Frigid weather didn’t stop employees of the Soho retail clothing store Yellow Rat Bastard from celebrating the $1.4 million in back wages they just won in a settlement by rallying outside the shop and marching up Broadway last week.

Months of organizing by the Retail Action Project (RAP) finally paid off with an announcement by Attorney General Andrew Cuomo last Monday that Henry Ishay – who owns Yellow Rat Bastard along with other trendy clothing stores in Manhattan, Queens and Brooklyn – would compensate for paying employees below the state minimum wage, failing to provide overtime, and illegally reducing hours and firing those who cooperated with the attorney general’s investigation. In addition to the wage settlement, RAP – which brought workers together and offered training and support – also helped workers acquire layoff protection in three of Ishay’s stores and focus attention on what many workers have described as unhealthy, unsafe working conditions.

With this victory achieved for more than a thousand current and former workers, some wonder what’s ahead for this group and others like it. Like most of New York City’s retail workers, employees at YRB and Ishay’s other stores are not unionized, and therefore not protected by a collective bargaining agreement. RAP is not a union, but rather a grassroots advocacy organization fighting alongside workers to protect their rights.

“With retail jobs, the pay is so low that workers often quit and go on to the next store rather than try to take on all these problems,” said RAP organizer Carrie Gleason. “Our goal is to make it easier for these workers to deal with problems, because they may encounter them all over again at the next store they go to.”

“I think this shows how incredibly hard it is for many workers to unionize, but how great the need is,” Gleason said. She points to other worker advocacy groups like Make the Road by Walking and Despierta Bushwick as models for how to make improvements for non-unionized, immigrant workers who are particularly vulnerable to exploitation. Such groups “give workers the back-up they need on the job regardless of their collective bargaining status. At the same time, workers build networks and get experience in how to deal with problems collectively. It’s a stepping stone to unionizing.”

The Retail, Wholesale and Department Store Union, in fact, helped create RAP, along with the neighborhood advocacy group Good Old Lower East Side. Profiles on MySpace and Facebook – which were actually suggested by some of the workers, a youthful group overall – gave the effort a boost too, she noted.

Labor relations experts agree that this is a promising model, but question whether it’s replicable.

“These workers’ success shows that you can protect workers a number of ways,” said Ken Margolies, an organizing expert at the NYC extension of Cornell University’s School of Industrial and Labor Relations. “The question is whether this can be effective with companies bigger than local retailers, and with non-retailers. Would it work against Starbucks? I don’t know if enough pressure could be generated. Starbucks has a lot more resources to resist and do a counter-information campaign.”

Margolies thinks that collective bargaining is an essential, irreplaceable tool. “There’s only so many times you can do the pressure tactic before you wear people out or the other side learns how to beat it. The advantage of collective bargaining is that you get legal recognition, which means the employer has to bargain with you and you reduce your agreements to a legal and binding contract,” he said. “So when the worker advocacy group stops watching, the employer can’t change his or her mind and and revert back.”
For many of the workers, the experience has been eye-opening. “When I first got involved with the Retail Action Project, I thought it was just Yellow Rat Bastard violating workers’ rights. But when I got a second job at another store in SoHo, I found out they were paying less than minimum wage too,” said Guatemalan native Loren Orellana, 24, an employee at the Ishay store Boys and Chicks.

“Working for YRB, I earned just $5.50 per hour … and worked as many as 60 hours a week without overtime pay,” said Edwin Dyer, 25, who worked at Boys and Chicks for two years. “YRB thought they could get away with cheating us out of money. They thought we would never exercise our rights because so many of us are young and are immigrants,” said Dyer, who is from Trinidad.

The lawsuit covered employees of the stores between Dec. 2000 and Dec. 2006, during which time the state minimum wage rose from $5.15 to $6 per hour on Jan. 1, 2005, and then to $6.75 on Jan. 1, 2006. (On Jan. 1 2007, it rose again to $7.15.)

Scott Fenstermaker, Ishay’s lawyer, described his client as happy with the settlement amount. “They were asking for significantly more money, and we were able to describe to them why a more reasonable settlement was in order. Much of what they were saying was untrue. A lot of them were basically taking advantage of the company in ways that brought their credibility into question,” Fenstermaker said. He was not clear on what role RAP played in the settlement.

RAP is currently helping guide workers through the AG’s claims process. Employees working at any of Ishay’s stores in the last six years will complete a notarized form, which the AG’s office will use to allocate the $1.4 million settlement.

– Matt Schwarzfeld