International forum on Clean Clothes: workers' and Consumers' rights in the garment industry
Brussels, 30 APRIL ­ 5 MAY 1998

Case FILE :
Levi Strauss & Company
Corporate Profile and Case Material

I. Introduction

Introduction to Levi Strauss & Co., the largest brand-name apparel manufacturer in the world.

II. Products and Marketing

Overview of Levi's three major brands (Levi's, Dockers and Slates), other products and information on marketing and retailing.

III. Recent History: Restructuring & Reengineering

In the 1970s the company went public, in the 1980s a leveraged buyout took Levi's private again. Levi Strauss continues to change. This section discusses the reengineering program the company initiated in the 1990s and current restructuring initiatives, including upcoming layoffs in the United States and the recent decision to expand operations in China.

IV. Why Focus on Levi's?

In March 1992 Levi Strauss & Co. unveiled its "Global Sourcing & Operating Guidelines," establishing a code of conduct for all contractors who manufacture or finish Levi's products, as well as a code for selecting countries in which to do business. As one of the first multi-national corporations to adopt a code of conduct, this decision to take responsibility for standards in their workplace, and Levi's subsequent follow-up (their methods for implementing and monitoring these standards) are a worthwhile subject for analysis.

V. Codes of Conduct: Reaction and Application

In the media and within the corporate community, Levi Strauss was applauded for creating such a set of standards. The company's guidelines and other community service projects have even won awards. But the Levi's code has serious flaws: it does not meet or make reference to ILO standards: wage guarantees are only set at the local minimum wage not a living wage, the acceptable workweek is set at 60 hours; and a company-controlled system of verification does not ensure that even the standards set in the code are implemented and regularly monitored.

VI. In the Workplace: Compliance or Contradiction?

This section, based on documented visits to Levi's production sites, presents evidence that repeatedly shows that the company's code has not been implemented. Drawing on reports from factories in various regions this information demonstrates that conditions and practices violated various requirements set out in the Levi Strauss Guidelines. This section also includes information, to be presented in more detail by a witness/participant at the International Forum on Clean Clothes, on working conditions in two Indonesian factories that produce for Levi's, which are not in compliance with the Levi's code on a variety of points.

VII. Summary and Conclusion

The evidence presented in this report and at the Forum raises serious questions as to how the Levi Strauss guidelines are implemented and monitored. The code, lacking on certain points, appears to not be implemented, and in many cases workers are not even aware of its existence. The company-controlled monitoring process is not comprehensive and, given the numerous violations of the code, is not functioning effectively. Levi Strauss should upgrade their code to meet ILO standards and should adopt a program of independent monitoring to ensure that the standards they claim to support are indeed implemented and regularly verified.

Levi Strauss & Company:
Corporate Profile and Case Material

I. Introduction

Levi Strauss and Company is the largest brand-name apparel manufacturer in the world. The San Francisco, California-based company designs, manufactures and markets branded jeans, dress pants and casual sportswear for men, women and children. Products include jeans, shirts, jackets, skirts and fleecewear, primarily marketed under the Levi's, Dockers and Slates trademarks. In 1998 Levi's reported worldwide employment to be approximately 30,000 people, down from 37,500 the year before (LS&CO, 1998b; LS&CO, 1997b).

The company was founded in 1853 by Levi Strauss, a Bavarian immigrant to the United States. His original business sold clothing and dry goods on the docks of San Francisco, during the Gold Rush era. At this time Strauss began to produce trousers sewn from tent canvas to meet the needs of his miner and laborer customers who were seeking durable clothing. By the 1870s the pants were being produced out of denim. After World War II the company dropped its interest in wholesale drygoods and expanded production to include casual wear and preshrunk jeans, setting up their first national sales forces as the jeans market took off. Six decades of growth followed.

Jeans evolved from the attire of cowboys and laborers to that of defiant youth. In the 1960s Levi's set up a distribution network in Europe, purchased 75% of the top jeans maker in Canada, and set up overseas production facilities. Product lines were extended to include White Levis, an apparel line for women, and corduroy pants. Levi's remained a private company for its first 118 years until it went public in 1971, changing its name to Levi Strauss Associates and issuing new stock shares at a time when the jeans market in the U.S. and overseas was "exploding." By the 1980s, a decision was reached to make the company private again. A leveraged buyout began in 1985 and was completed in 1996 (Mattera, 1992: 417-418; Finnie, 1996: 13).

Now, as a privately-held corporation "The company does not disclose corporate earnings, quarterly revenues, or competitive data on specific business units or brands" (LS & CO, 1998b). Note that 1995 was the last year that Levi Strauss & Co. reported its financial results to the Securities Exchange Commission (SEC). In February of this year Levi's announced their 1997 sales result to be $6.9 billion globally, 4% below the company's record of $7.1 billion in sales in 1996 and their first drop in sales in 13 years (San Francisco Chronicle, 1998). Fiscal 1997 (ended on Nov. 30, 1997) was the first in which the company reported revenues under its new "Triad" global reorganization (LS & CO, 1998b).

1997 Sales Figures

(source: Levi Strauss & Co., 1998b)

Following some brief background information on products, marketing and corporate structure (Parts I, II, and III), this report will focus on why Levi Strauss policies and practices were selected for discussion during the International Forum on Clean Clothes. In addition to highlighting reasons for the inclusion of Levi's in this dialogue on labor conditions in the garment industry (Parts IV and V), relevant research based on secondary sources and eye-witness accounts will also be presented to help draw a picture of what role Levi's "Global Sourcing & Operating Guidelines" play in the workplace (Part VI). A summary of this evidence supports recommendations that Levi's upgrade their code and establish a system of independent monitoring (Part VII).

II. Products and Marketing

Levi Strauss & Co.'s core product line for men, women and youth are the Levi's brand of jeans and jean-related products. The 501 brand, established in 1890, and other jeans in the 501 "family" are the best-known.⁽¹⁾ 501s account for one third of Levi's U.S. jean sales, according to one 1997 report (Sherman: 7). Other jeans produced by Levi's include: Reb Tab, Orange Tab and Silver Tab. The new Captial E line came about when Levi's became aware of a market for vintage jeans. This classic model of the 501-button fly is produced on the original looms.⁽²⁾ Between 1993 and 1995 Levi's brand sales grew 9.2% annually (Finnie, 1996: 18). Personal Pair jeans, custom-made jeans for women, were launched in 1994. By 1996 Personal Pair jeans reportedly accounted for 25% of all women's jeans sold at Levi's stores in the U.S. (Coolidge, 1996: 9).⁽³⁾

Dockers, a line of casual cotton mens pants, was launched in 1993. Simultaneously production overseas was expanded (Mattera: 419) This brand was Levi's entry into the wrinkle-resistant clothing market, increasingly a top-performing product among consumers (especially in the U.S.).⁽⁴⁾ Sales were up and down between 1993 and 1995, with a compounded annual rate of decline of 4.1% (Finnie, 1996: 19). In late 1996 though, as the market leader, annual sales for Dockers were approaching $1 billion (Sherman, 1997: 7).

In fall 1996 Levi's introduced Slates, a men's dress pants line, slightly more conservative than Dockers, and "the third major brand" to be launched by the company (LS&CO, 1996). A $20 million marketing campaign accompanied the launch and within four months Slates shot up to top seller in its category, where it remained through 1997 (LS&CO, 1996; Gebolys, 1997). Slates, fashion-wise is positioned between Dockers and tailored suits, to cash in on the demand for more casual clothes for men over 40. Increasingly in the U.S., and recently in Europe, corporate employees have the option of dressing more casually one day per week.⁽⁵⁾ "Dress-down days" (usually Fridays) feature a relaxed dress code where suits and ties are no longer mandatory, but follow a strict new "casual" code. Both the Dockers and Slates brands cater to this market demand.

Brittania, a line of men's and women's jeans tops and casual sportswear, purchased in 1987, was Levi's main entry in the mass market. Recently, Brittania was sold to the VF Corporation for an undisclosed sum (Reuters, 1997). Made and marketed under the Brittania and Brittgear labels, this line was estimated to make up 5% of Levi's U.S. unit sales, though this figure was reportedly dropping in 1995 when such information was last available (Finnie, 1996: 20; Mattera, 1992: 420).

Red Line, a new product described as "a blend of traditional and contemporary-style jeans" is set to be launched in fall 1998 (Perman, 1997: 66).

In April 1997 Levi's announced plans to return to the footwear industry via a licensing deal with the Lexington, Massachusetts-based Stride Rite Corporation. Though the terms of the agreement were not revealed, the Levi's shoe line will include dress, sneakers, shoes and hiking shoes and boots and will be available in department and specialty outlets this year (San Francisco Examiner, 1997).

Levi's post-WWII success was helped by an image associated with youthful rebellion (Actor James Dean wore Levi's) and part of the anti-establishment "look" (Actor Marlon Brando wore jeans in the movie "The Wild One"), in the 1960s Levi's jeans were part of the uniform associated with the sixties generation (Mattera, 1992: 418). "That was a gift from God. It had absolutely nothing to do with our marketing acumen," explained Steve Goldstein, vice president in charge of American brand marketing (quoted in Sherman, 1997: 4).⁽⁶⁾

Now, the sixties generation has grown up. As a result the Levi's "look" has come to be indentified with the establishment in the U.S., as jeans today are the clothing of middle-aged people, parents. U.S. teens describe Levi's jeans as "too straight," "not baggy enough" "too plain," and "preppy" (Irvine, 1997). Levi's share of the men's jean market dropped from 48% in 1990 to approx. 26% in late 1997. This is probably attributable to Levi's failure to accomodate recent U.S. trends toward wide-leg, baggy jeans currently in fashion among young people. While Levi's succeeded in spotting the trend toward casual wear for aging "Baby Boomers," they failed to accurately gauge the taste of their children and grandchildren. "It's a fair assessment to say we were behind in fashion," admits Gordon Shank, president of Levi's, the Americas (quoted in Perman,1997: 3). In response to declining market share at home, new ad campaigns target 14- to 24-year-olds, according to Shank. Says Harry Bernard, a San Francisco clothing-industry consultant: "I think it's probably the most unfocused ad campaign that they've ever had. I think they've lost track of who and what they are" (quoted in Irvine, 1997).⁽⁷⁾ Shank notes that Levi's is now "assessing every aspect of market mix to protect and maintain leadership" (quoted in Permen: 3).

