New Report: L&Y Embroidery (Bangladesh)

To:WRC Affiliate Universities and Colleges
From:Laura Gutierrez and Ben Hensler
Date:May 28, 2020
Re:New Report: L&Y Embroidery (Bangladesh)

Please see a new factory report concerning the resolution of labor rights violations at L&Y Embroidery, which embellished university logo caps, on a subcontract basis, for university licensee, Zephyr Headwear (Zephyr).

As discussed in the report, the WRC’s investigation found that, between September 2018 and January 2019, in the course of downsizing its workforce, L&Y violated Bangladeshi labor law and university codes of conduct by terminating at least seven employees without providing them legally required notice and severance benefits.

As a result of the WRC’s investigation, in December 2019, the seven workers were paid their legally mandated severance benefits and notice pay. These payments were made in the amount of US$817.38 per employee, which is equal to an average of nine months’ salary for each of the seven workers who were owed this compensation.

As detailed in the report, this was the third instance that Zephyr’s supplier, Han Apparel, subcontracted Zephyr’s collegiate apparel production to another factory, without disclosing the subcontractor in question to the licensee and, thereby, causing Zephyr to fail to disclose the subcontracted factory to universities. In light of Han’s repeated violation of its obligations to Zephyr under university codes, the WRC recommended and Zephyr agreed to impose economic penalties on Han Apparel. In February 2020, Zephyr took such action against Han, and the WRC is optimistic that this will prevent further such noncompliance by this supplier.