Looking back on Paris Fashion Week 2018, it is fun to reflect on the undeniable allure of Paris. Maybe it is the Parisian lights. Maybe it is because it is the City of Love. But there is something that attracts Francophiles from all over the world. A long-time fashion hub, Paris has been winning the hearts of more and more American fashion designers. Traditionally, New York Fashion Week is the reference mark for American design. Yet in just the past year, American designers Rodarte, Proenza Schouler, Thom Browne, and Joseph Altuzarra have opted to show their collections in Paris instead.
All of the Americans in Paris cited creativity as the major reason for relocating their spring and fall shows to Paris. Prior to Rodarte’s Paris Haute Couture Week debut last summer, co-founder Laura Mulleavy told The New York Times’s Elizabeth Paton: “I like being part of a new situation.” Co-founder Kate Mulleavy expanded:
“Ultimately a process should fuel creativity…France treats fashion as art; it just isn’t like that in America. Just spending time in [Paris], being part of it, is a reminder that enjoying new experiences fuels your best ideas and designs. Your imagination can totally come alive.”
Nevertheless, new opportunities also bring new legal issues. The initial question regarding work in France often is: Will I need visas or work permits for my American staff in order to show my collection in Paris? The good news: since 2016, if you are working in France for three months or less for the purpose of putting on a trade show, an art exhibition, or a fashion show, you need neither visas nor work permits.
Also, keeping in mind that French law emphasizes employee well-being, France requires its foreign employers to have documentation on file with the French counterpart to the United States Social Security Administration.
France and the United States have a reciprocal agreement whereby time spent working in France is considered eligible for social security and future benefits, like retirement, disability, and survivor’s insurance, in the United States. US employers must file a social security form for each employee working abroad. However, those benefits (as with so many others) do not apply to independent contractors. Therefore, those make-up artists, hairstylists, and public relations personnel employed by others but who are “hired out” by designers for shows must have their own full-time employers file social security forms for them.
Before starting work in France, an American employer transferring employees temporarily must file a declaration of workplace safety with the office for the International Posting of Workers in France, also known as Prestation de Services Internationales en France (SIPSI). Upon such filing, SIPSI will alert the French authorities responsible for inspecting the posting locations of foreign employees to examine the proposed fashion show site. Unlike the multiple social security forms required by an employer in the US, only one SIPSI filing is needed per employer, per location.
Much as in the critically acclaimed movie, as an American in Paris you will want to spend your free time eating baguettes, sightseeing, taking pictures, creating memories, and perhaps falling in love. It therefore would be wise to consult counsel and to address the business and legal issues in advance so that, once the fashion show has been completed, you will be able devote your time to drinking wine, eating cheese, and indulging in the many facets of French culture.
Credit: Candace R. Arrington
Photo Credit: Greg Kessler
When you hear the term fast fashion, what pops into your head? Trendy designs, hot off the runways of Europe, reinterpreted at prices for all? Affordable, mass-produced clothing? How about labor unrest?
It’s long been true that the garment industry, as with others in which production is outsourced to developing nations, has had its troubles with employment practices at source factories. Those practices continue, particularly in factories in Asia and Eastern Europe. Most production appears to be completed fairly. Recently, however, an unwelcome spotlight has fallen on Zara and its parent company, Inditex. Back in July 2016, the Bravo Tekstil factory in Turkey, which had manufactured clothes for Inditex under the Zara brand, as well for as other fast fashion houses such as Mango and Next, abruptly closed. The former Bravo workers went to court to obtain a ruling that they were entitled to three months’ unpaid wages and severance pay from their former employer. With the employer’s principal having disappeared with the funds that the factory had received for the production of the garments, the workers attempted to have Inditex and the other fashion houses take responsibility for the payment of their lost wages. Although apparently not legally liable, Inditex had announced in 2016 that– together with Mango and Next – it would establish a “hardship fund” to compensate the workers. The three companies have since offered to pay about one quarter of the claims, collectively offering the equivalent in Turkish lira of about US $700,000.