Leo Isotalo, a former executive who ran several Levi's overseas operating groups until 1989, says the company's success was also "attributable to the ineffectiveness of their branded competition" (quoted in Sherman, 1997: 4). Currently, high-end designers, such as Donna Karan, Tommy Hilfiger, Raph Lauren, Versace and Calvin Klein, now have 4-5% of the men's jeans market, while cheaper in-house brands (Sears , J.C. Penney and Wal-Mart, for example) have "as much as 19% of the men's market and 30% of the women's, compared with 3% each in 1990" (Tactical Retail Monitor, cited in Irvine, 1997). New companies, such as Los Angeles-based JNCO, and Diesel, based in Molvena, Italy, also offer competition, having made inroads with wide-leg jeans and marketing a "hip, alternative" image (Perman, 1997:2).⁽⁸⁾ Levi's main competitor is VF Corporation, which produces the Lee and Wrangler brands.⁽⁹⁾ Though unit sales for the VF products in the U.S. are higher than for Levi's, Levi's outsells them overseas, where the brand's standing as an American icon still has marketing clout. Financial results for Levi's in 1995 revealed a profit margin of over 40%, over 10% more than VF's (Sherman, 1997: 5).

Current marketing strategy focuses on seeking a more high-profile presence in the form of boutiques located within department stores, and an emphasis on the brand as the strongest element (Coupland, 1997: 65). According to Levi's: "To preserve and enhance consumers' impressions of our brands, the majority of our products will be sold through dedicated distribution, such as Levi's® Only Stores and in-store shops" (LS&CO, 1998d). Levi's "initially planned to open some 185 Original Levi's stores around the country, but that strategy was dumped and the company is now focusing on 28 high-concept 'Ultrashops' in major markets" (Coupland, 1997: 65). The first "ultrashop," described as a "standout," opened in the basement menswear department at the San Francisco branch of Macy's department store (Coupland: 65).

In 1997 the company operated 67 stores and a partner operated 10.⁽¹⁰⁾ Levi's stores fit into five categories:
- Original Levi's Stores (30)
- Dockers Outlets (22)
- Levi's Outlets (15)
- Dockers Shops (9)
- Personal Pairs (1)

But recently, in late 1997, the company announced plans to close 18 Levi's Only Stores. All the Dockers Shops, except one, will close. The Personal Pairs store and several of the Original Levi's stores are scheduled to close. "Levi's Only Stores as a company is re-evaluating its concepts and strategies for 1998," spokeswoman Linda Smith told a reporter. "In the next few months, we will decide what the goals will be moving forward. We've got to close stores to stay profitable and we've got to open other stores to be profitable" (quoted in Gebolys, 1997). In the future, Levi's will focus on its four "oversized flagship stores in New York, Chicago, Seattle and Portland, Ore., and adding outlet mall stores. Four or more are planned in 1998" (Gebolys, 1997).

III. Recent History: Restructuring and Reengineering

During the past decade the strategic vision that has guided Levi Strauss and Co., shaped largely by Chief Executive Officer Robert Haas and former Chief Operating Officer Thomas Tusher, has resulted in ongoing change within the company.

In 1984 Haas, the great-great grandnephew of founder Levi Strauss, was appointed CEO. Haas, the valedictorian of his BA class at the University of California at Berkeley, a Baker scholar at Harvard University where he earned an MBA, was a White House Fellow in the Johnson Administration, a Peace Corps volunteer in the Ivory Coast and a McKinsey & Co. consultant before he joined the company in 1973 (Sherman: 5). Tusher, whose background is in marketing, joined Levi's in 1969 (Tredre, 1995a: 6).

Prior to Haas' stint as chief executive the family shareholders had decided to take the company public, given what seemed like a limitless history of growth and a promising future. The company had embarked on a period of diversification and expansion, acquiring several apparel firms throughout the late 1970s and early 1980s.⁽¹¹⁾ This coincided with the period during which Levi's was traded publically. The business press characterizes this period of following "Wall Street demand" as a "disaster." In 1984 Levi's net income had dropped 80% from four years before (Sherman: 5). That year a decision was made to refocus on core products and most of the acquired companies were sold. (For a listing of Levi Strauss holdings, please see Appendix A). Twenty-three plants were closed and 6,500 people were layed off (Scott, 1985: 19). Haas took Levi's private again in what was then the largest leveraged buyout in U.S. corporate history ($1.6 billion) (Tredre 1995a, Finnie, 14).⁽¹²⁾

While Haas (described in a 1997 profile as "meticulous," "deliberate" and focused solely on work, family and philanthropy) has been at the helm Levi's net income had gone up 18 times, to reach $735 million, and by the end of 1996 revenues during his tenure had tripled (Sherman, 1997: 5-6). Since Haas has been CEO the company's stock increased over 100 times (Colvin, 1997). Outside of the U.S. jeans market, the company is reportedly enjoying fewer problems and increasing success: "The firm's current difficulties are limited to the American jeans market. Levi's denim products are still doing well overseas; its Dockers casualwear, which had an awkward spell three years ago, has been restructured and is having its best year ever; and its new more formal Slates line is meeting its targets" (The Economist, 1997). Despite a proposal from family shareholders to take the company public again in 1996, Haas has held firm (Sherman, 1997: 6).

Meanwhile, a major "re-engineering" effort started in 1991, focusing on the US and geared toward moving products through the manufacturing and distribution process more quickly, improving customer service and forging close and/or strategic relationships with suppliers and retailers (Zeldenrust, 1994: 1). In the production system major changes included the introduction of a teamwork system (Alternative Manufacturing Systems-AMS) in which employee pay is connected to the performance of the team to which they belong, made up of 20-30 people (Zeldenrust, 1994: 3). Another aspect of re-engineering in the supply chain was an electronic data link to Levi's largest clients and automated distribution centers. First estimated to cost about $500 million, the ambitious re-engineering project ballooned to $850 million by 1994 when the Levi's board demanded the process be slowed down (Sherman, 1997: 8 ).⁽¹³⁾

In late 1997 Levi's reportedly was operating 53 plants in 50 countries (Bloomberg News, 1997). Comprehensive recent information on Levi's operations on a global scale is difficult to come by, especially data regarding the considerable amount of work that is contracted out. For information regarding Levi's (owned and leased) manufacturing, warehousing and distribution facilities utilized in the company's operations, based on 1995 figures, please see Appendix B. For a current listing of LS&CO branch offices worldwide, see Appendix C. The following sections based on recent available information on Levi's North America, Asia/Pacific and European operations suggest that changes continue to take place in all regions.

North America

Levi Strauss & Co. currently has 32 U.S. factories and 4 Canadian factories (employing 2,400) (LS&CO, 1997b; Reuters, 1997a; Bloomberg 1997). In February 1997, Levi's announced that it would eliminate 1,000 white-collar jobs (20% of its salaried work force), achieving a savings of $80 million (The Economist, 1997; Daily News Record, 1997 ). By the end of the year the company announced plans to close 11 of its U.S. plants by July, 1998. The plant closures⁽¹⁴⁾

mean layoffs for 6,395 employees (or 34% of the company's total U.S./ Canadian manufacturing workforce) and represent one of the largest layoffs in the U.S. in 1997 (LS&CO, 1997b; The Economist 1997).⁽¹⁵⁾

At the time of the announcement Levi's was operating 32 manufacturing plants and finishing centers in the U.S. and five in Canada (LS&CO, 1997b). The four Canadian factories (located in Ontario and Alberta) are all unionized (Maquila Network Update, 1998: 7).

Levi's says the jobs will not be shifted overseas, but instead the work will be picked up by workers at other "more efficient" facilities in the U.S. as a means of dealing with overcapactiy and "sluggish demand" (The Economist, 1997: 84; Waters, 1997: 18).⁽¹⁶⁾

"This is not job flight," said Haas (quoted in Medaille and Wheat, 1997: 25). Once these layoffs are made, for the first time in its history Levi's will have "more foreign than domestic workers" (Medaille and Wheat, 1997: 25).

According to Levi's, the $200 million severence package, negotiated with the Union of Needletrades Industrial and Textile Employees (UNITE!), which represents four of the plants, and the United Food and Commerial Workers (UFCW), which represents two of the plants, "far exceeds apparel industry standards" (LS&CO, 1997b).

Included in the benefits package announced in November 1997 are:
- eight months notice
- up to three weeks severence pay per year of service
- out-placement and career counseling services for six months (services vary by location)
- continuation of health care benefits through COBRA for up to 18 months
- a $500 new job bonus paid to employees upon securing new employment
- a $6,000 allowance that can be applied to a menu of benefits, easing expenses associated with relocation, education and retraining, dependent care and small business start-up
- an early retirement window for eligible employees (employees participating in the company's pension plans and who have reached age 50 and completed at least 15 years of service)
Employees eligible for the company's employee incentive program ("Global Success Sharing Plan") who are laid off due to these plant closures will receive a full payout in 2002 if the company meets its financial performance and cash flow objectives.⁽¹⁷⁾
(source: LS&CO, 1997b)

In addition, Levi's has publicized their intent to secure and pursue appropriate government assistance programs to aid the displaced workers (such as extended unemployment benefits, job training support, job search allowance and relocation funds),⁽¹⁸⁾

and has earmarked $8 million for a Community Transition Fund to assist the effected communities over the next three years (LS&CO, "Plant Closure Benefit Fact Sheet").

