Crisis re Russell Factory in Honduras 

To:Primary Contacts, WRC Affiliate Colleges and Universities
From:Scott Nova
Date:October 10, 2008
Re:Crisis re Russell Factory in Honduras 

The university community faces an issue of serious and urgent concern: the decision of Russell Athletic to close its Jerzees de Honduras factory. There is substantial credible evidence that this action was motivated, at least in part, by hostility toward workers’ continuing efforts to exercise associational rights protected by university codes of conduct. A factory closure decision that is motivated by such animus is a serious violation of university codes of conduct.

The Jerzees de Honduras factory, which Russell owns and operates, is one of two Russell factories in Honduras disclosed as producers of university logo apparel where violations were identified by the WRC in September of 2007.  The violations the WRC identified included mass firings of workers in retaliation for their efforts to unionize. Russell initially denied the violations and refused to communicate with the WRC; however, due to significant pressure from universities, the company ultimately agreed to end the violations and carry out a remediation plan at both facilities, including the reinstatement of fired workers.

One of the two factories, Jerzees Choloma, was closed earlier this year and the workers were afforded the opportunity, pursuant to an agreement between Russell and the WRC, to transfer to the other facility, Jerzees de Honduras.  Overall, substantial progress was achieved toward the remediation of the abuses uncovered last year; however, this progress was accompanied by ongoing incidents of anti-union harassment and coercion by Russell’s factory management, which the WRC repeatedly brought to the attention of senior Russell executives. Now Russell has announced the planned closure of Jerzees de Honduras and the termination of all of the workers.

The company announced this decision in the middle of negotiations by the workers and their union for an initial collective bargaining agreement at the plant. As part of the remediation plan to which Russell agreed, the company pledged to negotiate with the union.  The union that has been attempting to negotiate a contract with Russell is the same union that Russell sought to eliminate from the factory last year through illegal mass firings of its founding members.  Likewise, the workers now facing termination through the announced plant closure include many of the previously fired workers who were later reinstated and are still working at the company.

Based on our review of the entire course of events leading up to the closure announcement, we have concluded that the company’s ongoing hostility toward workers’ exercise of their associational rights was a factor in Russell’s decision to shut down the factory. We will present the evidence underlying our conclusion in a report we are now preparing; however, because of the urgency of the situation, we wanted to let our affiliates know of this crisis immediately. The following is a concise summary of recent developments concerning this plant:

  • We have received credible evidence that for several months, managerial personnel at the factory have been telling workers that their decision to exercise associational rights would result in the closure of the facility. These statements are a continuation of a pattern of hostility to freedom of association that dates back to the illegal mass firings that gave rise to the WRC’s initial investigation last fall. 

  • A factory supervisor has recently circulated an anti-union petition within the factory, as documented by a Ministry of Labor investigation. 

  • The representative of the union federation to which the workers have affiliated has been repeatedly subjected to harassment by security forces of the industrial zone where the factory is located, reportedly at the behest of plant managers, while she was seeking to visit the factory in order to carry out legitimate representational functions. She also has been subjected to hostile treatment by managers inside the plant, who on multiple occasions questioned her right to act as the workers’ representative in communications with management. 

  • Russell has repeatedly complained to the WRC about activities of the union and its members that represent nothing more than a union’s exercise of its natural representational and organizational functions. The company stated in a written communication to the WRC that these activities were undermining the “viability” of the plant.  Neither workers’ lawful exercise of their associational rights, nor a union’s carrying out its legal role as their representative and organizing body is a legitimate reason to close a factory.

In light of all this evidence, including outright threats of retaliatory closure, as well as the documented history of unlawful actions by Russell to suppress the associational rights of these workers, we must conclude that the company’s hostile animus towards its workers’ exercise of these rights played a role in the decision to close Jerzees de Honduras. This is a serious violation of university codes. The appropriate remedy is a reversal of the closure decision.

Russell has stated to the WRC that the closure of this plant and the termination of these workers are not the result of such animus. This claim is belied by the evidence summarized above and by Russell’s past behavior: a documented history of repeatedly terminating these same workers in response to their exercise of the very same right.

Russell has further claimed that there are unrelated economic reasons for reducing production of fleece products in Honduras and that it makes economic sense to close Jerzees de Honduras as opposed to other facilities.  Past experience demonstrates that it is impossible for an external monitoring organization to assess the validity of such claims.  Absent unfettered access to Russell’s books and corporate records, and to internal communication among company decision-makers, the WRC cannot determine whether the company’s claim has any validity or is merely a pretext. As we cannot verify this claim, and because its source is a corporation with a documented history of violating these very same workers’ rights and then issuing denials that we subsequently have found to be false, there is no legitimate basis for us to accept it as evidence of compliance.

It is also important to recognize that when animus towards the exercise of freedom of association is a factor in the decision to close a factory, this is a violation of workers’ associational rights even if unrelated economic factors were also involved in the decision. It is a violation to base a closure decision either in whole or in part on such animus. Thus, the substantial credible evidence that such animus was a motivating factor in Russell’s decision to close Jerzees de Honduras constitutes proof of a violation of university codes, regardless of whether Russell also took unrelated economic factors into account.

If Russell proceeds with its plan to close this high-profile factory, it will do irreparable harm to the factory’s employees. We believe it also will have a severe chilling effect on the ability of workers throughout Russell’s supply chain, and the university apparel supply chain in general, to exercise their associational rights. As news of the closure spreads, the lesson workers can be expected to draw is that codes of conduct are meaningless and that if employees try to exercise the rights protected by these codes, the result will be the loss of jobs and livelihood.

The closure, if carried out, will demonstrate to workers that there is no point in filing complaints about violations of their rights, because even if labor rights monitors can compel a company to end the violations, the company can simply wait a few months and then shut down the factory. A factory that workers and worker organizations in Honduras have viewed as a harbinger of progress in respect for basic labor rights in that country will instead be seen as convincing proof that codes of conduct and monitoring programs offer only false promises to workers. Future university code enforcement efforts in Honduras, and throughout the region, will be significantly undermined.

We recommend that universities that have significant relationships with Russell Athletic communicate with the company about this situation and urge the company to fulfill its obligations under university codes of conduct.

Scott Nova
Worker Rights Consortium
5 Thomas Circle NW
Washington DC 20005
ph 202 387 4884
fax 202 387 3292
[email protected]