Clothing firm settles staff uniform dispute

One of the most prominent clothing retailers in the United States, Abercrombie & Fitch, has agreed to stop forcing employees to wear company outfits on the job at their own expense. The decision comes after a legal settlement that could have a profound effect on big-name high street shops everywhere.

The settlement followed a suit brought on behalf of 11,000 Abercrombie & Fitch employees in California, who will now share a $2.2m payment from the company. California labour regulators have previously stated that forcing employees to pay for company-brand clothing - a practice known as "wardrobing" - was illegal under state law, since employers are required to cover the costs of any uniform.

Several other companies, including Polo Ralph Lauren and Gap, face similar lawsuits in California and are now likely to settle, legal experts say. And although the legal restriction applies only to California, it is likely to change industry practices further afield, both in the US and overseas.

The California Division of Labour Standards Enforcement found that Abercrombie & Fitch workers' pay fell below the minimum wage in some cases once the cost of mandatory company clothing was deducted from their pay packets. It also concluded that the employees were being used as unpaid "living models" for the company's wares.