In this latest round of restructuring of its North American operations, Levi's seems to have benefited from lessons learned during U.S plant closures that occured earlier in this decade:

In January 1990, Levi Strauss & Co. laid off over 1,100 employees when it shut down a plant producing Dockers and Officers Corp jeans in San Antonio, TX (where operators reported wages of $9.10 per hour) and shifted the production operation to Costa Rica (where workers were paid $1.08 hour) (Erlich, 1992). In San Antonio the non-unionized mostly Latina production workers reported earning "good wages for the region" and following the layoff announcment (in some cases workers received only 24 hours notice (Chiang and Solis, 1994: 22)) they came together as Fuerza Unida (United Force), held weekly meetings, rallies, picket lines, demonstrations and a (high-profile) national boycott in pursuit of a satisfactory severence package. Workers also filed suit against Levi's, charging racial discrimination and demanding compensation for on-the-job injuries,⁽¹⁹⁾

claiming that fewer than 10 % of injured workers filed claims due to fears of management retaliation (Erlich, 1992).

The company claims they offered the workers 90 days notice (60 days are required), as well as extended medical benefits for three months, and job retraining -- "well beyond legal requirements" according to David Samson, a Levi's spokesperson (quoted in Erlich, 1992). The workers received just one week's pay per year of service and no early retirement option (Maquila Network Update, 1998: 7). Some of the funding for worker retraining came not from Levi's but agencies such as the US Federal Government's TRA/JTPA program that funds retraining through community colleges (Chiang and Solis, 1994: 22). Following the 1997 layoff announcement, Fuerza Unida reiterated its commitment to securing a satisfactory severance package for the women laid off in 1990 and has sounded the call once again for a boycott of Levi's products (Thornburg, 1998).

In 1994, 109 employees at an El Paso manufacturing facility filed suit, charging employment discrimination and claiming that the company's "return to work" programs for employees receiving workman's compensation (again, most suffered from carpal tunnel syndrome) were used to force workers to quit (LS&CO, 1997a; Gardenier, 1997: 3). Nearly three years later the cases of five plaintiffs were successfully argued in El Paso (the remaining plaintiffs will have their day in court in a serious of separate cases). On September 8, 1997 the jury awarded the plaintiffs $600,000 each in compensatory damages and the day after announced a $10 million award to the plaintiffs for punitive damages. Meanwhile, Levi's is appealing the verdict and demanding the disqualification of the presiding judge, John L. Fashing, from further proceedings. Levi's Senior Vice President and General Counsel Albert Moreno said there was "no basis" for the court's findings and termed the damages awarded "outrageous, unwarranted, and egregious." He accused Judge Fashing of "naked disregard for his obligations under Texas law" and expressing "open hostility...during the trail toward Levi Strauss and Company and its legal counsel" (quoted in LS&CO, 1997a).

Fuerza Unida suggests that the planned shutdown of three Levi's facilities in El Paso this July is linked to the $10.6 million suit won by the ex-Levi's El Paso employees (WCRC, Nov. 7, 1997).

Europe

Realizing the appeal of their products to European consumers, Levi's established an overseas presence early on. "In 1993, 65.8% of sales were conducted in the USA..., 22.6% in Europe and the remaining 15% elsewhere. U.S. sales grew annually by only 3.7% over the next two years, whereas European sales increased by an annual 15.8%" making Levi's the brand leader in every national market in Continental Europe. In 1995 nearly 70% of 15 to 24-year-old Europeans reportedly owned a pair of Levi's (Finnie, 1996: 32-33; Tredre, 1995a: 6). In 1997 Levi's had 11 European factories (Reuters, 1997a; Bloomberg 1997).

Levi's European workforce is about equal to the number of employees being laid off in the U.S. Restructuring of European operations is rumoured,⁽²⁰⁾

but no concrete plans have been announced, and workers have been pressuring the company for a European-level consultation to clarify plans for the future (Itschert, 1998: 5).

Asia/Pacific

The recent announcement this April that Levi's will expand its China operations suggests restructuring in the Asia/Pacific region. Jim Fraser, the president of Levi Strauss Asia Pacific, believes that "China could become the key manufacturing nation for the company's Japanese and South Korean markets, which generate two-thirds of its $468 million in Asian revenue" (Landler, 1998: 1). The company has a direct marketing operation in Hong Kong and now plans to open one on mainland China (Landler: 1). In late 1997 Levi's revealed that production in New Zealand would come to a halt (40 jobs) after 26 years (World Reporter, 1997).

Meanwhile, countries in the region currently experiencing currency problems, such as Indonesa (where the local currency has lost 75% of its value during the past eight months), are also prime candidates as sites for increased production for Levi's. Marimoetoe Manimaren, president of Texmaco Group, in Indonesia, recently reported that his profit margin in garment production was 6 to 8 % but with the falling rupiah it is now up to 10 to 12 %. He told reporters that Levi's CEO Bob Haas visited his operations this spring and the company doubled last year's order (Paul, 1998: 4).

IV. Why Focus on Levi's?

Levi Strauss & Co. is not only an industry leader in terms of sales and volume, as described above, but also in terms of actions taken within the corporate community to recognize consumer demand for socially-responsible products. In March 1992 Levi Strauss & Co. unveiled its "Global Sourcing & Operating Guidelines," establishing a code of conduct for all contractors who manufacture or finish Levi's products, as well as a code for selecting countries in which to do business.

This announcement came on the heels of a U.S. Department of Labor investigation and lawsuit against a Levi's contractor on the island of Saipan, a U.S. possession in the Pacific.⁽²¹⁾

The U.S. Dept. of Labor lawsuit, initiated after an investigation following grievances filed by workers in 1989, sought $10 million in wages owed to 1,350 workers, mostly young women who were brought to the island from China to work under contract for two to three year stints at factories owned by the Hong Kong-based Tan family. The Tans, who paid a $500,000 fine to the government in 1991 for falsifying documents, denied the charges (Swoboda, 1992; Lin, 1997). The working situation was described as "slavelike":

"Once in Saipan, the workers were housed in fenced and guarded barracks, and were escorted to work in factories guarded by security personnel. The workers were required to surrender their passports to the factory owners upon arrival in Saipan. They worked seven days a week for less than the minimum wage, with no overtime pay, and lived and worked in unhealthy and unsafe conditions" (ITGLWF Newsletter, 1992: 12).

Though the Tans agreed to meet minimum wage and overtime rules, and wrote checks totalling about $3 million in backpay... "soon after, workers were coerced into giving back the checks, workers who refused were fired and shipped back to China" (ITGLWF Newsletter: 12). Levi's cancelled their contract with the Tans, who had supplied 3% of their imports (ITGLWF Newsletter: 12).⁽²²⁾

As Levi's moves more towards an emphasis on branded-marketing, situations that might tarnish the brand image increasingly become a cause for concern. Following the announcement of the new guidelines, Levi Strauss Vice President Bill Dunn, involved in the design and implementation of the guidelines, commented on the link between the codes and Levi's marketing strategy: "There's the matter of protecting our brand identity" (quoted in Dumaine, 1992). Commenting on the great expense of the initial "auditing" of all Levi's operations to begin assessing compliance with the new codes, Dunn said in April 1992 that though costly "...if the image of our brands is at risk, the cost could be far greater" (quoted in Borrus, Barnathan and Engardio, 1992: 16). Haas concurs: "In today's world," he said, "a TV expose on working conditions can undo years of effort to build brand loyalty" (quoted in Mitchell & Oneal, 1994: 40).

According to Levi's, the company was "the first multinational company to establish comprehensive Global Sourcing & Operating Guidelines." In this sense then, Levi's has helped to establish norms of behavior for multinationals which seek to follow ethical standards, legal requirements, environmental requirements, employment standards and maintain certain levels of community involvement. Indeed, in the United States, Levi Strauss is recognized as a "trendsetter" by the Department of Labor because of their commitment to monitoring labor conditions in their factories (Holmstrom, 1996). Nike and Reebok later followed suit, introducing codes of their own.

Currently included in Levi's set of work place standards and business practices are stipulations that entitle workers to:

1.1. the right of free association

2.2. wages and benefits that comply with any applicable law and match the prevailing local manufacturing or finishing industry practices

3.3. at least one day off in seven

4.4. a safe and healthy work environment (if residential facilities for workers are provided they must be safe and healthy as well)

5.5. no corporal punishment or other forms of mental or physical coercion

Additionally, the guidelines do not permit those who are less than 14 years of age and younger than the compulsory school age to work for Levi's. The guidelines prohibit the use of prison or forced labor; and state that Levi will "...identify prevailing local work hours and seek business partners who do not exceed them except for appropriately compensated overtime. While we favor partners who utilize less than sixty-hour work weeks, we will not use contractors who, on a regular basis, require in excess of a sixty hour week" (see Appendix C for full text of Guidelines).

The Global Sourcing and Operating Guidelines stress that these standards will be continuously evaluated and state that failure to meet these criteria will result in the formation of a corrective "plan of action" and even termination of the contract:

"All new and existing factories involved in the cutting, sewing, or finishing of products for Levi Strauss & Co. must comply with our Terms of Engagement. These facilities are continuously evaluated to ensure compliance. We work on-site with our contractors to develop strong alliances dedicated to responsible business practices and continuous improvement.

If Levi Strauss & Co. determines that a business partner is in violation of our Terms of Engagement, the company may withdraw production from that factory or require that a contractor implement a corrective action plan within a specified time period. If a contractor fails to meet the corrective action plan commitment, Levi Strauss & Co. will terminate the business relationship" (emphasis added, LS&CO, "Global Sourcing & Operating Guidelines").

