Sweatshop Allegations
During the 1980s, the company's image was damaged when allegations of sweatshop labor use surfaced. Guess was quickly marked as a major offender. In 1992, Guess contractors faced litigation from the US Department of Labor (DOL) due to failure to pay their employees the minimum wage or adequate overtime. Rather than face a court case, $573,000 in back wages was paid to employees.
Soon afterward, Guess promised to monitor their contractors for illegal activity, and the company earned a place on the US DOL's 'Trendsetters List', but this position was suspended several years later in 1996 after independent inspectors found violations of regulations at seven of the company's contractors. In the same year the company was sued by the Union of Needletrades, Industrial and Textile Employees (UNITE), again due to the failure to pay the minimum wage or overtime to workers. The settlement, supervised by the US Department of Labor, saw the reinstatement of 8 workers found to have been illegally fired and another $80,000 in back pay given to workers, but almost immediately afterward Guess announced that it was moving its sewing production to Mexico. The company denied that the move was related to these court cases, but its public image continued to suffer.
Throughout the nineties, UNITE continued a public relations campaign against Guess, focusing on the experiences of former employees. Billboards subsequently appeared in Las Vegas, Los Angeles, and New York featuring a photograph of Rage Against the Machine with the caption "Rage Against Sweatshops: We Don't Wear Guess – A Message from Rage Against The Machine and UNITE. Injustice. Don't buy it." Eventually, Guess countered with a defamation suit against Unite and several of its officials, while in 1997 the company ran full-page ads in many major American newspapers claiming that its contractors were "guaranteed 100% free of sweatshop labour". The wording of these ads was changed after federal authorities complained that the claims had not been made by anyone in the government and had no official status. Guess especially began expanding in the less competitive and increasingly lucrative European and Japanese markets. In 2005 Guess pulled a line of t-shirts from the market after Erika Becker-Medina, a DC area resident and government employee, spearheaded a campaign calling for the boycott of the company. "Ski Colombia: Always Plenty of Fresh Powder" was designed on the t-shirts released by the company in the second quarter of 2005, apparently in reference to Colombia's drug-trafficking problem. Guess distributed letters of apology.
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