In late March 1995, managers at the Gap became aware of claim that the management of the Mandarin factory was resisting union efforts to organize, in violation of the Gap guideline. A Gap executive, Stan Raggio, went to El Salvador to investigate the situation. At the conclusion of his visit, he reported that he had found no human right abused or other violation of the company’s corporate sourcing policies.
On May, 15 when the union worker called for protest the continued firing of union people, the company guard attacked and beat union leader. Mandarin again closed the plant and fired all the union leadership. Stan Raggio, again went to El Salvador to investigate the situation and was again unable to get clear testimony from workers interviewed at the plant that there union rights were being violated.
The national labor relation committee, a coalition of 25 labor unions, now made plans to launch national campaign early in the summer of 1995 protesting harsh condition faced by workers in Caribbean and central American apparel contracting plants.
They arrange two Maquiladora workers- Judith Viera (18 years old) and Claudia Molina (17 years old), spend 59 days to travel in the US and Canada, to criticize the Gap and other companies at press conference, the women and representative of the National Labor Committee accused the Gap of a cover up of the situation at the Mandarin: they describe in detail long hours of work, for 56 cents an hour, violence against union supporters, sexual harassment from supervisors, lake of clean drinking water, not being allowed to use rest room, and being force to sweep the factory grounds under a torrid sun as a punishment.
Union official demanded that the Gap undertake a join investigation with the national labor relation committee, of the situation at the Mandarin, should pressure Mandarin to reinstate the fired union worker, and should commit itself to third party, independence monitoring of contractors compliance with the Gap Code of Conduct. The union noted plants to begin a broader range of coordinate actions at gap store across the US and Canada.
Two month later, Bob Herbert, writer for New York Times, visited El Salvador to investigate the situation for him self. Herbert claimed to have interviewed over 30 women in El Salvador who had been fired for being union members. He had interviewed the president of the Mandarin plants who had confirmed that the women have work at the plan had “left” in late June. Interviews with local church groups and with the Government’s Office for the defense of Human Rights, he said, had also confirmed the mass firing of union workers.
2. Main issue
- Should the gap give in the Unions demand that the Gap undertake a join investigation, with the National Labor Relation Committee?
- Should the company like the Gap attempt to get their suppliers to pay more than local industry standard when it’s insufficient to live on?
- Is a company like the Gap morally responsible for the way its supplier treat their workers?
3. Theoretical Background
3.1. Union and the Right to Organize
The workers right to organize into a union also derives from the right of worker to be treated as a free and equal person. Just as owners have the right to freely associate with each other to establish and run a business for the achievement of their morally legitimate ends, so worker also have to right to freely associate with each other to establish and run union for the achievement of their morally legitimate common ends. Unions are a worker organization or free association that justifies the formation and existence of corporation.
Union is legitimate countervailing means for balancing the power of the large corporation so that the worker in solidarity with other worker can achieve an equal negotiating power against the corporation.
The union achieves equality between worker and employer so the workers right can be secure and treated as a free and equal person in job negotiation with powerful employers.
Unions have to right to strike derive from the right of each worker to quit his or her job at will so long as doing so violates no prior agreement or the right of others. Union strike are therefore morally justified so long as the strike does not violate a prior legitimately negotiated agreement not to strike (which the company might have negotiated with the union) and so long as the strike does not violate the legitimate moral right of others (such as citizen whose right to protection and security might be violated by strikes of public workers such as firefighter or police)
3.2. The firm duties to the employee
The basic moral obligation that employer has toward employees, according to the rational view of the firm, is to provide them with the compensation they have freely and knowingly agreed to receive in exchange for their services. They are two main issues related to this obligation: the fairness of employee working conditions and the fairness of wages.
3.3. Wages
From the employees point of view, wages are the principal (perhaps the only) means for satisfying the basic economic needs of the worker and the workers family. From the employee point of view, wages are cost a cost of production that must be kept down les the product be priced out of the market.
There are numbers or factors that should be taken into account in determining wages and salaries.
- The going wage in the industry and the area
- The firms capabilities
- The nature of the job
- Minimum wage laws
- Relation to others salaries
- The fairness of the wage negotiations
- Local cost of living
3.4. Working conditions: health and safety
The employer has duty to takes step to ensure that worker is not being unfairly manipulated into accepting risk unknowingly, unwillingly, or without due compensation. In particular:
- Employee should offer wages that reflect the risk-premium prevalent in other similar but competitive labor market
- To insure their workers against unknown hazards, the employer should provide them with suitable health insurance programs.
- Employers should (singly or together with other firms) collect information on the health hazards that accompany a given job and make all such information available to workers.