V. Codes of Conduct: Reaction and Application

The move to adopt the Code of Conduct won praise for Levi's as a step toward corporate "social responsibility." The Council on Economic Priorities (CEP), a New York-based nonprofit research group that evaluates policies and practices of U.S. corporations, awarded Levi's its 1994 America's Corporate Conscience Award in the category of "International Commitment" for the company's "...commitment to nonexploitive work practices in developing countries, including paying to send former child laborers to school" (Coolidge, 1994a).⁽²³⁾

Since the late 1980s the corporate "social responsibility" movement among U.S. corporations has taken off, reflecting the importance of maintaining a socially-responsible image. By the early 1990s one survey found that following price and quality, "one-third of Americans consider a company's socially responsible practices most important in deciding whether to buy a brand" (McLaughlin, 1994). In a 1996 poll 84% of consumers surveyed said they would be willing to pay slightly more for their products made overseas if they could ensure that they were made under good working conditions (Haq, 1996: 1). Meanwhile, companies sought credentials for their commitment: By 1994 memberships in the Washington-based Business for Social Responsibility and the San Francisco-based Social Venture Network had swelled to over 1,100 (McLaughlin, 1994).

It is against this backdrop that Levi's has succeeded in positioning itself with a corporate identity (among the business & mainstream U.S. press) as a "more caring" company.⁽²⁴⁾

In the early 1990s, decisions to halt production in China and not to do business in Burma were heralded as model behavior for corporations interested in human rights issues. The 1993 announcement to stop direct investment and subcontracting production in China earned headlines for Levi's. One report stated that "Levi Strauss is believed to be the first apparel manufacturer to shun entire nation's because they don't measure up to its standards for treatment of citizens" (Smith, 1993: 10D). At that time Levi Strauss reported they were producing 2% of their garments in China at 30 contractors (approx. 5 million shirts and pants per year). Meanwhile, reporters noted that "...Levi appears to be sacrificing little. It has no investments in the country at the moment and only a small portion of its production is currently located there. Furthermore, the company has also said that it will continue to purchase Chinese fabric and will continue to allow distributor Jardine Marketing Services to sell its clothes" (Goll & Zuckerman, 1993).⁽²⁵⁾

In fact Levi's never fully pulled out of China: recent reports show that the company produces 800,000 units per year in China (vs. 3 million/yr before the 1993 decision to begin withdrawing from the country). Levi's President Peter Jacobi said the withdrawal stopped in 1996. By 1998 the company revealed plans, discussed in Part III, for expansion in China (Landler, 1998: 1).

Levi's progressive reputation is due not only to its sourcing and operating guidelines, but to the pursuit of projects in communities where Levi's operates and to other charitable donations. The company, along with the Levi Strauss Foundation, reports over $20 million annually in charitable gifts to community organizations in nearly 40 countries" (LS&CO, 1998g). For example, "Project Change," a local initiative in four U.S. Levi's communities, that is geared toward combatting institutional racism, easing racial tension, preventing "hate crimes," and promoting diversity in local government, has received $8.6 million from the Levi Strauss Foundation. Recently, U.S. President Bill Clinton awarded Levi's the first-annual Ron Brown Award for Corporate Leadership for its support of this project (LS&CO, 1998c).⁽²⁶⁾

Despite approval from within the business community, scrutiny of the Levi's code raises several important questions:

Why stipulate a wage guarantee tied in to the local minimum wage? Minimum wage levels are notoriously below living wage levels--even in Levi's home country, the United States. Levi's reaction to this criticism is to plead confusion over the precise meaning of the term "living wage." They contend that Levi's attempts to pay wages above the local average for garment manufacturing in the country in which it operates, but that "...it is difficult to assess wage levels in remote areas and in countries where a contractor may have the only manufacturing plant in the entire region, making it difficult to assess the industry norm" (New Consumer/CEP, 1994). This line of argument, though, would seem to support adopting a living wage pay scale system, based not on an industry norm but on the actual cost of living in a specific context. The current reliance on the minimum wage level would also suggest that an important task -- familiarizing management with the local economic/social context -- is not being done. Proponents of independent monitoring see a role for local NGOs, unions and workers associations in the monitoring process. The gathering of information pertaining to local cost of living is often a process that local NGOs and other groups are already undertaking. Why not utilize such resources?

Why does the Levi's code designate 60 hours to be a standard workweek? This is above the ILO standard which interprets a reasonable number of hours to be 48. Why not make reference to ILO conventions in this code? These standards represent long-standing internationally-accepted standards and are expressed in language that is agreed upon and leave little room for misinterpretation.

Applying the standards could facilitate the abrupt relocation of operations. How can workers be safeguarded against this?⁽²⁷⁾

Perhaps the most important shortcoming of the code is related to accountability and auditing. The Levi's Global Sourcing Guidelines do not require independent monitoring to assure that contractors uphold the Levi's code.⁽²⁸⁾

Instead, the enforcement mechanism employed by Levi's is a form of self-policing which relies on internal auditors, Levi's employees who make sourcing decisions. When the Levi's guidelines were adopted, the company was working with approximately 700 contractors in 60 countries (Leipziger, 1994: 3). A standard audit form was created to ensure consistency among auditors, who receive training and gather annually to confer on contractors, according to Levi's (New Consumer/CEP, 1994: 7). It is unclear how much and what sort of training these auditors receive. In 1997 Levi Strauss representatives said they had had 60 people worldwide working on monitoring the code and quality control (Belgian CCC, 1997:2).

Based on information gathered during their initial round of audits Levi's reported that 70% of their contractors were in compliance and 30% were not (of the latter group, 25% "needed improvements in order to be in compliance," while 5% were dropped entirely (Kehoe, 1993: 9). It is unclear what subsequent rates of compliance have been or how monitoring procedures have evolved. While researchers who have seen samples of Levi's questionaire have found it to be extensive, it remains unclear how often and in hwat manner this internal monitoring process is carried out. ( In 1997 the Council on Economic Priorities reported that the average questionaire used by Levi's to monitor suppliers was 20-30 pages (Research Report, 1997).) Levi Strauss has said that their audits "often include interviews with employees, both at the factory and away from the factory" (U.S.Deparment of Labor, 1996, cited in Van Eijk & Zeldenrust: 45) but in a meeting with representatives from the Belgian Clean Clothes Campaign, Levi's executives themsevles explained that the audits are carried out in conjunction with management and workers are not consulted (Belgian CCC, 1997: 1). Indeed site visits by researchers (described below) revealed that meeting with workers off premises (or at all) is rarely standard procedure during Levi's process of internally monitoring their code. Interviews reveal that there is no mechanism to include workers, workers representatives or other workers organizations has been introduced in the process of monitoring the implementation of the codes.

In response to requests from the Clean Clothes Campaign that Levi Strauss improve the standards outlined in their guidelines by adopting the "Code of Labour Practices for the Apparel Industry Including Sportswear" (a code of conduct endorsed by this network of NGOs and trade unions) that includes references to ILO standards and adopt a system of independent monitoring, Levi's declined. "While there is always room for improvement, we feel our approach is working well," wrote Patrick Neyts, head of Environment, Health & Safety for Levi Strauss Europe in a letter to the CCC in early 1998. In a 1997 meeting Levi's executives told the Belgian CCC that there is an ongoing internal discussion at the company about external control systems, but they do not want to be "police-agents" of their partners (Belgian CCC, 1997: 2).

VI. In the Workplace: Compliance or Contradiction?

With the transparency and quality of the monitoring of the codes in question, the validity of each of the standards outlined in the Levi's Global Sourcing and Operating Guidelines remain questionable. Critics charge that in practice Levi's has different standards for different employees -- one for those at the corporate headquarters and another for people working at their factories. Because of this perception of a "double standard" Levi Strauss was dropped from the book The 100 Best Companies to Work for In America (Mitchell and Oneal, 1994: 41).

Indeed, in a 1996 case study of Noveca Industries, a facility in the Philippines with 100% of its production dedicated to Levi's, numerous violations of the Global Sourcing and Operating Guidelines were found. Breaches of the Levi's code were documented on several counts: workers worked more than 60 hours per week; overtime hours were mandatory (though the code stipulates that workers must be present voluntarily); employees did not receive one day off in seven days; workers received less than the minimum wage; union leaders were threatened, in violation of the guarantee of free association; and working conditions were not always safe or healthy. This was despite Levi's claim that "during their regular visits with contractors, our employees conduct full investigations including detailed questionnaires, on-site plant inspections and off-site interviews with workers" (Shank quoted in Development and Peace, 1996: 6). Instead, researchers found:

"Noveca receives advance warning of any upcoming Levi Strauss inspections and, as a result, is able to prepare for such visits. People interviewed separately told us that in August 1666, plant management informed the workers that representatives of the United States Department of Labour would soon visit the plant. As a result, the employees had to clean the plant from top to bottom in preparation.

It was at that very same moment that Noveca began paying its staff the minimum wage...Our interviewees told us that no representative of the Department of Labour ever came, but that people from Levi Strauss did visit the administrative building in September 1996...Aside from compliance with the minimum wage, nothing else has changed at the plant: work hours are still as long, overtime is still mandatory...In our view, meeting with workers in locations where they feel safe would have allowed Levi's inspectors to become aware of the plant's problems as a whole....One interviewee told us that "it's the Levi's people (i.e. the ones in charge of production and compliance with the code) who make us work on Sundays to meet production targets" (Development and Peace, 1996: 7).

