Department of Labor investigation underscores role of manufacturers, retailers in perpetuating exploitative working conditions
SAN DIEGO – Official merchandise for artists including the Rolling Stones, Britney Spears, Lady Gaga, Willie Nelson or Ariana Grande may have been made by workers at a San Diego silk-screening contractor who denied them the wages they earned for their work.
An investigation by the U.S. Department of Labor’s Wage and Hour Division has concluded that King Graphics in San Diego, a contractor for numerous entertainment merchandise manufacturers, shortchanged workers of wages by failing to pay overtime at time and one-half the required rate of pay for all hours worked over 40 in a workweek, a violation of the Fair Labor Standards Act.
On Sept. 15, 2021, Wage and Hour investigators visited King Graphics and requested that the employer refrain from shipping “hot goods” made in violation of the FLSA. The employer agreed to withhold shipment of a truckload of Britney Spears’ T-shirts headed to Target stores and other items for sale at retailers such as Aeropostale, Footlocker, Hot Topic, Kohl’s, PacSun, Target and Urban Outfitters.
Under the FLSA’s “hot goods” provision, the department can seek a court order to prevent the interstate shipment of goods that were produced in violation of the minimum wage, overtime, or child labor provisions of the FLSA. The order can apply not only to the employer who produced the goods but to anyone in possession of the goods. King Graphics agreed to pay $10,473 to lift the hot goods hold.
After the division’s investigation was concluded, the U.S. District Court for the Southern District of California entered a consent judgment in April 2022 under which King Graphics agreed to pay $134,957 in overtime pay and an equal amount in liquidated damages, a total of $269,914 to the affected 76 workers. King Graphics will make this payment through a related class action lawsuit brought by the employees. King Graphics will also pay $10,473 in civil money penalties for these willful violations. The court also ordered the employer to hire an independent third-party to monitor future FLSA compliance.
“Celebrities, retailers and manufacturers profit from T-shirts sold for $40 or more, while the low-wage workers who produce the merchandise work overtime to meet consumer demand and become victims of wage theft,” said Acting Administrator of the Wage and Hour Division Jessica Looman. “The Wage and Hour Division will continue to hold employers accountable and use every available tool to ensure that workers are paid in compliance with the law.”
As a result of the King Graphics’ investigation, the division also investigated manufacturers who violated the FLSA by receiving and distributing the hot goods. These manufacturers include Solento Inc. in Encinitas, Bravado International Group in Hollywood, Civile Apparel LLC in San Diego and Artists Merchants and Lasso Gear in Los Angeles, California; Sony Music Entertainment in New York City and The Loyalist in Brooklyn, New York; Local Motion Inc. in Honolulu, Hawaii; and Captain Fin in Wilmington, North Carolina.
The manufacturers cooperated with investigators, submitted the requested records and provided assurances to the department that they will comply with FLSA, and perform due diligence to avoid future violations.
“A manufacturer or retailer must ensure their supply chain is free of ‘hot goods’ – products produced by workers whose legal rights have been violated – or risk legal liability,” added Looman. “All parties, from the entertainers to the distributers and wholesalers, should ensure their profits aren’t supported by workers in sweatshops, many of whom are immigrant women supporting families.”
For more than 20 years, King Graphics has operated a silk-screening and embroidery shop, finishing all types of garments and promotional items. The company claims to print about 30,000 items per day.
Counsel for Wage and Hour Boris Orlov of the department’s Office of the Solicitor in Los Angeles negotiated the joint resolution of this case and a private class action during mediation with King Graphics.
The division enforces the law regardless of a worker’s immigration status and can speak confidentially with callers in more than 200 languages. For more information about the FLSA and other laws enforced by the division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Learn more about the Wage and Hour Division, including a search tool to use if you think you may be owed back wages collected by the division.