Flying Needle (Nicaragua)

To:WRC Affiliate Universities and Colleges
From:Scott Nova and Jessica Champagne
Date:November 26, 2012
Re:Flying Needle (Nicaragua)

Please find here a memorandum regarding recent events at the Flying Needle factory, located in Tipitapa, Nicaragua. Adidas discloses Flying Needle as a producer of collegiate licensed apparel. In addition, worker testimony indicates that the plant produces apparel for Under Armour and Rawlings. While the WRC investigation at Flying Needle is still ongoing, we are aware that concerns about this factory have been raised on some campuses and therefore want to inform you of what we have found to date and update you about recent developments at the facility and the prospects for sustainable remediation.

The WRC investigation determined that, in May and June, Flying Needle terminated all of the executive committee members of a newly formed union. This constituted a clear violation of Nicaraguan law and collegiate codes of conduct, which was compounded by the factory’s failure to comply with a Nicaraguan Ministry of Labor directive stating that these illegal firings were null and void and that the workers must be reinstated. Before and after these terminations, workers report that the General Manager and other managers repeatedly stated that they would not accept a union in the factory and that they would terminate any union leaders. The factory went on to terminate five workers who had participated in a union assembly, including at least one newly elected leader, in October and November. The WRC is still investigating these firings. 

Through November 2, neither the factory nor the licensees took any action to remedy these violations. On that date, the union issued a public denunciation and sent communications to labor rights groups around the world. After this public denunciation, adidas and Under Armour contacted factory management and pressed for reinstatement. On November 13, factory management signed an agreement committing to reinstate eight of the terminated workers and pay them the back wages to which they were legally entitled. Unfortunately, this agreement lacks key elements which are essential to remedy the damage to workers’ associational rights due to the illegal dismissals. While the reinstatement of eight workers is a positive development, it does not adequately undo the harm done by the company’s violations to date. More details, including recommendations for appropriate remediation, are contained in the memorandum.

The fact that the agreement does not include measures designed to undo the impact of the terminations on workers’ associational rights, or sufficient measures to reduce the likelihood of future abuses by a management whose hostility to workers’ exercise of their rights is manifest, raises serious concerns about the prospects that remediation at this facility will be sustained. The fact that not all of the illegally terminated workers were reinstated and provided with back pay is also cause for concern. The union reports that the remaining workers could not be reinstated because, over the months after the firings and before any corrective action, these workers had drifted out of contact with the workers remaining at the plant. This inability to implement full compliance with the law speaks to the urgency in such cases of a prompt response by management and licensees. Had Flying Needle responded promptly to the Ministry’s orders, or been compelled to do so by licensees, all of the workers would likely have returned to the facility. Thus, through delay, and through the inaction of the licensees, Flying Needle management succeeded in permanently eliminating more than a third of the union’s original leadership.

Adidas, which bears direct responsibility for this factory under university codes, as well as Under Armour, took no action until they were publicly pressured to do so. These firings took place not long after similar illegal terminations at Troon (formerly known as Augusta), another plant in the same free trade zone that is also an adidas supplier. At Troon, a similarly inadequate reinstatement agreement has been ineffective in counteracting the chilling effect of the retaliatory firings; adidas has not yet responded to a request dated exactly one month ago requesting further information regarding the continuing violations and adidas’ plans to address these violations.

The WRC has serious concerns that Flying Needle union leaders will return to a hostile work environment where they will be unable to freely exercise their associational rights, unless the brands make a real commitment to ensure a genuine change in behavior on behalf of the management which will allow workers to exercise their associational rights without fear of further retribution. Given that the General Manager of the plant has directly stated that he will not allow workers to unionize, it is highly unlikely that the factory will come into full compliance without significant involvement by the buyers.

To date, adidas and Under Armour have failed to prevent or to promptly remedy these violations; the WRC will be contacting them to inquire as to their plans to ensure that the violations are fully remediated and to clarify what collegiate products were produced in the plant. The WRC is following developments at the plant closely. We will update universities as to whether licensees and the factory are taking necessary actions to protect workers’ rights. As always, please contact us with any questions or thoughts regarding this memorandum.

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