In their conclusion, the authors called for independent monitoring as a way to remedy the situation (for more on this study, see Development & Peace, 1996). In response to the Noveca case study Levi's maintained that Levi's representatives were best-suited for the task of monitoring working conditions: "Levi Strauss personnel are in a better position than anyone else to monitor our guidelines and ensure that they are complied with," wrote Gordon Shank, then president of Levi's Canada (now president of Levi's Americas) (Development and Peace, 1996: 9). According to those who carried out the fieldwork:

"...Our information, obtained in several plants in Asia and Central America, indicates that the opposite is true. Levi Strauss would actually benefit it it were able to count on independent monitoring of its codes. Here's why: these workers quite naturally associate Levi's representatives with their own employer,whom they fear. They are far more likely to trust the representatives of independent local organizations. Independent monitoring would therefore strengthen Levi Strauss' efforts and it would prove to workers that Levi's is doing its best to ensure compliance with its code.

Our exchanges with workers in Asia left no doubt that the main priority of Levi Strauss personnel is production and not working conditions. During our tour of Thailand and the Philippines, we met union representatives in four factories producing clothes for Levi Strauss and other major brand names.

Everyone knew that Levi's representatives visited their plants. However, the role of these representatives was seen as related to production concerns only.They stated that Levi's personnel had never asked them about working conditions and none had ever heard of the Levi's code of conduct. There was not doubt in their minds that the few benefits enjoyed by union members were essentially the fruits of their organizing efforts and not of any code. It had never occurred to them to appeal to Levi's for help in solving their problems" (Development and Peace, 1996: 9).

Other examples of code violations have been recorded by other researchers examining working conditions in factories doing work for Levi Strauss in various parts of Asia. In November 1995, a visit to a Dhaka factory owned by the Azim Group, in Bangladesh revealed a hot and crowded workplace where workers were covered with white dust. Interviews with operators at a factory in Sabar, also owned by Azim, revealed that they were receiving wages that were only about 1/3 of what the general manager claimed to be paying his employees (SOMO/CCC, 1995).

In 1995 workers from the PT Great River factory, producing jeans for Levi's reported that wages were not enough to cover basic needs. They told researchers that 70-75% of the workers at this facility located in Indonesia had been participating in a strike. Demands dealt with wages, food allowance, transport allowance, leave, stopping SPSI and the freedom to choose an independent trade union (SOMO/CCC, 1995).

At the PT Ulinda plant, also in Indonesia one workers reported that in some cases work shifts strecth from 8 a.m. until 6 a.m. the following day to meet targets (SOMO/CCC, 1995). That same year at PT Wearwel International in Jakarta, the company's chief executive reported that Levi Strauss had been a customer for six years and had asked them to sign a code of conduct (SOMO/CCC, 1995). Meanwhile though, workers reported that they are closely watched and security guards even patrol the toilets -- which workers must obtain tickets to use, though these are not always given.Workers must meet daily targets or may be fired. When deadlines are being pursued, workers say they must work overtime (SOMO/CCC, 1995). Though workers would like to demand better conditions, there is a great fear of being fired, indeed in interviews workers reported they are afraid to even talk in the building.

At P.T. Bali Nirwana Garments in Tangerang, also in Indonesia, 5% of production is devoted to making jeans for Levi Strauss. Though they subcontract to companies, the purchasing manager interviewed in late 1995 said that in terms of guaranteeing that the subcontractors match even local health & safety requirements the best he can do is to advise them to do so (SOMO/CCC, 1995). As for guidelines pertaining to labor conditions/issues in 1995, he reported that no clients have asked them to sign a code of conduct (SOMO/CCC, 1995).

At the Korea Lanka factory located in Colombo, Sri Lanka workers produce Dockers products for Levi Strauss in the U.S. In 1995 operators reported they worked every every day of the week. Management reported that though the GAP asked questions related to labor issues and conducted evaluations, Levi Strauss did not (SOMO/CCC, 1995).

In Thailand, the TBI Group of Companies, based in Prahumthani does work for Levi's. Though there is a trade union at their Thai Iryo Garment, Ltd. facility, in 1995 researchers were told that buyers or quality controlers never visit their offices to ask questions (SOMO/CCC, 1995).

Recent reports from producers for Levi Strauss in Asia, specifically from Indonesia will be presented at the International Forum on Clean Clothes. Evidence to be presented focuses on current conditions at the Yulinda Duta Fashion factory (in Bogor) and the Sandrasine factory (in Tangerang), and are briefly described here.

At the Yulinda Duta Fashion factory (2,000 employees, 98% women) are are not paid the legal minimum wage, they regularly work 75 hours per week, seven days a week. Overtime is compulsory. Workers do not have the right to organize themselves, and are obligated, whether they want to or not, to join SPSI, the government-approved union. Maternity, menstruation and breast-feeding rights are not respected. The factory was set up eight years ago, but the workers have still never been told about the Levi's code and it is not displayed in the workplace. When visitors come to check for quality control, workers considered loyal to the management are selected to talk to the auditors. Workers went on strike and managment accepted their demands for improved working conditions and granting the rights denied to the women workers, but on paper only. Those involved in the strike were intimidated and ultimately were fired.

At the Sandrasine factory the conditions are also not good and worker's legal rights are not respected. The 3,000 workers, the majority women, have to share just 10 toilets. The wage is below the leagl minimum and there is no allowance for food or transportation and no attendence bonus, as there are at the Yulinda Duta facility. Employees work from 7:30 a.m. until 6 p.m. but many times they have to go on working until 9 p.m. Overtime is compulsory and workers who do not stay on late suffer intimidation or are fired. Workers went on strike in 1994 demanding higher wages, a transportation/food allowance, and breast-feeding/maternity/menstruation leave. Managment accepted the wage demand only. Two years later another strike took place, requesting the same things. Following a march to a local government office, those suspected of being involved in the action (20 people) were intimidated and them one by one were fired. As at the Yulinda Duta Fashion factory, the workers at this factory, founded four years ago, know nothing about the Levi Strauss code. When auditors come to visit the discussion, if there is one that includes workers, covers production only and ways in which quality can be improved. (These two summaries are based on information provided by the Assosiasi Buruh Garment (ABG) (Association of Garment Factory Workers) based in Jawa Barat, Indonesia. For the full contents of these descriptions of current working conditions, please see Appendix F. )

These recent reports from Indonesia include several violations of Levi's guidelines. Evidence of violation of the right to free association, a fundamental human right, according to the Universal Declaration of Human Rights, was noted.⁽²⁹⁾ Violation of minimum wage requirements and forced overtime were also noted, and the description of auditing procedures to monitor compliance with the company's code of workplace standards was superficial, at best. The Levi's Guidelines themselves were not even displayed in the workplace, and can hardly be considered to be implemented in full.

Evidence showing that the code is not thoroughly implemented or monitored is found in Levi's operations in other parts of the world, as well. Levi's employees in Hungary enountered obstacles in establishing a union, a clear contradiction of the right of free association guaranteed under the code. Finally in 1996 a symbolic presence was accepted. Two more years of struggle followed and by 1997 a union was established (Itschert: 5).

Recently, researchers from SOMO and the Dutch Clean Clothes Campaign visited facilities producing for Levi's in Eastern Europe and Africa and found examples of non-compliance with the company code. In 1997, researchers visited Levi Strauss Poland and found that the Global Sourcing Guidelines were not displayed anywhere in the facility. Indeed, when questioned about the code one representative of management did not even know what the researchers were talking about, though another management person did, claiming the guidelines were hanging on a wall. When researchers located the document they found that it was not the Levi's code of conduct, but a health and safety statement. Management admitted that the code had not been translated into Polish. (Note that Levi's has had a production facility in Poland for over five years). This situation is interesting to note, considering that in a 1997 meeting with the CCC, Levi Strauss' European executives reported that in Europe that year there had been no violations of the code (Belgian CCC, 1997: 2). It is difficult to give credibility to such an inventory of grievances when the document on which these standards are based is not easily accessible to workers. Meanwhile, despite a promise to send a copy of the Polish guidelines to the researchers when the translation was complete, five months later the document has still not appeared (SOMO/CCC, 1997b).

Most shocking was evidence of code violations gathered by researchers visiting facilities producing for Levi's (Italy) in Mauritius.⁽³⁰⁾ Chinese women workers are imported through brokers to work under contract for 2 to 3 years.⁽³¹⁾ The women work seven days a week. Monday through Friday they work from 7:30 a.m. until 11:30 p.m. Their 30 minute dinner breaks and their "time off" are spent at housing facilites provided by the company. Women live literally stacked on top of each other, 4 to 8 per tiny room. When researchers were able to get past the gates and visit these housing facilities they found not only cramped quarters, but dirty concrete showers and squat toilets which stank (SOMO/CCC, 1997a). For a recent report from a local NGO which works closely with the Chinese migrant worker community, please see Appendix G. This scenario is strikingly reminiscent of the conditions outlined in the Saipan lawsuit -- the very scandal which publicized the plight of imported Chinese female laborers who worked in shocking conditions, and prompted Levi's to go forward with their code of conduct. In Africa, in 1997, the Levi's Guidelines, which also stipulate that residential facilities provided for workers must be safe and healthy, were not seen anywhere by the researchers. It seems that six years after Levi's established their Global Sourcing and Operating Guidelines the company still has a long way to go in acheiving real progress in their implementation.

VII. Summary and Conclusion

While Levi Strauss & Co. has undertaken change in the past to bring its policies and practices in line with its stated commitment to social responsibility this has often followed public demand. For example, the decision to move ahead with the Global Sourcing and Operating Guidelines occured after the terrible conditions in Saipan were publicized as the subject of a U.S. government investigation. Subsequent decisions to invoke this code of conduct have followed publicity surrounding violations of the guidelines. For example, after workers at the Jakarta-based PT Duta Busana Danastri (producing Levi's and Dockers brand clothing) filed grievances with Indonesia's Human Rights National Commission protesting low wages, poor working conditions and inhumane treatment by management including strip searches by security guards (two years after the Global Sourcing Guidelines were adopted), the issues were raised in the local media. Approximately one month later it was reported that Levi Strauss canceled its orders with the company. Meanwhile, a labor specialiest with the Indonesian Legal Aid Foundation noted that at the that time, Levi Strauss was doing business with 25 garment factories in Indonesia, "12 of which have been recorded to have serious problems with their workers" (The Jakarta Post, 1994a, 1994b). Recently, Levi's has demonstrated willingness to provide laid-off employees with a more acceptable severance package, following an eight-year campaign by previously laid off workers in the same region lobbying for improved terms in their severence package.

