Sweeping Labor Rights Progress at Collegiate Supplier to Lululemon in the Philippines

The WRC is pleased to report that we have secured full remediation of labor rights violations at Metro Wear 2, a factory in the Philippines with a workforce of nearly 2,000 that makes university licensed clothing for lululemon.
 
This outcome is the result of an investigation by the WRC that uncovered severe and persistent violations of workers’ associational rights, followed by months of engagement with the factory, worker representatives, and lululemon to secure adequate remedies. The corrective actions by the factory’s parent company, Sports City International (SCI), represent a fundamental reform of the company’s labor relations policies and practices in the Philippines.
 
A WRC investigation found that Metro Wear 2 violated its employees’ associational rights by carrying out a campaign of obstruction and retaliation in response to workers’ decision to join a union to seek better wages and working conditions. This campaign included:

• Violating workers’ freedom of association by threatening workers with retaliatory plant closure, firing, and blacklisting if workers voted for union representation;
• Violating workers’ right to collective bargaining, by refusing, for nearly a year, to honor the results of a democratic union election, overseen by the Philippine Government, in which workers voted overwhelmingly to join the new union;
• Firing five employees who were elected officers of the new union in retaliation for the decision of the factory’s workers to exercise their associational rights by unionizing; and
• Discriminatorily targeting the factory’s workforce for layoff, on account of employees’ decision to exercise their associational rights by voting for the union.

After documenting these violations, the WRC engaged with the factory owner and lululemon seeking proper remedies. While the process was slow, it ultimately resulted in commitments from SCI that fully address the violations of university labor standards identified by the WRC. These include the reinstatement with back pay of the unlawfully fired union leaders; a commitment to bring laid off workers back to work in a timely fashion and not to discriminate in any future layoffs based on union membership; and a commitment to accept the results of the democratic union election, respect the union’s legal right to represent workers, and bargain in good faith, as required by national law. SCI also agreed to reinstate another illegally fired worker, employed at a sister factory, whose dismissal was linked to SCI’s broader campaign to prevent workers from exercising their associational rights.

In late June 2025, SCI held a series of meetings with the factory workers’ union at which the company memorialized these commitments, apologized for violating workers’ rights, agreed to fast track the long-delayed collective bargaining process, and negotiated the terms of the layoffs with the union. Implementation of the remedies is well underway. The five union leaders returned to their original positions with full back pay on June 24, 2025.

A collective bargaining agreement was reached between the factory and the union, which is a strong indicator of SCI’s intention to honor its commitment to respect associational rights. The specific terms of the contract are not directly relevant to the question of university codes compliance—university standards require good faith bargaining; they do not dictate the outcome. It is however notable the CBA includes yearly salary increases, which are modest but significant to the workers; the establishment of a grievance mechanism to discuss labor disputes; a provision for workers to be represented by the union at disciplinary hearings; and a commitment from management to work with the union to revise a demerit system that, in its current form, has lent itself to misuse, among other gains for workers.

Finally, despite a delay in the return of laid off workers relative to original target dates, the employees of 10 out of 28 of the factory’s production lines have now returned to work, 4 lines are returning this month, and the remaining workforce will return in December of this year.
 
The WRC is monitoring the situation to ensure ongoing compliance with Filipino law and university codes of conduct.
 
As always, please let us know if you have any questions.