That did not satisfy the former workers, who have focused their efforts on Inditex and the Zara brand in their attempt to recover their money. A number of these workers recently went into Zara stores in Istanbul and inserted hidden tags into merchandise. The tags advised potential purchasers that the people who had made Zara clothes such as those had not been paid for their work. Although it is not clear if the pieces so chosen were made in the shuttered factory, the resulting publicity surely did Zara no favors. Indeed, if there is a party in the wrong, it is the former employer, but that party is out of the picture, and the result is contention over what was intended to be an act of corporate generosity.
Why do these situations exist? In large part, it is due to the fast-fashion business model, which requires production of vast quantities of inexpensive clothes very quickly (as the name implies). Rapid and cheap can be, and has been, accomplished successfully many times, but the exceptions can be horrific. The Rana Plaza building collapse in Bangladesh, which killed over 1,130 garment-factory workers and injured over 2,500 more several years ago, is the most famous case in point.
How can a company as much as half a world away, eager for quick production, trust that its sources pay fairly, honor agreements to workers, provide clean working conditions and—quite literally—assure that the roof will not come down?
Contracts with source factories typically contain clauses prohibiting child labor and forced labor, mandating safe and healthy working conditions—and demanding compliance with often very strictly delineated employment standards and practices. But from far away, that is difficult to enforce, and as anyone who has ever inspected a factory knows, when they are aware that you are coming, things start to look much better—at least as long as you are there.
Earlier this year, a coalition of labor and human rights groups produced a report on transparency in the global garment industry supply chain. The hope is that, by encouraging fashion companies to publish accurate information concerning the factories in which their garments are manufactured, they will undertake to assist further to prevent, address and correct any human rights abuses that may occur there. It remains to be seen as to how successful these new initiatives will be. All that can be certain for now is that the problem will not go away and that counsel for companies seeking sourcing in developing areas should be diligent in working with management to help minimize both business risks and any potential harm to factory workers.
Credit: Laura E. Longobardi
Laura is counsel to Phillips Nizer’s Litigation Department and Labor & Employment Law and Real Estate Law Practices.
Tips To Help Avoid Adverse Claims and Protect Your Company
In the Event of a Lawsuit
It is axiomatic that a successful business in the fashion industry requires close attention to detail and countless hours of work. While the threat of potential litigation should not be at the forefront of management’s thoughts, here are some tips to bear in mind to reduce your potential future exposure and to place your company in a better position to defend itself in the event it is faced with a lawsuit or a potential lawsuit:
- Notify your Insurance Carrier. If you are served with a Summons and Complaint, or are threatened with a lawsuit, notify your insurance carrier. If you fail to timely notify your insurance carrier it may deny coverage, and the company could be stuck with otherwise avoidable out-of-pocket defense and indemnification costs.
- Implement and Enforce an Anti-Harassment Policy. An affirmative defense may exist to protect the company from vicarious liability for certain sexual harassment/discrimination claims based upon actions by supervisors and co-employees if the company implements and enforces an anti-harassment/discrimination policy; exercises reasonable care to prevent and correct promptly any sexually harassing discriminatory behavior; and the employee unreasonably fails to take advantage of any preventative or corrective opportunities provided by the employer or to avoid harm otherwise.
- Two Company Representatives Should Participate in Disciplinary, Evaluation and Exit Interview Meetings With Employees. Many employment claims (or issues that may give rise to employment claims) can stem from a disciplinary meeting, employee evaluation or exit interview, when a company representative (whether the H.R. director or an immediate supervisor) informs an employee of job concerns, performance issues or that employment is being terminated. It is advisable for the company to have two company representatives at those meetings to be better able to confirm or deny what transpired (to avoid a “he said she said” scenario) in the event of a subsequent claim by the employee.
- Careful! Emails Are Not Private. Once a lawsuit is underway, the company will likely be required to turn over emails (or entire accounts) that may be relevant to the subject-matter of the lawsuit. So, the next time you send a personal email from your work account, be mindful of its content, especially if you don’t want some lawyer, like myself, reading about your personal life. Conversely, lawyers either prosecuting or defending a case are always looking for the “smoking gun.” So, before you click “Send”, make sure you are comfortable that, if a lawsuit arises, your email will not be the “smoking gun” that an opposing lawyer may be seeking.
