Update: Outerstuff Commits to Full Remediation at Style Avenue

To:WRC Affiliate Universities and Colleges
From:Scott Nova, Tara Mathur, Ben Hensler
Date:March 12, 2024
Re:Update: Outerstuff Commits to Full Remediation at Style Avenue

I am very pleased to report a positive resolution in the case of Style Avenue, the Salvadoran factory that closed last year owing workers back wages and legally mandated terminal compensation. Outerstuff, the licensee that sourced university logo apparel from Style Avenue, has committed to provide $1.8 million to the factory’s workers, representing 100% of the funds they are legally owed. The payments will be distributed to workers in accordance with a schedule outlined below.
Outerstuff’s commitments, once fully implemented, will make the Style Avenue workers whole for all the money the factory owes them and will address all labor rights violations identified by the WRC. Outerstuff’s commitments bring the company into compliance with university labor standards, and we want to give due credit to Outerstuff for stepping up to pay the factory’s workers in full.
This positive outcome will be of enormous benefit to the workers and their families. The average Style Avenue worker will receive the equivalent of more than one and a half years of wages. Some workers will receive close to three years’ wages. Most of this is legally mandated severance, and the sizable amounts primarily reflect the long tenures that many of the workers had at the factory before it closed.
These funds will have a profound impact on the quality of life of the workers and their families, not just now but for many years to come. The result will be better nutrition and healthcare, more access to education and better life prospects for workers’ children, greater stability in housing, and, for many workers, relief from crushing debt. Workers were extraordinarily relieved and heartened to learn of Outerstuff’s commitments.
This outcome upholds the labor standards of universities and reflects the enormous power of these standards to protect the rights and well-being of workers who sew collegiate apparel.
Severance theft has been a chronic problem in the apparel industry for decades, with devastating consequences for workers across the globe. Years ago, workers in such cases had no hope of ever seeing the money they earned. Universities and the WRC have led the way in changing that reality. At factories making university logo goods, workers who are not paid severance when their factory closes now have good reason to expect that they will be made whole, because full remediation of such violations has become the norm in the collegiate apparel industry. Universities and the WRC have asked licensees to ensure workers are paid all legally owed compensation, even if licensees must use their own resources to achieve this outcome, and licensees are meeting that expectation, as Outerstuff has agreed to do at Style Avenue.
I want to congratulate the many universities that engaged with Outerstuff. This engagement ensured that the company developed a clear picture of university expectations and how they apply in a case where an employer has failed to pay its workers legally mandated compensation. The beneficiaries of this effort are the workers in El Salvador, who sewed university logo apparel for many years and will now receive the fruits of their labor.

While it took a substantial period of time to achieve remediation in this case, what is most important is that workers will now be paid in full. It is the obligation of licensees to remedy any violation of university standards by their suppliers, but that does not mean it is always easy for licensees to do so. This is a case where it wasn’t easy: the cost Outerstuff is shouldering is substantial. As we have reported before, prior to the Style Avenue case, Outerstuff had a positive track record of contributions to labor rights compliance; by fully resolving this case, Outerstuff continues on that positive track.
The WRC and Outerstuff have signed a Memorandum of Understanding that sets forth a schedule of payments:
Outerstuff will pay two-thirds of the funds—$1.2 million—by the first week of April. With careful preparation to ensure a secure and properly documented payment process, we will distribute funds to workers shortly thereafter. Outerstuff has agreed to provide an additional $15,000 to cover the cost of distribution, as this cannot be done through factory payroll (since the factory is closed) and will instead be handled by an experienced non-profit organization in El Salvador, under the WRC’s coordination and oversight.
The payment to workers of the final $600,000 will take place nine months later, on January 2, 2025, with interest. Outerstuff will pay an interest rate of seven percent per annum, covering the period between April 1 and January 2. With the bulk of the funds being paid right away, thus meeting workers’ immediate needs, and with interest to be paid on the remainder, the WRC considers this schedule appropriate, given the size of the overall burden on Outerstuff relative to its financial capacity. Worker representatives have also approved this approach.
We will keep you updated as the payment process unfolds. We anticipate a smooth process, and we are looking forward to having money in workers’ hands by early next month.
Please let me know if you have any thoughts or questions about this update. The WRC is not going to schedule a video conference at this juncture; however, I will make myself available to discuss any aspect of this positive resolution with affiliates, one-on-one, if helpful. Thank you again for your attention to this important case.