The cases described above and presented at the International Forum on Clean Clothes provide clear examples of the inconsistencies that currently exist between Levi's stated set of standards, as outlined in the Global Sourcing and Operating Guidelines, and the actual situation found in Levi's manufacturing facilities. These examples demonstrate, among other things: (1) limitations placed on employee's right to free association,; (2) violations of the minimum wage requirement; and (3) violations of the guarantee that workers have one day off in seven, all of which are in direct contradiction to the guarantee made in Point 5 "Employment Standards" under the "Terms of Engagement" included in Levi's Global Sourcing and Operating Guidelines.

The evidence presented raises serious questions as to how, under the current system, not only the public, but Levi's officials themselves, can come to know whether or not their guidelines are being followed. Most importantly, workers have often not benefited from the improved labour standards which the code, at least on paper, was intended to guarantee. A gap remains between what is on paper, what is portrayed in public relations and what occurs in practice. In practice those producing garments for Levi Strauss are often not even aware of the Levi's Guidelines. Even if the Global Sourcing and Operating Guidelines were to become more than an untranslated, unposted document in all workplaces were garments are produced for Levi's, in practice the current implementation and monitoring system falls short.

By positioning itself as a "trailblazer" in the pursuit of a higher level of corporate responsibility, Levi Strauss & Co. invites a higher level of scrutiny. Levi's President Peter Jacobi recently remarked that "We have told our people around the world what we value, and they will hold us accountable. Once you do that, it's like letting the genie out of the bottle: You can't go back" (quoted in Sherman, 1997). Indeed, the respect of customers, colleagues and employees is only warranted when true accountability and adherence to these pathbreaking standards become the norm.

Levi's invites suggestions for improvement to their Codes of Conduct:

"Levi Strauss & Co. is committed to continuous improvement in the implementation of our Global Sourcing & Operating Guidelines. As these standards are applied throughout the world, we will continue to take into consideration all pertinent information that helps us better address issues of concern, meet new challenges, and improve our guidelines" (LS&CO, "Global Sourcing & Operating Guidelines").

Levi Strauss & Co. has advocated "continuous improvement" in all facets of its operations,⁽³²⁾ but thus far concrete action to improve the implementation and auditing of the Global Sourcing & Operating Guidelines has not been undertaken. In the past, Levi's has responded to their present system of monitoring by stating that they themselves are best-suited to spot infractions in the workplace. But given the proliferation of infractions, noted above in Part VI, these auditors do not seem well-suited to successfully execute such a task. Indeed, the role of a quality controler and that of one charged with verification of labour standards are significantly different and require distinctive coureses of training. To continue to maintain that company-controlled auditing of labour standards is a success suggests willful ignorance, at the very least.

While Levi Strauss & Co. has lead the industry by drafting standards for a company with a social conscience to follow, they now have the opportunity to stay ahead of their competition by upgrading, implementing and upholding them to the fullest extent. This would truly distinguish their brand in the most positive of ways.

Appendix A

Levi Strauss Holdings

The most recent available information on Levi Strauss holdings shows ownership of the following companies:

Levi Strauss Associated Inc.

1155 Battery Street, Levi Plaza, San Francisco, CA 94111

* Levi Strauss & Co. U.S.A.

** Anomalus Canada Ltd. Canada

** Battery Street Enterprises Inc. U.S.A.

*** Fra-For S.Aa, Ets. France

**** Civile des Terrasses, Ste. France

*** KIR Inc. U.S.A.

*** Koracorp Industries (Hong Kong) Ltd. Hong Kong

*** Koracorp Management Co. Inc. U.S.A.

*** Koratron Co. Inc. U.S.A.

**** Fashion Portfolio Inc. U.S.A.

*** Koret Canada Inc. Canada

*** MCO Inc. U.S.A.

*** Mission Place Inc. U.S.A.

*** Resistol Sales Inc. U.S.A.

** Great Northern Apparel Inc. Canada

** Levi's Accessories Inc. U.S.A.

** NF Industries Inc. U.S.A.

** Frank Shorter Runnin Gear Japan Inc. Japan

** Levi Strauss Employee Purchase Plan Inc. U.S.A.

** Levi Strauss Eximtex S.A. Switzerland

** Levi Strauss Export Sales Corp. U.S.A.

** Levi Strauss Financial Services S.A. Belgium

** Levi Strauss International Finance Co. N.V. Netherlands Antilles

** Levi Strauss International Inc. U.S.A.

*** Levi Strauss & Co.Europe S.A. Belgium

*** Levi's (Malaysia) Sdn. Bhd. Malaysia

*** Running Gear Inc. U.S.A.

*** Santone Industries Inc. U.S.A.

*** Santone Manufacturing Corp. U.S.A.

*** Levi Strauss de Argentina S.A. Argentina

*** Levi Strauss (Asia) Ltd. Hong Kong

*** Levi Strauss (Australia) Pty. Ltd. Australia

*** Levi Strauss Belgium S.A. Belgium

*** Levi Strauss do Brasil Industria e Comercio Ltda. Brazil

*** Levi Strauss Chile Ltda. Chile

*** Levi Strauss Continental S.A. Belgium

*** Levi Strauss de Espana S.A. Spain

*** Levi Strauss (Far East) Ltd. Hong Kong

*** Levi Strauss France S.A. France

*** Levi Strauss Germany GmbH Germany

*** Levi Struass Inter-America Inc. U.S.A.

*** Levi Strauss Italia S.p.A. Italy

*** Levi Strauss de Mexico S.A. de C.V. Mexico

*** Levi Strauss Nederland N.V. Netherlands

*** Levi Strauss (New Zealand) Ltd. New Zealand

*** Levi Strauss Norway A/S Norway

*** Levi Strauss del Peru S.A. Peru

*** Levi Strauss (Philippines) Inc. Philippines

*** Levi Strauss (Portugal) Confeccoes Ltda.(in liquidation) Portugal

*** Levi Strauss (Singapore) Pte.Ltd. Singapore

*** Levi Strauss (Suisse) S.A. Switzerland

*** Levi Strauss Sweden AB Sweden

*** Levi Strauss (U.K.) Ltd. U.K.

*** Levi Strauss de Venezuela C.A.(in liquidation) Venezuela

*** Suomen Levi Strauss Oy Finland

*** Tops & Bottoms International C.A. (A) Venezuela

** Levi Strauss Overseas Finance N.V. Netherlands Antilles

** Levi Strauss Pan America Inc. U.S.A.

** Levi Strauss of San Juan Inc. U.S.A.

** Zenith International Insurance Ltd. Bermuda

(Source: Who Owns Whom, 1997: 227)

Appendix B

Levi's (Owned & Leased) Manufacturing, Warehousing & Distribution Facilities (1995)

At the time that these figures were compiles, manufacturing and warehousing faciliites outside the U.S. were located primarily in Canada, Spain, theUnited Kingdom, Brazil and Belgium. The largest distribution facilities outside ofthe U.S. were located in Belgium, Germany and Canada.

Source: Moody's OTC Unlisted Manual, 1997

Appendix C

Levi Strauss & Co. Branch Offices

Source: Levi Strauss & Co, http://www.levi.com

Appendix D

Levi's San Antonio

The following description is excerpted from an article written by Sheila Contreras in 1995 and based on interviews with Petra Mata and Irene Reyna, both former employees at Levi's South Zarzamora Street plant in San Antonio, Texas. Mata, who logged 14 years at the factory, and Reyna, who worked there seven years, are both members of Fuerza Unida, the workers organization that continues to seek redress for outstanding demands stemming from the 1990 layoffs.

"The day before the closure, executives had sequestered supervisors and told them that the plant was going to shut down, preventing them from communicating with their co-workers. The next morning, approximately 1,150 mostly Mexican immigrant and Mexican-American women were permanently laid off. Subsequently, the employee pension fund "mysteriously" disappeared, and many workers have been left uncompensated for permanent injuries that dramatically restrict their ability to continue working

In 1981, when Levi's took over the South Zarzamora site, production switched from men's sports jackets to Docker's pants, without changes in equipment. Petra and Irene both tell of the rise in injuries, mainly from Carpel Tunnel Syndrome, that followed. These injuried predominantly resulted from the "redesigning" of the sewing machines, which consisted of sawing them in half and removing the table area on which the fabric previously rested. Employees were forced to manipulate the heavier, less flexible material literally in the air. Despite numerous injuries, Levi's discouraged the reporting of painful conditions and the use of company worker's compensation insurance to seek treatment. Worker were told that they did not need the space, which instead was taken up by more workers and more machines to complete the additional sewing tasks required for the pants. As a result of the additional labor and the increased physical and emotional stress, production slowed. Reyna states that Fuerza Unida has discovered that in the fall of 1989, the engineering department of the plant was instructied to 'go all over the plant and add little things to our existing operations, for instance if I was paid a certain amount to sew up and across, they added down and across for the same pay." These tactics were adopted after the November 1989 fiscal year in which the company had posted record profits of $272.3 million. Giving the South Zarzamora plant employees a "miracle workers bonus" of $200 in the summer of 1989, Levi Strauss and Company told them that they were responsible for most of that profit.

