Starnes, who co-owns Florida-based Specialty Medical Supplies, was on lock-down in his factory in Beijing's northeastern district of Huairou over a pay dispute with employees. His Chinese workers blocked the factory's doors and gates, refusing to release Starnes until he paid them severance packages. On Thursday Starnes and a labor representative said an agreement had been reached.
In an interview with CNBC earlier this week, Starnes said he had tried to walk out of the factory but was thwarted by employees.
"They locked arms and walked in front of me to keep me from leaving," he said behind the bars of a window of his 10-year-old factory. The employees think "if I leave, I won't come back, the factory will shut down and they won't get severance packages."
The factory workers believed Starnes was shuttering the factory and moving his manufacturing operations to India, a charge Starnes vehemently denies.
"I've got a lot of balls over here -- a 100,000 square feet facility and machinery," Starnes told CNBC. "I'm stuck here."
According to The Wall Street Journal, "The first few nights of his entrapment...employees treated [Starnes] like a prisoner of war, depriving him of sleep by making jarring noises and shining bright lights in his eyes. There are no guns, however, and Mr. Starnes said that he hasn't been physically harmed in any way."
Starnes told AP that he had lost 9 pounds in the past six days and was "saddened" by this experience.
Yahoo! Finance's Lauren Lyster and Michael Santoli discuss the challenges and risks facing American businesses operating in China in the attached video.
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