.htm]

The two Vietnamese agencies, International Manpower Supply (IMS) and Tourism Company 12 (TC12) recruited more than 250 Vietnamese workers, mainly women, for Daewoosa Samoa.

The court's decision was based on lawsuits filed by Daewoosa's Vietnamese and Chinese workers alleging that Daewoosa and Lee had breached the terms of their employment contracts and committed other civil wrongs (such as involuntary servitude). The workers also cited federal labor law violations committed by Lee and Daewoosa.

INTRODUCTION

The lawsuit by the foreign workers was "made more complicated by the diverse language and culture of the parties and witnesses involved," said the court. While the imported workers hailed from either China or Vietnam, Daewoosa's owners are Korean. Negotiations and final employment contracts were in either Chinese or Vietnamese.

"Social barriers between the parties involved was evident before and during the trial," said the court, noting that throughout the proceedings testimony was given and translated into five different languages, including English, Samoan, Korean, Vietnamese and Chinese.

"For the most part, amateur translators were necessarily employed and, unsurprisingly, the translations were difficult and at times ineffective," the court points out.

"Counsel did little to abridge this complexity. The pretrial maneuvering was intricate and exhaustive. During the trial, perhaps one of the lengthiest in the recent history of this court, they complicated our fact-finding mission by introducing heaps of unmarked, seemingly irrelevant evidence, leaving us with the task of filtering through and searching for relevant documents and records amid these piles.

"Nonetheless, we were ultimately able to assemble the relevant facts--and apply applicable legal principles to them," the court explained.

The major entities on the defense side of this case included two corporations, IMS and TC12, and several individuals, according to the court.

Daewoosa Samoa, incorporated in American Samoa, was the operational employer of the Chinese workers and the Vietnamese workers.

U.S.A. Daewoosa, Ltd. (Daewoosa USA), which was established in Korea, appeared as the named employer of the Vietnamese workers' employment contracts, the court said.

Individuals affiliated with these corporations included Lee, a Korean national, the primary owner and apparent manager of Daewoosa Samoa, and Um Sang Hee ("Hee"), a Korean national, the president of Daewoosa USA, shareholder and vice-president of Daewoosa Samoa, and primary negotiator for and signatory on the Vietnamese workers' employment contracts.

According to the court, Nguyen Viet Chuyen (Chuyen), a Vietnamese national employed by TC12, was charged with supervisory responsibility over the IMS and TC12 Vietnamese workers at the Daewoosa Samoa factory.

PROCEDURAL HISTORY

The court outlined the history of case, which was covered from the beginning by Samoa News, including complaints filed by the foreign workers after Daewoosa tried to terminate their sponsorship and deport them while the lawsuit was pending.

Daewoosa paid no attention to several court orders, forcing Vietnamese workers to file contempt charges against Daewoosa and Lee "for violating the court's orders and harassing the Vietnamese workers because of their involvement in this lawsuit."

Despite Daewoosa and Lee being held in contempt of the court's orders, they continued their efforts to deport their workers.

About three weeks after the November 28th, 2000 melee, the court issued several orders including directing Daewoosa and Lee to pay all wages less authorized tax deductions due to the Vietnamese workers.

The defendants were also told to arrange and pay for transportation of the Vietnamese workers desiring to return home to Vietnam. The first 35 workers were to leave the territory within three weeks of the court order and the remaining workers thereafter in groups of varying sizes at reasonable intervals.

The court did note in its April 16th "opinion and order" that the November 28th melee resulted in the loss of an eye of a female Vietnamese worker. A requested "no-contact order" was issued following that November 28th incident. The incident proved to be the tip of the iceberg for more serious problems for Daewoosa Samoa.

"We did not make detailed findings on this [melee] event and responsibility for it because the evidence presented was inconclusive and the liability issue was not then before us," the court said.

"Clearly, however, many of the Vietnamese workers feared returning to work after this incident and were motivated to return to Vietnam," the court added.

The class action lawsuit went to trial on January 18, 2001 for 18 trial days, concluding on February 22, 2001.

Counsels Virginia L. Sudbury and Christa Tzu-Hsiu Lin for the Vietnamese plaintiffs; Marie A. Lafaele for Daewoosa Samoa and Lee, and Paul F. Miller for TC12 were present throughout the trial.

Counsel for the Chinese plaintiffs, Afoa L. Su'esu'e, was present at proceedings immediately pertaining to his clients.

IMS was not represented by counsel and did not present any evidence.

FACTS OF THE CASE

Recruitment of foreign workers originated from Korea and in 1998 Lee traveled to China "and enlisted workers to do miscellaneous jobs" at Daewoosa Samoa. Eighteen Chinese nationals were recruited with the first group that arrived in the territory October 1998 and five more sometime in February of the following year.

