WRC Case Brief: Hoosier Manufacturing (Guatemala)

To:WRC Affiliate Universities and Colleges
From:Tara Mathur and Ben Hensler
Date:May 27, 2022
Re:WRC Case Brief: Hoosier Manufacturing (Guatemala)

Please see here a case brief on remediation of violations of university codes of conduct and Guatemalan law at Hoosier Manufacturing, which supplies collegiate apparel to Fanatics and Nike. The WRC investigated complaints of retaliatory dismissal of 25 workers in April 2021, as well as dismissal of three workers in October 2021 in violation of a legal protective order.
The WRC determined that Hoosier Manufacturing failed to respect freedom of association and Guatemalan law in the terminations of these workers. The WRC recommended, as did the FLA, that the factory should offer rehiring to all 28 fired workers—21 of whom accepted and returned to the factory.
In the case of the 25 workers fired in April 2021, the WRC determined that back pay was not required. This is because, as both the WRC and the FLA concluded, while these workers claimed they were trying to unionize before they were fired, this was not actually the case. Instead, these workers merely pretended to try to unionize, in order to prompt management to terminate them in retaliation—which it did. The workers wanted to be terminated, because, under Guatemalan law, involuntary termination (unlike voluntary resignation) triggers the right to severance, which was these employees’ actual objective.
Given this, the 25 employees were not owed back pay since they had stopped earning wages by their own design. Nonetheless, their dismissal communicated to the rest of the workforce that the company would terminate other workers who might legitimately seek to unionize. Therefore, the mass firing violated the requirement under university codes that suppliers respect the freedom of association of all employees. With respect to the three workers unlawfully terminated in October 2021 (where there was no issue of fabricated union activity), the WRC recommended that the company provide reinstatement and six months’ back pay—which Hoosier Manufacturing has paid.
The company also agreed to additional corrective actions, including making an announcement committing to respect freedom of association going forward and retaining an ombudsperson to help resolve any labor-management disputes between the company and its workforce, which, in the intervening period, did form an authentic union. These remedial measures—along with rehiring the 21 fired workers and backpay for three of these workers—represented appropriate corrective action consistent with university codes of conduct.
The WRC will continue to monitor compliance with freedom of association and other university code of conduct standards at Hoosier Manufacturing. As always, we welcome your questions or comments.