Ethics Case Controversy
Forever 21 is an American brand that was founded in April 1984 in Highland Park, Los Angeles California. Forever 21 is known for their cheap and trendy clothes. However they have been faced with multiple scandals throughout the years exposing how they can afford to sell their clothes for such a low price. Forever 21 is now facing the consequences of “cheap fashion”. They company has been planning on filing for bankruptcy. The longer this goes on more and more people are becoming aware of the unethical practices Forever 21 uses. It is now affecting the business of Forever 21 as a whole, people are refusing to support the unethical wages and treatment of the companies employees and are taking their money elsewhere.
Forever 21 has been involved in many lawsuits regarding stealing designs, replicating another companies product, discrimination and unlawful labor and wage conditions. These lawsuits date back from 2001-present. Forever 21 has stolen designs from many high end brands as well as well known public figures. They have copied the well known Gucci cross body bag and replaced the Gucci label with 2 circles to replicate the look. Even though they are not copying the logo it is still Gucci’s design and therefore should only be sold by Gucci and not replicated by another brand.
In Los Angeles, a Forever 21 employee Norma Ulloa has expressed her concern on her wage and hours. She stated she works 11 hours a day while making six dollars an hour, which is far below California’s minum wage. She is one of three hundred workers speaking out about her treatment. The company claims they inspect the manufacturing factories but if they did the employees would not be speaking out on their mistreatment. Ulloa included multiple companies in her claim for backwages, but decided not to go after Forever 21 for back wages as it would prolong the settlement. Since she did this the company noted that in her case there was “likely no valid claim”. The investigation uncovered a makeshift factory were there was barbed-wire fences so workers could not escape the factory. In result the anti-sweatshop law was passed. This law allows employees to claim back-wages from their direct employees and from manufacturers who contracted with those factories. There was also another incident in which Alba Gomez Guevara filed a wage claim against Forever 21. She claimed she made less than nine dollars an hour working in a south Los Angeles factory gluing on rhinestones onto Forever 21 shirts and packaging the finished products into Forever 21 packaging. She stated the delivery guy that picked up the clothes was an employee of Forever 21 and she knew the location of the company’s facility in which the items were dropped off. Forever 21 responded by saying they never employed or even met Guevara and that she did not provide enough information. In 2015 the Labor Commissioner's Office stated that there was not enough evidence to hold Forever 21 liable. Big companies are getting away without punishment because they take the position in that they are not involved in the production and manufacturing of the clothes , so therefore are not liable for claims against them even if a worker has stitched their label onto a garment. This is just another way for companies to get away with the unethical things they are doing.
Forever 21 also has been caught up in a scandal were they have been purchasing cotton from the Uzbekistan Cotton Company, who uses child labor. The Uzbekistan Cotton Company is one of the biggest cotton companies in the world. They rely mostly on the work of children to harvest the cotton. The workers are given a daily quota of how much cotton they need to harvest and if they do not reach the quota they are punished. The workers are forced to live in makeshift dormitories and are given insufficient food and water. This causes them to be malnourished, frail and in danger, especially the children. In 2011 the RSN issued a cotton pledge to encourage brands to sign and agree to stop using cotton from Uzbekistan. Over 50 brands have vowed to never use Uzbekistan cotton some brands include Abercrombie & Fitch, American Eagle, and Levi’s. However Forever 21 has stayed silent, the company claims they only purchase supplies from fair companies. This is untrue, Forever 21 uses cotton from Uzbekistan because of how cheap in cost it is. Since the apparel Forever 21 sells is so inexpensive, they use cheap materials in order to keep the prices low. There has been boycotts and petitions against the retailer. People across the world see how unethical and wrong child labor is, so they are choosing to boycott companies that are involved including Forever 21.
Stakeholders
The main stakeholder in this situation is Forever 21. They have the most to lose because there company is the one in the spotlight with all of these scandals. Along with Forever 21 the other stakeholders involved are the factories who produces Forever 21 products, the employees of the factories, the employees of Forever 21 and also the consumers who purchase products from Forever 21.
Individualism
The goal of the Individualist theory is to maximize profit for the stakeholders (Forever 21) and to act in the best interest of them. Forever 21 continued to purchase supplies from the Uzbekistan Cotton Company because it was cheap. By purchasing supplies from Uzbekistan it allowed Forever 21 to continue to sell their products at a low affordable price while also increasing their profit. If the company bought supplies that cost more they would not make the same profit and be able to sell the products at a low price. The margin between the cost of making the product and the price they are selling it at would be closer if they did not use Uzbekistan. The act of using supplies from Uzbekistan is unethical but Forever 21 continued to purchase supplies from them because it was in the best interest of the company price wise.
Utilitarianism
The Utilitarianism Theory states that an action is right (ethical) if it results in the happiness of the greatest number of people in a society or a group. Utilitarians believe that in order to be moral we should follow certain well-established rules or guidelines that can be relied on to produce the best results, for instance the Utility Principle. Act utilitarians believe that whenever we are deciding what to do, we should perform the action that will create the greatest net utility. In their view, the principle of utility do whatever will produce the best overall results should be applied on a case by case basis. In this case Forever 21 did not do what was going to result in the happiness of the greatest number of people. The factory workers were not happy working long shifts and receiving wages less than minimum wage. The owners of the factories were not happy employees were filing claims against them for their unethical practices. The children and workers in Uzbekistan were not happy spending long work days picking cotton and receiving unfair living treatment. The companies and individuals who accused Forever 21 of copying designs and products of theirs were also not happy when they saw Forever 21 profiting off their idea. The consumers were not happy when they found out where Forever 21 was getting their cotton supply from. Lastly Forever 21 was not happy with all of the negative backlash they were receiving from the scandals. Overall no one in this situation is happy in the end, therefore the actions of Forever 21 are indeed unethical to a Utilitarian.