Lee also sought Vietnamese workers and authorized Hee to enter into contracts on behalf of Daewoosa Samoa. While most of the Vietnamese workers were recruited by IMS and TC12, at least 6 Vietnamese workers were independently recruited. Vietnamese workers started arriving in the Territory throughout 1999 and 2000.

Employment Contract

One of the most controversial issues in the case, which was probed three years ago by the local House of Representatives, was the employment contracts for the Daewoosa Samoa foreign workers (which Samoa News has reported on extensively in the past).

Employees' contracts called for Daewoosa Samoa to provide its imported workers "with free suitable housing and food."

The Chinese workers executed their employment contracts upon their arrival in the Territory. Their employment contracts provided for eight-hour workdays and $390.00 in monthly basic wages. The contracts also provided that Daewoosa Samoa supply room and board, for which the workers were required to pay a monthly fee of between $100.00 and $150.00.

The court found that although the Vietnamese workers had signed individual work contracts with either their respective recruiting agency in Vietnam or Daewoosa USA, upon arrival at the Daewoosa Samoa factory, "Daewoosa Samoa attempted to have each Vietnamese worker sign an altered contract."

Vietnamese independent workers also entered into individual contracts to work at Daewoosa Samoa. TC12 signed two contracts with Daewoosa USA for its 250 recruits as "machinists."

Although Hee's stamped signature appears on the TC12 contract with Daewoosa USA, the court noted, "Hee incredibly repudiates the use of her signature stamp, or in any way consenting to the agreements."

"In addition, Hee incredibly disavows any relationship between Daewoosa USA and Daewoosa Samoa. The close affiliation of both corporations was clearly established at trial."

According to the High Court, Daewoosa USA provided "substantial sums of money" to Daewoosa Samoa in investment and loans, including a $20,000 payment.

The court also found that Daewoosa USA acted "as the conduit for the Vietnamese workers' employment, including transferring the workers' initial fees received from IMS and TC12 to Daewoosa Samoa."

The court also found that several documents, including employment contracts, bore the Daewoosa USA name while Hee's business card listed Daewoosa USA with Daewoosa Samoa's American Samoa address, telephone and fax number.

The TC12-Daewoosa USA contract and the independent workers contract "further allowed for continuous compensation for workers when work was interrupted through no fault of their own."

The TC12-Daewoosa USA contract provided for "arbitration" the court said, but noted that the Vietnamese interpretation of this was "judicial resolution of any contract dispute."

The court also found that upon the arrival of the Vietnamese workers in the territory Daewoosa attempted to execute another employment contract, written only in English, "which eliminated Daewoosa Samoa's responsibility to pay for the workers' food and lodging as well as any compensation to the Vietnamese workers when work was interrupted."

"The IMS workers understood their contracts to include the continuous wage provision," the court stated.

Some IMS recruits, with the benefit of a Vietnamese translation of the new contract, refused to sign the Daewoosa Samoa contract. The Vietnamese groups who arrived later signed the new contracts without the benefit of a Vietnamese translation.

"While the workweek for the Vietnamese workers were similarly expressed in their contracts as 40-hour workweeks, the monthly salaries of some of the Vietnamese workers initially differed," the court explained.

"The TC12-worker contracts and independent worker-Daewoosa USA contracts guaranteed each employee monthly wages of $408.00 per month, whereas the IMS-worker contracts provided monthly wages at $390.00 per month.

"Apparently, these two amounts were premised upon the parties' mistaken belief that the amounts complied with lawful U.S. minimum wage applicable to American Samoa. [But] when the IMS recruits received their first paychecks their earnings reflected basic monthly wages of $390.00 rather than $408.00.

"Overtime wages for both the Chinese workers and Vietnamese workers were calculated at 150% of their regular wages and then subjected to a varying deduction.

"The TC12-Daewoosa USA contracts contain reference to a 50% deduction from the Vietnamese workers' overtime wages to cover items identified as board, lodging and security. In practice, however, overtime deductions were applied to the foreign Daewoosa Samoa workers across the board.

"The amount of the overtime deduction was inconsistent and wide-ranging from 40% to 60% of the workers' overtime pay, resulting in irregular and substantially reduced overtime wages."

While the required local and federal income taxes were deducted, Daewoosa management failed to pay the withheld contributions to the government except for a short period between January and May 2000.

Initial Fees

Another controversial facet of the case involved charging "substantial initial fees for various purposes" to the foreign workers by the recruiting agencies and Daewoosa Samoa.

The court found that each Chinese worker paid Daewoosa and Lee $7,683.