...The memory of the plant carries with it a lot of pain. Not just the physical pain of lingering numbness in the hands, which turns into excruciating pain in the wrists, elbows and spine...Emotions ran high the day of the plant closure and still do, as Irene and Petra remembered their companeras, and themselves, speechless, walking around in a daze, falling to the floor in a heap, ....For many of these workers, who often are not native English speakers and have remained outside the institutions of education in this country, the prospects for a decent livelihood to support themselves and, in many cases, their children, are dismal. Juanita Macias, who worked at the plant for fifty years, before and after it was Levi's, now receives a mere $47 a month in pension."

Appendix E

Levi Strauss & Co. Codes of Conduct

"Levi Strauss & Co. Global Sourcing & Operating Guidelines"

Source: Levi Strauss & Co, http://www.levi.com

Levi Strauss & Co. seeks to conduct its business in a responsible manner. In 1991, Levi Strauss & Co. was the first multinational company to establish comprehensive Global Sourcing & Operating Guidelines.

Business Partners

Our Global Sourcing & Operating Guidelines help us to select business partners who follow work place standards and business practices that are consistent with our companys policies.These requirements are applied to every contractor who manufactures or finishes products for Levi Strauss & Co. Trained inspectors closely audit and monitor compliance among approximately 500 cutting, sewing, and finishing contractors in more than 50 countries.

Partnerships That Work

For Levi Strauss & Co., implementing our guidelines is a comprehensive and resource-intensive effort. Our goal is to achieve positive results and effect change not to punish contractors for transgressions. Through our guidelines, we seek long-term solutions that will benefit the individuals who make our products and will improve the quality of life in the communities in which they live.

In Bangladesh, our initial Terms of Engagement evaluations revealed that several underage girls were working in two contractors' facilities. Rather than dismiss the girls, which would have put them at risk of exploitation and economic hardship, Levi Strauss & Co. teamed up with the contractors to develop an innovative solution.The contractors agreed to stop employing underage workers, and to continue to pay a salary to the girls, provided that they attend school. Levi Strauss & Co. paid for tuition, books, and school uniforms for the girls. The contractors, in turn, pledge jobs for the girls after completion of their schooling.

The Levi Strauss & Co. Sourcing & Operating Guidelines include two parts:

I. The Business Partner Terms of Engagement, which deal with issues that are substantially controllable by Levi Strauss & Co.s individual business partners.

II. The Country Assessment Guidelines, which address larger, external issues beyond the control of individual business partners (e.g., health and safety issues and political, economic, and social conditions). These help us assess the risk of doing business in a particular country.

These standards are an integral part of our business. Company employees have the authority and the responsibility to take any steps necessary to ensure compliance with all standards and policies. Our employees and our business partners understand that our guidelines are no less important than meeting our quality standards or delivery times.

....

Terms of Engagement

1. Ethical Standards

We will seek to identify and utilize busines partners who aspire as individuals and in the conduct of all their businesses to a set of ethical standards not incompatible with our own.

2. Legal Requirements

We expect our business partners to be law abiding as individuals and to comply with legal requirements relevant to the conduct of all their businesses.

3. Environmental Requirements

We will only do business with partners who share our commitment to the environment and who conduct their business in a way that is consistent with Levi Strauss & Co.'s Environmental Philosophy and Guiding Principles.

4. Community Involvement

We will favor business partners who share our commitment to contribute to improving community conditions.

5. Employment Standards

We will only do business with partners whose workers are in all cases present voluntarily, not put at risk of physical harm, fairly compensated, allowed the right of free association and not exploited in any way. In addition, the following specific guidelines will be followed:

Wages and Benefits: We will only do business with partners who provide wages and benefits that comply with any applicable law and match the prevailing local manufacturing or finishing industry practices.

...

Working Hours: While permitting flexibility in scheduling, we will identify prevailing local work hours and seek business partners who do not exceed them except for appropriately compensated overtime. While we favor partners who utilize less than sixty-hour work weeks, we will not use contractors who, on a regular basis, require in excess of a sixty-hour week. Employees should be allowed at least one day off in seven.

Child Labor: Use of child labor is not permissible.Workers can be no less than 14 years of age and not younger than the compulsory age to be in school. We will not utilize partners who use child labor in any of their facilities. We support the development of legitimate workplace apprenticeship programs for the educational benefit of younger people.

Prison Labor/Forced Labor: We will not utilize prison or forced labor in contracting relationships in the manufacture and finishing of our products. We will not utilize or purchase materials from a business partner utilizing prison or forced labor.

Health & Safety: We will only utilize business partners who provide workers with a safe and healthy work environment. Business partners who provide residential faciltieis for their workers must provide safe and healthy facilities.

Discrimination: While we recognize and respect cultural differences, we believe that workers should be employed on the basis of their ability to do the job, rather than on the basis of personal characteristics or beliefs. We will favor business partners who share this value.

Disciplinary Practices: We will not utilize business partners who use corporal punishment or other forms of mental or physical coercion.

...

Evaluation & Compliance

All new and existing factories involved in the cutting, sewing or finishing of products for Levi Strauss & Co.must comply with our Terms of Engagement.These facilities are continuously evaluated to ensure compliance. We work on-site with our contractors to develop strong alliances dedicated to responsible business practices and continuous improvement.

If Levi Strauss & Co. determines that a business partner is in violation of our Terms of Engagement, the company may withdraw production from that factory or require that a contractor implement a corrective action plan within a specificed time period. If a contractor fails to meet the corrective action plan commitment, Levi Strauss & Co. will terminate the business relationship.

Our Commitment

Levi Strauss & Co. is committed to continuous improvement in the implementation of our Global Sourcing & Operating Guidelines. As these standards are applied throughout the world, we will continue to take into consideration all pertinent information that helps us better address issues of concern, meet new challenges, and improve our guidelines.

Appendix F

"Producing for Levi Strauss in Indonesia"

Information provided by SISBIKUM, Jakarta

LABOUR CONDITIONS AT "YULINDA DUTA FASHION".

Number of workers: 2,000 (98% of them are women)

Production lable: Levi's Strauss

Adress: Raya Landbaw Street, Karang Asem

Barat-Citeurop, Bogor

The working conditions in this factory are not so good. They don't respect all the legal worker's rights. The wage, 5,200 Rupiah per day, is below the legal minimum wage which is 5,750 per day. The workers don't get allowance for food nor for transport. The workers who come regularly and who reach the target get allowance bonus and target bonus of 6,000-15,000 Rupiah per two weeks. There are different kinds of bonusses. Bonus is based on the worker's skill and the result of their work.

If you don't come to work just one day, whether this is justified (with medical certificate), or not, you lose your attendance bonus.

Social security insurance which is 3,600 Rupiah per month, is deducted from the worker's wage.

The workers work from 8:00 AM till 18:00, many times even till 21:00. The workers work 75 hours per week, because they are forced to work on Sundays too on the pretext of meeting the demand of the buyers order. So they work every day without having any time to rest.

It's very difficult for the workers to refuse overtime work because it's compulsory. If you refuse it because you don't feel well or you're ill, or you have a family problem, then you'll be admonished and get a warning letter.

The workers have no right to organize themselves. Whether you like it or not, you must be member of the SPSI. In fact the workers don't take part in the election of the board of the SPSI. But they must pay 500 Rupiah per month for the SPSI, which is deducted automatically from their wages. In reality SPSI is useless.

The rights of women workers such as maternity leave, menstruation leave, breast-feeding leave, are not respected.

They might be willing to give you these leaves, but a long and complicated procedure makes women workers give up. For example, those who want to ask menstruation leave will be examined in the clinic of the factory. This practice makes them reluctant to demand their right.

The factory was founded 8 years ago but none of the workers knows about the existance of the Levi's code of conduct. They have never been told about it.

When the buyer or those who own the Levi's Licence come to the factory, they only visit the area surrounding the workplace, making sure of its cleanliness and pleasantness, and controling the quality of the production. If they want to talk to the workers, the management will select those considered to be loyal to the enterprise. But still, it's not easy to conceal the reality. You have to be really good at lying to them. No wonder that they come to the conclusion that the management implement correctly the Levi's code of conduct. The factory continues receiving orders because the management has improved the wellfare of their workers.

This situation wouldn't happen if the workers knew that the code of conduct exists and they would be able to inform the buyer whenever a violation of the code of conduct occured.

Yulinda Duta fashion has been once disrupted by a strike involving almost all the workers. The strikers demanded the improvement of the working conditions, the end of unlawful collection (200 Rupiah per two weeks) which the management has been doing since 1991, the respect of women worker's rights by removing the long and complicated procedure in getting maternity- and menstruation leaves, the implementation of the legal minimum wage and the respect of the worker's right to organize themselves in a union of their own free choice.

After two days of strike, the management agreed to talk to the worker's representatives. They accepted the worker's demands on paper only. But, as a result of the strike, those suspected to be involved in organizing it were intimidated and finally one by one were sacked. Before and during the negotiation they were also intimidated and interrogated by the security forces.

LABOUR CONDITIONS AT "SANDRAFINE"

Number of workers: 3,000

Production label: Levi's Strauss, Dockers

Adress: Raya pasar Kemis street. KM 1

Desa Kronlong Kecamatan

Jatiuwung, Tangerang

Owner: Korea

The working conditions are bad. They absolutely don't care about their workers welfare. Not all the legal worker's rights are respected. the wage (5,200 Rupiah per day) is below the legal minimum wage which is 5750 Rupiah per day. There is no attendance bonus, nor allowance for food and transport.

The workers receive their wages weekly, and social security insurance which is 500 Rupiah per week is deducted from it. The majority of the workers are women and their right to maternity, menstruation and breast-feeding leaves are not respected. Even if they agree to give those leaves, the procedure is too long and complicated.

The workers work from 7:30 AM till 18:00, very often they have to work overtime till 21:00. Overtime work is compulsory so it's difficult to refuse is. It's very difficult to get the permission not to work overtime even when you're ill. If you really can't come then you have to face intimidation and threat of dismissal.

