The Northern Mariana Islands Sweatshop Scandal That Exposed Levi's Offshore Supply Chain

Sweatshops & Labor Exploitation5/5 wildness

The Northern Mariana Islands Sweatshop Scandal That Exposed Levi's Offshore Supply Chain

Levi Strauss & Co.; Tan Holdings Corporation / 1990s

In 1991, Levi Strauss & Co. became embroiled in a labor scandal involving jeans manufactured in the Northern Mariana Islands, a U.S. commonwealth whose products could carry a Made in the USA label despite relying on imported labor. Investigators found that Chinese garment workers employed by Levi's subcontractor, Tan Holdings Corporation, were working under conditions the U.S. Department of Labor described as slave-like. The allegations included sub-minimum wages, seven-day workweeks, shifts lasting as long as 12 hours, abusive employment practices, and poor living conditions. The affected production reportedly represented roughly 3 percent of Levi's annual jeans sales at the time. Tan Holdings ultimately paid more than $9 million in restitution to approximately 1,200 workers, described in the source as among the largest labor penalties in U.S. history. Levi Strauss denied knowledge of the abuses, cut its relationship with the Tan family, and introduced more extensive inspection and labor-compliance procedures. The episode became an early warning that prestigious American labels could use offshore contracting structures to distance themselves from harsh factory conditions while preserving a patriotic domestic label.