Each of the Vietnamese workers recruited by IMS paid IMS $3,000 and those recruited by TC12 paid TC12 $4,000 portions of which IMS and TC12, in turn, transferred to Daewoosa Samoa and Lee.

Each of the independently recruited Vietnamese workers paid Daewoosa Samoa and Lee, through an independent employment recruiter, approximately $5,000 each.

The collected fees were to cover government fees, airfare to American Samoa, a security deposit and local immigration and employment fees. The court found this practice illegal.

"The workers borrowed money for this purpose. At least one Vietnamese worker sold her home to make the requisite payment," the court said.

About $450,000 of fees collected by TC12 were transferred to Daewoosa Samoa for "workers' deposits, immigration fees and other miscellaneous fees" with $250,000 earmarked specifically for an immigration bond. However, ASG allowed Daewoosa to post only a $10,000 bond.

Passports & ID Cards

Travel documents for the workers were required to be turned over to Daewoosa upon arrival in the Territory for immigration processing. However, the company retained them, including immigration IDs.

A curfew was initiated for Daewoosa workers to correspond with the Nuuuli village curfew. Workers violating the curfew "were unexpectedly kicked, slapped, or punched by Daewoosa Samoa's security guards upon returning to the compound," said the court.

Workers movements were further limited by requiring each worker to leave their ASG issued ID cards and other papers at the compound's main gate. Such ID is required to be in the possession of any immigrant while moving around in the territory in case they are stopped by local authorities. But due to this limitation, the court said workers remained within the compound because they were fearful of traversing beyond its perimeters.

The court then found that Daewoosa Samoa and Lee "illegally retained workers' passports and registration cards, without any legal right, and as a means of limiting the workers' egress and ingress from the compound."

Workers' Supervisor

One of the issues reported by Samoa News at the outset of the case for the Vietnamese workers (in 1999) was the empowerment by the Vietnamese government of Chuyen as a supervisor of all the Vietnamese workers recruited by TC12 and IMS.

"Chuyen did more than merely oversee the Vietnamese workers. He was also given broad authority to discipline the workers, including sending regular reports of the workers' comportment with management policies to IMS and TC12," the court said.

"His reports recommended adverse actions against the workers, including employment suspension or termination. Chuyen's reports clearly kept IMS and TC12 appraised of all that transpired in American Samoa regarding the Vietnamese workers, including the filing of this lawsuit.

"At one point in April 2000, TC12 wrote directly to the Vietnamese workers, instructing them to drop this lawsuit. IMS and TC12 also threatened workers or their Vietnam-based families with penalties if their protests continued.

"Chuyen also served as the communicator between the Vietnamese workers and Lee. All of Lee's instructions to the workers were translated through Chuyen. In addition, Chuyen performed other managerial type duties for Daewoosa Samoa, such as distributing the Vietnamese workers' paychecks," the court said.

Living Conditions

The court described the living quarters for the workers in its decision, saying the quarters consisted of approximately eight rooms with an estimated holding capacity of 36 people to each room.

"The typical room was furnished with a two-tiered bunk beds equipped to hold one person per tier. The bunk beds were aligned close to each other in approximately two rows, which rows were opposite each other."

"A narrow corridor space was provided between the two rows of beds. At any given time, there was an insufficient number of beds for the number of workers, requiring that two workers share some beds.

"Each room was equipped with a shared bathroom facility, consisting of showers and toilets. There were approximately one to two showers, and two to five toilets in each bathroom facility. The showers and toilets were not maintained, and some remained permanently broken. Toilet paper and hot water were not provided," the court said.

The U.S. Labor Department in 1999 cited Daewoosa for a number of safety and health violations (reported by Samoa News at the time).

Regarding the meals, workers had testified in the trial that meals "were at times barely edible" and that the food "consisted of a starch and a type of vegetable, usually cabbage soup."

"Fresh vegetables and fruits were not provided. Meat and chicken, or similar food, were not regularly provided, given in only two to three meals a week," the court noted.

Dr. Heather Margaret of the Medical College of Pennsylvania, testifying as an expert witness for the Vietnamese workers, after reviewing Daewoosa's menu was "unable to form an opinion as to the nutritional value of meals because the menus did not provide corresponding portion sizes." She did testify, however, that the meals failed to meet federal intake requirements regarding fresh vegetables and fruits because of the total lack of such foods.

The court also cited a March 1999 incident in which the workers were not fed when they refused to work due to non-payment of their wages.

The court found that the workers were entitled to free room and board and due to substandard quality of meals and accommodations provided by Daewoosa, the court further found that none of the workers "should be required to pay for such accommodations."

Items from the SAMOA NEWS, American Samoa's daily newspaper, may not be republished without permission. To contact the publisher, send e-mail to

For additional reports from the Samoa News, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/Samoa News.

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