- Keep Accurate Time Records of Non-Exempt Employees. It is not only statutorily required for employers to do so, but is critical to the defense of a Fair Labor Standards Act claim for unpaid (or underpaid) wages, to accurately keep and maintain time records of all non-exempt employees. If the company maintains accurate and orderly time records on a daily basis, you will not be in the position of having to scramble (or spend countless hours) compiling these crucial documents for your defense or trying to defend against an employee’s claim without potentially crucial documentary evidence.
- Avoid Spoliation Claims Arising From Destruction of Surveillance Videos. Sometimes a claim for spoliation will be made if relevant evidence has been intentionally or negligently destroyed. This can arise not only from the destruction of documents, but also when video surveillance captures relevant footage which is not retained. A possible defense here would be to ensure the company has thoroughly documented and enforced a recycling and retention procedure relating to the company’s surveillance.
The list above is generally focused in my practice areas of litigation. It is not intended to be, and in fact is far from, a comprehensive list. Each point merits its own blog post, which will likely follow in the near future.
Credit: Kathryn T. Lundy
Kathryn is an associate in Phillips Nizer’s Litigation Department and Labor & Employment Law Practice.
Did you hear the one about the man and woman who walk into a bar and say they interned for a luxury fashion company, a magazine conglomerate, a movie studio, a modeling agency, a jewelry designer or the Los Angeles Clippers and say they should have been paid for it?
It’s not a joke. The legal assault on the unpaid internship continues to pose serious issues for unwary employers. More and more unpaid interns (typically, but not always, students or recent graduates) and their attorneys are rejecting the age-old rite of passage/symbiotic relationship that requires them to work long hours and perform varied tasks without pay in exchange for the opportunity to learn the business, make meaningful contacts, pad a short resume and demonstrate the moxie to make big money from future paid employment. Interns and former interns who never before (outwardly) complained about their arrangements are finding clear support from federal and state wage and hour laws requiring payment of minimum wage and applicable overtime premium pay for all the hours they work—just like regular employees—and are filing and participating in lawsuits to get what they believe they are owed. The public interest website ProPublica compiled and updates a chart tracking filing and status of interns’ lawsuits (http://goo.gl/jBYR9U).
I Don’t Want to Pay My Interns…
Okay, and you don’t have to—if your unpaid internship program satisfies all six of the following factors:
- the internship, even though it may include the actual operation of the facilities of the employer, is similar to training that would be given in an educational environment;
- the internship experience is for the benefit of the intern;
- the intern does not displace regular employees and works under close supervision of existing staff;
- the employer that provides the training derives no immediate advantage from the activities of the intern—and indeed, on occasion, its operations may actually be impeded;
- the intern is not necessarily entitled to a job at the conclusion of the internship; and
- the employer and the intern understand in advance that the intern will not be entitled to wages for the time spent during the internship.
If that does not sound like the program in place for your summer (or other) unpaid interns, you should carefully re-evaluate whether you are in compliance with the federal Fair Labor Standards Act and applicable state law. The test creates a very high threshold, but not an impossible one—for example, it may be satisfied where, among other things, an intern receives educational credit for an internship program that extends a classroom educational experience for her or his benefit to provide experience and training in a company setting. However, employers most often fail the test where an intern does work generally performed by paid employees, is left to work independently or does productive work for the company’s benefit (even if it also benefits the intern). In all of those cases, the intern likely will be entitled to payment for his or her services.
I’m Not Going to Pay My Interns…
Okay, but be aware of the potential consequences for misclassifying someone as an unpaid intern, which include all the back wages owed (including overtime for hours worked in excess of forty in a workweek) for three years (under federal law) or more (under some state laws), penalties of 100% or more of the unpaid wages and the obligation of paying not only your own legal fees, but those of the intern who sued you. Additionally, understand that many of these cases are brought as class or collective actions on behalf of other similarly situated interns. When you add to the mix the fact that companies rarely keep accurate working time records for those interns they elect not to pay, it all makes for a potentially very expensive proposition—particularly when weighed against the option of simply paying minimum wages in return for work performed. Given the wealth of resources and advocates for unpaid interns, the time has come for employers to toss out the “that’s the way it has always been around here” mentality and carefully re-evaluate their unpaid internship programs.
Credit: Marc B. Zimmerman
Marc is a partner in Phillips Nizer’s Labor & Employment Law Practice and Litigation Department.