Yeongwon Outdoor and Two Other Fashion Companies Fined 120 Million KRW for Subcontracting Law Violations

Fair Trade Commission Imposes Total of 120 Million KRW in Enforcement Orders and Fines

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Three fashion companies, including Youngone Outdoor, which operates The North Face, were fined a total of 120 million KRW for violating the Subcontracting Act.

On the 14th, the Fair Trade Commission announced that it decided to impose corrective orders and fines of 40 million KRW each on three footwear and apparel companies?Seohung, Youngone Outdoor, and Lotte GFR, a subsidiary of Lotte Shopping?for "violations of the obligation to issue subcontracting contract documents."

From 2018 to 2021, these companies commissioned 105 subcontractors to manufacture fabrics and accessories, but issued documents that omitted legally required details such as subcontracting payments or lacked signatures or seals from both parties involved in the transaction.

This constitutes a violation of the Subcontracting Act’s obligation to issue written documents, which is intended to prevent disputes arising from unclear contract terms and to provide subcontractors with an opportunity to assert their intentions.

The Fair Trade Commission stated, "We will continue to strengthen monitoring of the failure to issue documents, which worsens the position of subcontractors in subcontracting transactions and triggers disputes related to subcontracting."

This content was produced with the assistance of AI translation services.