Successful Back Pay Distribution at Rio Garment (Honduras)

To:WRC Affiliate Universities and Colleges
From:Scott Nova and Jessica Champagne
Date:August 4, 2017
Re:Successful Back Pay Distribution at Rio Garment (Honduras)

We are writing to share an update regarding the successful implementation of the remediation plan at Rio Garment, a collegiate supplier factory in Honduras. The factory closed in August 2016, failing to pay its workers $1.3 million in legally owed compensation, in violation of university codes of conduct.

In April 2017, the WRC facilitated the distribution of nearly $1 million to the factory’s former employees. The WRC secured these funds from the university licensee sourcing collegiate apparel from the facility, Tailgate Clothing Company, and two other factory buyers, Gap, Inc. and Gildan Activewear. In combination with funds generated by the sale of goods and equipment, these buyers’ contributions fully resolved the violations that occurred at the time of the closure. The WRC partnered with a Guatemalan organization, the Commission for the Verification of Codes of Conduct (COVERCO), to distribute the funds to all production workers who were owed money at the time of closure.

During an initial distribution from April 27-30 and over the subsequent months, 99% of the workers, 530 individuals, have collected their checks. The WRC has now located the remaining three workers, and is making arrangements to provide these final payments.

The successful resolution of this case is a credit to the university licensee Tailgate and to the other buyers who made significant financial contributions, Gap and Gildan. It is also a credit to university codes of conduct. Wage theft, and particularly the failure to provide legally required severance, continues to be common in the garment industry. University codes of conduct are one of the few avenues by which workers have repeatedly succeeded in achieving restitution for these violations.

This memo provides an overview of the case and the distribution of funds to workers. In addition, a short video detailing the successful remediation of the case is available online.

Scott Nova 
Executive Director
Worker Rights Consortium
[email protected]