WRC Factory Report on Pure Cotton (Los Angeles, CA)

To:WRC Affiliate Universities and Colleges
From:Scott Nova and Ben Hensler
Date:October 17, 2019
Re:WRC Factory Report on Pure Cotton (Los Angeles, CA)

Please find here a new report concerning the WRC’s findings regarding violations of university codes of conduct by Pure Cotton, a company located in Los Angeles, California, that supplied collegiate apparel to the licensee, Hype & Vice, LLC (Hype & Vice), and the remedial commitments Hype & Vice has made to resolve these violations. While most collegiate apparel is produced outside the US, university licensees do disclose a significant number of suppliers in southern California, which is the largest center of garment manufacturing in the country, employing more than 45,000 workers.

In September 2018, California state inspectors cited Pure Cotton, and a small subcontract factory operating at the same address, Union Supply, for violations of state minimum wage standards. When contacted by the WRC about these violations, Hype & Vice reported that Pure Cotton had denied that it had subcontracted production of the former’s collegiate apparel to Union Supply.

The WRC, however, reached out to state inspectors, who provided convincing evidence—photographs of collegiate apparel found at Union Supply and records from Pure Cotton of its subcontracting—that proved that these garments had, indeed, been produced by Union Supply. The WRC also learned from state labor inspectors, though, that there was no realistic prospect that Union Supply would pay the penalties it had been assessed, so that workers could receive funds they were owed.

Accordingly, the WRC recommended to Hype & Vice that it correct the violation of university codes of conduct that had occurred by making payment itself to Union Supply’s workers. Hype & Vice, however, which is a small licensee with extremely limited resources, shared financial documents with the WRC which demonstrated that full payment was beyond the company’s capacity. The WRC and Hype & Vice agreed, therefore, on a corrective action plan, where the licensee will pay workers half the penalties over a 24-month period.

The WRC believes that, given the circumstances, these commitments fulfill Hype & Vice’s obligations under university codes of conduct to take corrective action to address the violations committed by this subcontractor of its supplier, Pure Cotton. Hype & Vice, which had already ended its business relationship with Pure Cotton, has begun sourcing from a different LA manufacturer and adopted greater due diligence in overseeing its production.

As this case illustrates, wage-and-hour violations are pervasive in the garment manufacturing sector in southern California. Recent enforcement actions by government regulators have found more than 80% of factories they inspected to be violating wage-and-hour laws, with some workers paid as little as one-third of the applicable legal minimum wage.

Moreover, despite dedicated, though severely under-resourced, efforts by state and federal regulators, preventing and remedying labor rights violations in LA’s garment factories remain highly challenging. Workers, many of them undocumented, are highly vulnerable to employer intimidation, and factory owners can often avoid accountability, as their small factories are easy to move and reopen under new identities. Factory owners, forced by many buyers to compete with manufacturers in countries where wages are a fraction of LA’s legal minimum wage (in 2018, $12.00 per hour), almost unavoidably will violate the law to maintain profitability. This situation underscores the need for university licensees sourcing apparel from suppliers in southern California to conduct enhanced due diligence to ensure factories’ compliance with the law and ensure that their purchasing practices support this.

As always, please contact us if you have any questions or concerns.