Back Pay Secured for 1,300 Workers at Collegiate Factory Supplying Cutter & Buck

To:WRC Affiliate Universities and Colleges
From:Rola Abimourched and Ben Hensler
Date:March 31, 2022
Re:Back Pay Secured for 1,300 Workers at Collegiate Factory Supplying Cutter & Buck

As discussed in this new case brief, the WRC has secured a commitment from university licensee Cutter & Buck to pay the equivalent of more than four months’ wages to over 1,300 workers, to remedy violations of law and university standards by a supplier factory in Ethiopia, KGG Garments, Plc (“KGG”), that produced collegiate apparel.

These are the key elements:

  • KGG, which was located in Ethiopia’s Hawassa Industrial Park and employed 1,346 workers, ceased operations last year without paying employees more than US$135,000 in legally required severance and other legally mandated terminal benefits.
  • Garment workers in Ethiopia, which does not have a legal minimum wage, are some of the lowest paid in the world, with workers at KGG paid regular wages of only eleven cents (US$0.11) per hour—the severance workers were unlawfully denied represented four months’ wages per employee. 
  • The WRC’s investigation found that factory management tried to evade its legal severance obligations by coercing workers to “resign” before the factory closed and using these falsified “resignations” to justify nonpayment of severance to workers.
  • The WRC communicated our findings concerning the factory’s theft of workers’ severance to Cutter & Buck and asked the university licensee to press the factory’s owners to pay workers their legally mandated severance.
  • When the factory’s owners failed to commit to remedy the violation, the WRC requested that Cutter & Buck provide the former KGG workers with sufficient funds to remedy the legal violation and make the workers whole, as university standards require.
  • To its credit, Cutter & Buck quickly agreed to provide workers the US$135,000 in severance that the factory’s owner failed to pay; the WRC and Cutter & Buck are now working together to organize distribution of the funds to the workers in Ethiopia.

This case illustrates, once again, the crucial role university standards and independent factory monitoring play in ensuring workers making collegiate apparel are protected. It is hard to imagine that, without them, the KGG workers, some of the lowest paid garment workers in the world, would be receiving the severance they legally earned and have desperately needed since the factory closed.

We will update you when the payments to workers have been completed. Please let us know if you have any questions.