Captive U.S. Factory Executive Released
Agence France-Presse/Getty ImagesPolice patrol past the factory where Chip Starnes was held hostage for six days over a wage dispute at his Specialty Medical Supplies business on Wednesday.Agence France-Presse/Getty ImagesMr. Starnes (R) sits surrounded by government officials and trade union leaders during a briefing in the factory on Wednesday.
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A U.S. executive held captive in his factory was freed on Thursday after a six-day standoff with employees.
The co-owner of Florida-based Specialty Medical Supplies, who had been [url=http://online.wsj.com/article/SB10001424127887323998604578565491218131384.html]held hostage by workers since Friday in the executive quarters of his factory on the outskirts of Beijing, reached a settlement with employees who had been demanding severance pay, a spokeswoman for the labor union and a general manager of the factory said at a press briefing on the compound Thursday. They declined to disclose details of the settlement.
Chip Starnes, the factory co-owner, was not present at the press briefing. The labor union spokeswoman said that he had left to rest in a hotel. He appeared to have slipped away quietly as journalists were assembled in a meeting room. The spokeswoman declined to offer further details of his departure. “I’m sure he’s tired,” the spokeswoman said, adding, “We all are.”
In an 8:30 a.m. phone interview prior to his departure, Mr. Starnes said he had reached an agreement with the workers. “Money has been wired and I expect to be out having cocktails by this evening,” Mr. Starnes said.
He has not responded to phone calls or responded to requests for comment since leaving the factory.
The 42 year-old executive declined in the phone interview to disclose details of the settlement. He said he was in talks with legal counsel, representatives of the local labor union and government officials until 5:30 in the morning on Thursday, adding that he ended up giving money to employees who had already received severance payments.
Mr. Starnes said he will continue to manufacture alcohol pads at the decade-old medical supply factory. Over the past year, he has been preparing to move the factory’s diabetes testing equipment manufacturing to India, he said.
Employees at the factory confronted Mr. Starnes last week, believing he was preparing to close the factory without providing employee settlement.
Mr. Starnes said that over the past year he had laid off more than 100 workers, but all were given severance.
Employees at the factory declined to discuss the settlement.
Xiaoqing Pi for The Wall Street JournalChu Lixiang, spokeswoman for the Huairou district branch of China’s government-run labor union, displays what she says is one worker’s severance agreement with Mr. Starnes’s company. The agreement shows the worker received a month’s wages plus additional considerations for a total of 5459 yuan ($887).
Work disputes are on the rise in China amid concerns about slowing economic growth, though causes of disputes depend on individual circumstances.
The labor group China Labour Bulletin said earlier this month it recorded 201 cases of labor disputes, including strikes, in China in the first four months of the year. That was almost the number of cases in the same period last year.
While bosses aren’t held captive in their companies every day in China, Starnes is not the first one. In January this year, around 1,000 workers at Shanghai Shinmei Electric Company held Japanese and Chinese managers hostage in the factory, claiming that work rules for bathroom breaks and punishments for tardiness were too harsh.
Beyond China, employees in other countries often go to drastic measures to negotiate with their bosses. In 2009, French employees of Caterpillar Inc. and at French plants of Sony Corp. and 3M Co. held executives and managers hostage as strong negotiation tactics.
Legal experts say employees in China often feel that they will be better off if they take matters into their own hands rather than go through the courts.
“The perception of workers and petitioners in general is that they do not have effective legal remedies to protect their interests, and find that taking action into their own hands gets near-immediate results,” James Zimmerman, the managing partner in the Beijing office of Sheppard Mullin Richter & Hampton, LLP and former chairman of the American Chamber of Commerce China, wrote in an email.
Mr. Starnes said that he will outline pay and severance rules more clearly in future employee contracts. He will be hiring more employees for the factory next week, he said.
“I’m going to specify every single detail in contracts,” he said. “This was just absolutely bizarre.”
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