Kantianism
The Kantianism Theory states that rational decisions must be ethical. According to Kantianism to have moral worth, actions must be done strictly from duty. “Don’t lie, cheat, manipulate or harm others to get your way. Rather, use informed and rational consent from all parties.”(Salazar, 2014). Forever 21 has harmed others to get their way/succeed. The conditions in the factories where the products of the company were produced was very harmful to the workers. They sometimes worked longer than twelve hour days getting less than $4 an hour six out of seven days a week. They lived in tiny makeshift dormitories and were given insufficient food. Forever 21 did not care about harming the workers because they were profiting from their work. The brand also used manipulation to get itself out of many scandals. Forever 21 has stolen designs and ideas from countless brands. Kantians would not approve of stealing someones idea and using it at your own, this is seen as cheating and lying. Overall according to Kantianism the practices of Forever 21 are deemed unethical.
Virtue Theory
The Virtue Theory consist of four main virtues. The four virtues need to be obtained in order for a business to be ethical. The four virtues are courage, honesty, temperance, and justice. Courage is the first virtue, it represents the willingness to do the right thing. Forever 21 did not display this characteristic. When the conditions of the Uzbekistan Cotton Company came out to the public many companies vowed to never purchase supplies from them again. However instead of joining in and vowing to stop using the cotton and supplies from Uzbekistan that was deemed unethical, Forever 21 stayed silent and continued to use supplies from Uzbekistan knowing the way they treat the workers. The second virtue is honesty. Forever 21 was not honest when scandals came up that they knew they had a part in them. Instead of being honest and doing the right thing, they claimed they were not responsible for what they were accused of in the claims and scandals. Forever 21 also was not honest when it came to the employees and customers. They public was not aware of how the employees were being treated in the factory and the conditions of the factories. The third virtue is temperance. This means the business had to have realistic expectations and desires. Forever 21 had expectations and desires, they wanted to sell low priced items while maximizing profit. However the way they went about doing this was not ethical. They were using unethical companies to purchase supplies off of because of how cheap in price it was. The cheaper the supplies cost the cheaper they can produce the product for, hence making a larger profit when they sell the product. The fourth virtue is justice. Justice is hard work, quality products, good ideas, and fair practices. The workers in the factories were not given fair wages. The wages were far below the minimum wage , this made it almost impossible for people to support themselves and their families. Also the conditions of the factories were not fair, there was barbed-wire fences so the workers could not escape. Stealing the designs and ideas from other customers and celebrities also was not fair. Those companies and celebrities spent time and money on their idea/product, Forever 21 had no right to copy their designs. Overall based on the Virtue Theory the practices of Forever 21 are seen as unethical.
Justified Ethics Evaluation
In my opinion I believe that the actions of Forever 21 were unethical and unprofessional. Forever 21 is known for their inexpensive clothing, but the reality of it is they can only afford to do that because of the harsh working conditions and low wages they give their employees. Their employees are paid less than minimum wage and forced to work 12 plus hour days. Another factor is also where they get their supplies from. Forever 21 saves a large amount of money by purchasing supplies from unethical companies. The Uzbekistan Cotton Company is one of the companies Forever 21 purchases supplies from, the company uses child labor which causes the supplies they offer to be very cheap. After finding out about the use of children and the conditions they work in, many brands vowed to stop purchasing supplies to stop supporting the use of child labor and harsh conditions. However Forever 21 stayed silent and continued to purchase supplies from Uzbekistan because it was cheap. This was very unethical of them and caused customers to boycott their store. Forever 21 acted in self interest rather than ethically.
Action Plan
Forever 21 needs to improve the conditions of the factories that their products are being produced in. The way they are being run is very unethical and unfair to the employees.
Forever 21 has been called out for their participation in paying their workers below the minimum wage while also creating despicable working conditions for their employees. Forever 21 needs to stop exploiting their workers and follow the state mandated minimum wage. One way Forever 21 could approach this issue is by hiring employees to do all the work involved with the production of the retail items instead of having different factories do cutting, sewing, stitching, and bagging. This has been proved successful in the company Los Angeles Apparel, founded by Dov Charney. In the article in the LA Times “Behind a $13 shirt, a $6-an-hour worker” it explains Charney successful method, “[he is] paying workers an average of around $15 an hour to sew clothes in a sprawling warehouse in South L.A. The only way he can afford it, he says, is to cut out all the middlemen and put everyone from the sewers to the designers to the retail executives under one roof. “You want to make it yourself. That’s what my pitch is for; it’s for vertical integration,” Charney says. “It’s actually the path of least resistance, and you can make clothing less expensively than it’s made offshore”.
They also need to start purchasing supplies from companies that are ethical. Forever 21 is continuously giving their dollar to suppliers who use child labor. As previously noted, purchasing supplies from Uzbekistan supports child labor and harsh working conditions. Even though these tactics save Forever 21 a large amount of money, a company should not be operating unethically in this day in age. Forever 21 needs to make extreme adjustments and changes to the way they operate and manage their company. Finding another company to purchase supplies from will cost more money, however it will be ethical. With a dramatically fast changing world of consumerism, it is easy to find all the clothing you need for cheap thanks to companies like Forever 21, but unfortunately many tend to turn a blind eye to the harsh and unethical origins of the clothes on their skin. If more regulations and pressure is put on companies to produce their clothing ethically this issues can be resolves. For example the loop hole of Forever 21 identifying themself as a retail rather than a manufacturer needs to be addressed. Forever 21 needs to start using suppliers that enforce ethical labor practices, tt is time the well-being of a human life is put before the search of low cost production.
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