3.5. The Caring Organization
Jeanne M Liedtka describe that the caring organization as that organization, or part of the organization, in which caring is:
- Focused entirely on persons, not “quality,” “profit,” or any of the other kinds of ideas that much of today’s “care-talk” seems to revolve around;
- Undertaken as an end in and of itself, and not merely a means toward achieving quality, profit, etc.
- Essentially personal, in that it ultimately involves particular individuals engrossed, at subjective level, in caring for other particular individuals;
- Growth-enhancing for the cared-for, in that it moves them towards the use and development of their full capabilities, within the context of their self-defined need and aspirations.
4. Analysis
Based on the ethical principal, the Mandarin International has done an unethical business practice, as told by Judith Viera, Claudia Molina and the representatives of the National Labor Committee in the press conference which stated that the company has been applying long hours of work, for 56 cents per hour. They also did violence against union supporters, its supervisors did sexual harassment, the company was lack of clean drinking water, the employees were not allowed to use rest room, and they were also being forced to sweep the factory grounds under a torrid sun as a punishment.
This testimony was supported by Bob Herbert investigation by interviewing workers who had been fired for being union member, and also interview result with the local church groups and the Government’s Office for the Defense of Human Rights that confirmed the mass firing of union worker. Unfortunately, when Stanley Raggio did the investigation in the factory he had found no human right abuses or other violation of the company corporate sourcing policies and wasn’t able to get clear testimony from workers interviewed at the plant that their union right were being violated.
The union has the right to strike when the company didn’t treat their workers as free an equal person with condition their strike does not violate a prior legitimately negotiated agreement of not to strike (which the company might have negotiated with the union) and so long as the strike does not violate the legitimate moral right of others.
To find the reality what actually happened in the factory the Gap management in this case, Stanley Raggio, should corporate with the national Labor Committee to conduct new investigation in the factory. This investigation should be done without being known by the Mandarin International.
If the investigation result shows that the claimed from Judith Viera, Claudia Molina and the representatives of the National Labor Committee are right it means Mandarin International has violated the Gap Sourcing Principle and Guidelines which can make the Gap would not source from that company.
To enforce and prevent the same case occur in the future, the Gap should cooperate with the third party, doing independent monitoring of contractor, comply with the Gap code of conduct intently together with the Gap field representative.
According to Gap Sourcing Principle and Guidelines, the Gap supplier should pay the legal minimum wage or the local standard whichever is greater; meet all applicable local environmental regulation. Mandarin plants averaged 56 cents an hour-a level that was claimed to provide only 18% of the amount needed to support a family of four but that was consistent with the industry standard for the region.
Unfortunately, there is no simple formula for determining a “fair wage”. The fairness of wages depends in part on the public supports that society provides the worker (social security, Medicare, unemployment compensation, public education, welfare, etc.) the freedom of labor markets, the contribution of the worker, and the competitive position of the firm. Actually, the Mandarin International already fulfills the minimum local wages, but Mandarin International also has the moral responsibility to their workers to give the wages that meet local cost of living. They may provide other benefit to their workers depend on the firm capabilities.
The Gap got high margin by purchasing from Mandarin International, hence The Gap also has the responsibility to the Mandarin workers to increase their wages so that they can fulfill the minimum cost of living.
Actually, the Gap doesn’t have direct responsibilities to the way its suppliers treat their workers. Yet as a company, the Gap should be a caring organization. It should not only focus on profit, but also to the person. The Gap already has the Gap Sourcing principle. Mandarin international as Gap supplier which has committed to the Gap Sourcing Principle and Guideline has the full responsibilities to treat their workers fairly. The suppliers also have the responsibility to the Gap for their action to their workers.
Conclusion
- The Gap isn’t directly applying unethical business behavior, but as a company who sub contracted the product to Mandarin International it has social responsibility to the mandarin employee who make Gap product.
- The Gap should make sure the entire supplier fulfills its sourcing principle and guidelines. The supplier which doesn’t implemented the entire Gap standard and the local government standard, the Gap should avoid doing business with them.
- Mandarin International done unethical business by not allowing their employee to make union (fired all the union members) and all the unethical behavior toward the employee.
Recommendation
- The Gap should choose their supplier carefully and maximize the Gap field representative by put an eyes and do the regular inspection not only when they start the business but always monitoring the working and social condition of the supplier to comply with the Gap code of conduct and also the local government laws.
- The Gap representative officer should do the interview without being known by the Mandarin International, so the employee would be freely to speak about what really happened in the factory.
- The Gap should give more effort to increase the quality of live their supplier employee which usually in the third world by giving education or other benefit.