The management doesn't care about working safety nor the health of the workers. Even though there is a clinic and a physician who works two days per week. To be able to have a treatment in the clinic you have to deal with the long and complicated bureaucracy.

There are 10 toilets for 3,000 workers. You need a card to go to the toilet. If you're discovered to have gone three times to the toilet, you have to be prepared to face deduction of your wage.

You'll get a warning from your immediate supervisor if you fail to come to work even with a medical certificate.

Then you'll be given a poster which says " I'm not going to be absent again" to be hanged around your neck and you'll be told to stand long hours in front of other workers. By doing this the management intend to embarrasse the workers so that she won't commit the same mistake and won't dare to be absend again.

None of the workers knows about the Levi's code of conduct. The management has never informed the workers about it.

What the management stick on the factory's notice board are slogans telling the worlers to follow the motto of the enterprise which is to work diligently in order to produce goods of good quality. Good quality will satisfy the buyers. The management always gives special emphasis to this motto so that a production of good quality can be achieved.

Sandrafine was foundedd 4 years ago and produces trousers, shirts, dresses.

The buyers/those who have the licence come often to visit the factory but not with the purpose of talking to the workers or finding out about the situation/condition of the workers. They only come to control the quality of the production and to converse with the management. When they do talk to the workers, they talk about how to improve the production, not about the working conditions.

In 1994 there was a big strike involving 3,000 workers. The workers demanded the improvement of the working conditions, a rise in wages from 2,600 Rupiah per day to 3,800 Rupiah per day which is the legal minimum wage, transport allowance of Rp. 1,000 per day, food allowance of Rp. 500 per day, the implementation of maternity and menstruation leaves.

Finally the management negotiated the worker's demands with the representatives of the workers. They only agreed to raise the wage. Other demands were rejected under the pretext of financial inability.

The second strike took place in 1996. The demands were almost the same one demanded in the strike of 1994. They were the rise of wages, from RP 4,600 to Rp. 5,200 per day, the improvement of the working conditions and the implementation of maternity and menstruation leaves.

The strike which involved 3,000 women workers lasted two days. The failure of the management to meet the worker's demands on the first day of the strike made the workers realize, on the second day, a long march of 6 Km to the office of the Regional Parliament in Tangerang. The workers asked the Regional Parliament to help them pressure the management to meet the worker's demand. 16 workers were chosen to negotiate their demands with the mangement. The negotiation was also attended by a member of the Regional Parliament, a represetative of the Department of Labour and a representative of SPSI Tangerang. Only one demand, the rise of wage, was accepted by the management. They rejected other demands because they didn't have the financial resources to meet them. The next day the workers came to work as usual but later those suspected to be involved in organizing the strike were dismissed on the pretext that they had committed some mistakes.

So 20 workers who represented the workers in the negotiation were sacked. This was a blattant violation to the agreement which provide guarantee against dismissal.

The lack of a genuine worker organization made it difficult for the workers to organize any action against this injustice.

Appendix G

"Working Conditions of Migrant Chinese Workers

in the Mauritius Garment Industry"

Submitted by a local NGO⁽³³⁾

, April 1, 1998

Contact Period

Normally 2-3 years with possibility of brief extension, generally on the same conditions. In the absence of a standard model, contracts generally differ among the different factories.

Normal Hours of Work on a 5-Day Week Basis

Nine hours per day from 8:00 a.m. to 5:00 p.m. (including lunch break and two tea-breaks)

Overtime Work on Week Days

Up to 8:00 p.m. or 9:00 p.m. or 10:00 p.m. or 11:00 p.m., depending on circumstances. Breaks are granted for dinner and refreshments.

Overtime Work on Saturdays

From 8:00 a.m. to 1:00 p.m. or 2:00 p.m., etc. up to 5:00 p.m.

Overtime Work on Sundays and Public Holidays

From 8:00 a.m. to 12:00 (noon) or 1:00 p.m.

Rates of Pay (For Normal Work)

These vary according to the contract and may be within the range of US$100 to US$170 monthly. Some factories pay daily rates, others pay according to piece rates fixed by the management who do not sometimes hesitate to increase the daily quota to their advantage. Some workers can manage to attain during the normal hours of work the quota fixed, other workers have difficulty to do so and have therefore to work overtime without renumeration in order to reach their quota.

Rates of Pay (For Overtime Work)

These rates are in accordance with the labour laws in Mauritius. All overtime work performed per week is renumerated: a) at 1 1/2 times the daily rate of pay for the first 10 hours overtime; b) at two times the daily rate of pay for the next five hours overtime; c) at three times the daily rate of pay for overtime over and above these 15 hours. All work performed on Sundays and Public Holidays is considered as overtime and is renumerated at two times the daily rate of pay. Chinese migrant workers are generally willing to work overtime in order to earn more income in spite of the sacrifices and fatigue which regular overtime work entail.

End of Year Bonus

Chinese migrant workers normally benefit from the end-of-year bonus which is granted to all workers in December in accordance with Government's decision.

Food and Lodging

Free lodging (with electricity and water supply) is provided. However, the space for sleeping, cooking and laundry is generally inadequate as are bathrooms and toilets. Food for more than 20 workers is purchased and cooked by Chinese cooks. A food allowance of about RS. 1000- is granted to each Chinese migrant worker to meet the cost of such benefit.

Sick Leave

Whenever they feel ill and unable to attend work, Chinese migrant workers must consult the company doctor in order to be recommended for rest and medication.

Casual Leave

The Chinese migrant workers are not eligible for the casual leave grantable to their Mauritian fellow workers.

Annual Leave

Most factories grant five to 10 days annual leave to all their workers (Mauritian and Chinese Migrant) on the occasion of Christmas and New Year.

Trade Union Activities

The Chinese migrant workers are not authorised to form workers' associations nor to participate in the activities of Mauritian workers' associations.⁽³⁴⁾

Religious and Social Activities

The Chinese migrant workers are generally not allowed to participate in religious and social activities organised in Mauritius.

Cultural Activities

The Chinese migrant workers are generally not authorised to attend cultural activities which are organised in Mauritius from time to time. However, on the occasion of the Chinese Spring Festival, which is a public holiday in Mauritius, these workers are allowed, on agreed conditions, to attend cultural events organised to celebrate that festival.

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1.

¹ In 1996 this family of products included: 501(original button-fly jeans), 505 (regular fit), 512 (slim fit), 540 (signature, relaxed fit, flex denim), 550 (relaxed fit, tapered leg), 555 (relaxed fit), 560 (loose fit, tapered leg, Red Dot; and loose fit, straight leg). At that time, the 501 line was available in 108 sizes and 20 finishes and fabrics (Finnie: 18-19).

2.

² Shopkeepers were hoarding vintage pre-1970 Levi's, dubbed "Big E" jeans for the capitalized "E" on the Levi's label, which retailed for several hundred dollars. After 1970, Levi's switched to wider, more automated looms. At that time the logo was changed and the "e" became lower-case (Coupland, 1997: 63, 65).

3.

³ This is how the customized jeans are created: "...a sales clerk takes four basic measurements and enters the information into a computer.The computer suggests a prototype jean for the customer to try on (on average, customers try on two to three pairs before finding the right fit). After selecting the color, the order is sent electronically to a Levi's factory in Tennessee. Within two weeks, the jeans are shipped to the customer" (Coolidge, 1996).

4.

⁴ Analysts suggest that Levi's late entry into this market cost them $200 million in lost sales (Zeldenrust, 1994: 8).

5.

⁵ Seen as a goodwill gesture to improve employee morale, employers are thought to benefit from such programs in terms of higher rates of productivity and lower rates of absenteesim which are said to accompany relaxed dress codes. A 1994 survey for example revealed that 81% of companies felt dress-down days improved morale, and 47% felt they increased productivity (Campbell Survey of Minneapolis, cited in Tredre, 1995b: 6).

6.

⁶ While a strong brand image has been a key factor in Levi's success, a strong brand identity can create its own problems: counterfeiting of Levi's 501 jeans is a major problem. In 1996 "more than 200 infringement cases were pending" some involving major U.S. and overseas jean manufacturers (Finnie: 17).

7.

⁷ In 1997 Levi's launched "its most expensive advertising campaign ever (up from roughly $90 million spent annually on television, radio, magazines, newspapers and billboards) in a belated move to regain dwindling market share," though the company was actively looking to replace their ad agency, Foote Cone & Belding and in early 1998 announced that TBWA Chiat/Day had won their account (though Foote, Cone & Belding continues to handle advertising for the Dockers and Slates brands (Coupland, 1997; Irvine, 1997; LS&Co, 1998a).

8.

⁸ Diesel's U.S. sales were pegged at $23 million, while industry estimates for JNCO's U.S. sales were over $40 million (Perman,1997:2).

9.

⁹ VF has launched a $150 million ad campaign and a new line "Lee Riveted," which already accounts for nearly 40% of Lee's reported $1 billion business (Perman, 1997: 2).

10.

¹⁰ In 1998 22 stores were operated in a joint-venture between subsidiaries of Design, Inc. and Levi's Only Stores (Business Wire, 1998).

11.

¹¹ For example, acquisitions included Koracorp and Koret of North America, Resistol, Oxxford, Rainfair, Fra-For, and Frank Shorter Running Gear. Licensing agreements were also forged with designers Perry Ellis, Andrew Fezza and Alexander Julian (Finnie, 14).

12.

¹² Finnie explains the process, starting out with Levi's 1971 move into the public sphere: The company's name changed to Levi Strauss Associates (LSAI) and new shares were issued to raise funds. "... Strauss's descendants retained a controlling interest. Stock was divided into "Class L" and "Class E." Class L stock was held by certain members and descendants of the Levi Strauss family, and by managerial employees. Class E stock was