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Gap Settles with San Francisco Employment Lawyer Daniel Feder

Jenny Strasburg, Chronicle Staff Writer
Published 4:00 am, Friday, January 28, 2005

San Francisco’s Gap Inc. will give thousands of California store workers nearly $1.8 million worth of clothing vouchers as compensation for apparel they bought to satisfy workplace dress codes, according to a proposed settlement that would end a 2-year-old lawsuit.

The proposed payout to an estimated 55,000 current and former Gap and Banana Republic employees could be distributed starting this summer in the form of gift cards worth $40 to $260 apiece, redeemable for merchandise, according to an agreement reviewed Thursday in San Francisco Superior Court. The terms have yet to be approved by Superior Court Judge James Warren.

The settlement caps months of confidential mediation sessions between Gap and plaintiffs’ attorneys whose February 2003 lawsuit accused Gap of violating state workers’ rights laws.

A settlement would be the second time a major retailer has agreed to compensate employees for what critics said were required clothing purchases. In June 2003, Abercrombie & Fitch agreed to pay $2.2 million in a settlement with California labor regulators over the company’s dress-code policies.

Similar actions are pending against other national retailers including Polo Ralph Lauren. Abercrombie, Gap and Polo all have denied that their dress- code rules broke any laws.

At issue are California labor laws that require employers to pay for their workers’ uniforms. State law defines uniforms as required clothing of a specific design or brand.

The proposed Gap settlement represents the latest legal fight in California over what has long been considered standard practice by stores nationwide. Retailers commonly give workers discounts to buy clothes in their stores, thus keeping their brands prominently on display.

But critics have charged that, discounts notwithstanding, hourly workers are illegally forced to dedicate a portion of their wages to buy specific clothes as a condition of keeping their jobs.

Retailers have defended the practice, saying that clothing discounts attract workers who want to work where they already shop.

With the proposed Gap settlement, California has put another dent in a long-accepted practice, said Marshal Cohen, president and chief analyst at the NPD Group, a New York fashion consulting firm.

“This is a major change. Retailers are being sent a clear message. This is setting a precedent that will take hold in more states than just California, ” Cohen said Thursday.

Gap Inc. said that it never forced employees to buy its clothes but instead told employees to look “brand appropriate” and avoid wearing obvious labels belonging to competitors.

“We feel strongly that our dress code policies are consistent with state law,” Gap told The Chronicle in an e-mail statement Thursday. “However, the settlement agreement underscores our commitment to ensuring that our employment policies are clearly understood and consistently followed.”

Gap spokeswoman Kris Marubio said that the company could not say yet how much the settlement will cost the company. Plaintiffs’ attorneys, led by Patrick Kitchin of San Francisco, have asked for $400,000 in fees, in addition to the clothing vouchers.

The settlement covers employees who worked in the stores between Feb. 4, 1999, and Dec. 31, 2003. Plaintiffs’ attorneys have set up a Web site,, to answer questions about settlement eligibility. A court- appointed administrator will notify eligible employees by mail.

Under the proposed settlement, Robert Boleyn, a former Gap employee in Los Angeles, would receive $10,000 in cash for his role as lead plaintiff.