'Sweatshop' claim sparks lawsuit

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'Sweatshop' claim sparks lawsuit
By Jonathan Birchall in New York
Published: April 12 2004 21:08 | Last Updated: April 12 2004 21:08


Tim Smith, a director of ethical investment firm Walden Asset Management, is being sued by Cintas, the largest US provider of uniform clothing, over remarks he made introducing a shareholder resolution in October.

The complaint, filed before federal court in Cincinnati in January, says Mr Smith defamed Cintas when he claimed the company was sourcing from a factory in Haiti "which is a poster child for sweatshops", in violation of its code of conduct.

Mr Smith is one of the best known figures in the US SRI community. "He is one of the gurus of the movement," says Mila Rosenthal, head of Amnesty International USA's business programme.
Before joining Walden, Mr Smith worked for 24 years at the Interfaith Center for Corporate Responsibility, where he pioneered the use of shareholder resolutions to raise social and environmental concerns.

The majority of some 180 SRI resolutions still pending this season have been prepared through the ICCR, whose membership has a combined portfolio of about $110bn.

The complaint against Walden and Mr Smith says his comments were based upon research conducted in Haiti by Unite, the main US garment-makers' union. Unite is involved in a bitter struggle to win union recognition at Cintas' plants in the US.

Cintas is not suing Unite over the research, which is published on the union's website.

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