Fashion Nova Company’s Labor Exploitation

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Table of Contents

Introduction
Case Study Content
The UN Global Compact Principles
Recommendations
Conclusion
Reference List

Introduction

Over the past years, business segment all over the world has begun to pay much attention to the issue of ethics within a workplace. Unlike the times of industrialization, various units have now won a decent range of rights and security for the employees. Lately, these aspects are known under the notion of ethics. While many people think of it as a set of moral obligations, researchers claim it to be norms and behavioral patterns that exist in a certain social group, helping individual rationalize their decision-making (Baumane-Vitolina, Cals, and Sumilo, 2016). One of the most complicated industries in terms of ethical tolerance is now the fashion segment known for its frequent business ethics violation. The purpose of this paper is to introduce and analyze the case study depicting the act of ethical breach in the fashion industry. In the course of the analysis, a print media article will be discussed in terms of the UN Global Compact Principles and then given some recommendations on how to practice more efficiently in the future.

Case Study Content

The fashion industry can be considered as one of the most demanding segments due to the fact it is to constantly adjust to the latest trends if not set them itself. For this purpose, the labor market of the industry cannot be flawless because of significant pressure put on the management. One of the most recent precedents proving the point happened in 2019 in Los Angeles, California, US. According to The New York Times article, the brand Fashion Nova, being practically the most popular online retailer in the state, had been severely violating the wages rate defined by the federal Labor Department (Kitroeff, 2019). The investigations claim employees work for three dollars per hour on average, placing them in conditions incompatible with ethical workplace patterns.

When it comes to garment production, many manufacturers tend to outsource their production to the workers in developing countries like Vietnam and Bangladesh due to cost efficiency. The average income rate in these states is considerably lower and allows employers to pay lower wages, respectively. However, in Fashion Nova’s case, the vast majority of manufacturing was centered in the United States. Although most workers were immigrants from Southern America and Asia, they still were entitled to decent financial support.

Richard Saghian, the brand’s founder, claimed that the company’s headquarters was unaware of the labor conditions, as they did not directly hire employees, leaving it to the vendors. However, even if to take into consideration that the fast fashion segment is quite hard to follow, it does not undermine the scope of responsibility one obtains when launching a company. In this case, Fashion Nova has even more ethical responsibility, as various celebrities do advertisements for the brand, putting at stake their credibility and reputation.

The most crucial aspect of ethical responsibility, however, concerns labor relations within the overall context of the US market. The country itself is now experiencing a dissonance between the image of the diversity-embracing state with millions of people coming there to fulfill the notorious American dream, and the cruel reality of labor exploitation and discrimination. While small business is now more focused on establishing an ethical workplace pattern, large corporations are still driven by greed rather than a moral code to secure their workers. For this reason, the United Nations have developed a model of ethical workplace each employer is to follow to abide by the law.

The UN Global Compact Principles

Unlike in the past decades, the working-class representatives now have a wider range of opportunities to improve their working conditions. Once sweatshops were abandoned by the world leaders, society was feeling a strong need to establish a framework beneficial for both employees and businesses in the long-term perspective. Thus, the Ten Global Compact Principles were developed in 2000 by the UN (‘The power of principles,’ n.d.). These principles are divided into four major categories that deal with human rights, labor, environment, and anti-corruption.

Speaking of this compact in terms of the case study introduced, the company managed to breach half of the principles by limiting practically every labor right for its employees across the globe. However, the major violation concerns the policy of the elimination of discrimination in respect of employment and occupation. Every individual is, by all means, entitled to receive decent pay for the amount of work he or she executes. However, the major issue with this system is the fact that contractors hire employees who are quite unlikely to declare their resentment in public. The reason behind this fear is the fact that many of them live in the country illegally and do not have the documents required to find an official and safe workplace. Hence, the first issue that should be resolved concerns the necessity to provide immigrants with an opportunity to acquire legal recognition.

Furthermore, the main company’s argument regarding the situation deals with the fact that the management was allegedly unaware of the work conditions provided for people. While Mr. Saghian believed it could keep him away from the matter, such a statement only emphasized the unethical treatment towards the factories’ staff, as he was even unwilling to know how the working process was organized within the unit. What is more, the company’s management was aware of the finance rate they were allocated for the wages on the vendor factories. Hence, it was clear that people were significantly unrepaid when compared to the average hourly wages in the US. The fact that most of the workers were immigrants also contributed to the fact of discrimination trends are still popular with fellow US residents.

Recommendations

Among all the advice that can be provided for the Fashion Nova management, the two major recommendations could be outlined. First of all, in terms of the 21st century, a company’s administration unwilling to reach out to the staff is regarded as offensive and unethical. A cheap fast-fashion brand has to obtain an impressive amount of workforce to remain relevant. However, even when outsourced or assigned to the contractors, the labor should be controlled on the top management level. Hence, the brand should assign supervisors to each factory dealing with Fashion Nova garments to make sure the employees have decent working conditions to make clothes with their quality closely correlated with the price.

Another important recommendation would be to reconsider the company’s policy as a whole. Fashion Nova’s surprisingly low prices make the brand extremely relevant in the market. On the other hand, however, the demand for the garment is not calculated in terms of the staff and salary scopes. Having a relatively good reputation, the brand has now an opportunity to make the prices higher to secure appropriate minimum wages for each worker.

Conclusion

In the course of this paper, the case study of Fashion Nova‘s labor exploitation was analyzed in terms of the ethical business framework. It was then estimated that the major principle violated by the company concerned the discrimination of the workers in terms of employment and occupation. Thus, to enhance its practice in the future, the company should allocate more human resources to control the workflow. Moreover, they are to reconsider their brand policy by defining whether they can keep the garment prices at the current level.

Reference List

Baumane-Vitolina, I., Cals, I. and Sumilo, E. (2016) ‘Is ethics rational? Teleological, deontological and virtue ethics theories reconciled in the context of traditional economic decision making’. Procedia Economics and Finance, 39, pp.108-114.
Kitroeff, N. (2019) Fashion Nova’s secret: underpaid workers in Los Angeles factories. Web.
The power of principles. (n.d.) Web.

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Fashion Nova Company’s Labor Exploitation

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