WRC Response to Russell Memo Concerning Factory Closure Announcement 

To:Primary Contacts, WRC Affiliate Colleges and Universities
From:Scott Nova
Date:October 21, 2008
Re:WRC Response to Russell Memo Concerning Factory Closure Announcement 

On October 16, Rick Medlin, an Executive Vice-President at Russell Athletic, sent a memorandum to a number of universities denying that the corporation’s hostility toward workers’ exercise of their associational rights played any role in its decision to close the Jerzees de Honduras factory in Honduras and accusing the WRC, which has concluded otherwise, of being unfair to Russell and seeking to “manipulate the college/university community.”

The company’s current denials are an unfortunate echo of its response one year ago, when the WRC first reported serious and systematic violations of associational rights involving the firings of dozens of members of the very same workforce. In that instance, Russell initially responded by denying the violations and denouncing the WRC as biased and uninformed – just as Mr. Medlin has done here. The company’s denials proved to be patently false and the WRC’s finding that workers were fired for seeking to unionize was, in fact, subsequently corroborated by an inquiry conducted at Russell’s own behest.

In the present case, as we outlined in our communication to universities on October 10, the WRC has gathered substantial credible evidence that hostility toward workers’ exercise of freedom of association continues to play a significant role in the company’s decision-making regarding its operations in Honduras – a serious violation of university codes of conduct. There is nothing in Mr. Medlin’s memorandum that causes us to doubt this conclusion. Because Mr. Medlin tenders a variety of claims in his memo, however, we address these in turn below:

1) Mr. Medlin suggests that the WRC rushed to communicate with universities concerning Russell’s closure decision before we had gathered sufficient information to justify this action. As Mr. Medlin is well aware, this is not the case. The WRC has been gathering information concerning events at Jerzees de Honduras on an ongoing basis for more than a year. Our work has intensified in recent months as Russell’s actions to deny freedom of association at the facility have steadily worsened. We have found extensive evidence of ongoing anti-union animus at Jerzees de Honduras, including explicit statements by management personnel to workers that their decision to exercise their freedom of association would lead to the factory’s closure.

We have, for months, been concerned that such animus would lead Russell to close Jerzees de Honduras and we have expressed this concern to Russell at the highest corporate levels on multiple occasions. We have refrained until now from reporting publicly on this problem because of assurances we received from Russell that there were no plans to close the facility. Russell’s ongoing hostility to workers’ exercise of freedom of association at this factory, and the relationship between that animus and the potential closure of the facility, are issues that the WRC has investigated extensively. They are also issues concerning which the WRC has repeatedly sought both explanation and corrective action from Russell. Thus, the WRC had, and has, a firm basis for communicating our concerns to our university affiliates regarding this crisis.

Mr. Medlin also states in his memo that, during a phone conference on October 8, he and his colleagues proposed a meeting with the WRC to discuss these issues and that the WRC was unwilling to meet. In fact, Russell did not propose a meeting during this call and has not done so since. Nonetheless, as explained above, the WRC has had extensive communication with Russell about events at the factory – including multiple discussions by phone with Russell’s General Counsel, as well as the phone conference on October 8, during which Mr. Medlin and his colleagues presented their official justification for the closure decision.

2) Mr. Medlin complains that the WRC is disregarding information that purportedly supports the company’s claim that there is some economic basis for closing the Jerzees de Honduras plant, as opposed to other factories in the firm’s supply chain. As we noted in our communication of October 10, it is a practical impossibility for a labor rights monitoring organization to determine conclusively whether economic factors a company cites to justify a decision to close a particular factory are valid. Absent full and unfettered access to a company’s internal records and communications – something Mr. Medlin has made clear that the company has no intention of providing – there is simply no way to prove or disprove the veracity of such a claim, particularly when it involves one factory in a supply chain where disclosed production of collegiate licensed apparel alone involves more than fifty different plants.

What the WRC, as a labor rights monitoring organization, can do, however, is determine whether there is substantial credible evidence that anti-union animus was a motivating factor. If such animus is a significant factor in a closure decision, this is a violation of workers’ associational rights, whether or not economic factors were also considered. The WRC has gathered substantial credible evidence that anti-union animus was a factor in the closure decision. Therefore, we conclude that Russell is in violation of university codes – whether or not economic considerations were also involved. It is not necessary to prove the absence of any economic motivation for the closure in order to prove the presence of an anti-union motive. That is why our investigative focus is on whether there is substantial credible evidence demonstrating that such animus was a significant motivating factor, and not on claims concerning the economics of Russell’s operations that no monitoring organization can conclusively evaluate, especially when the only evidence proffered in support of them is documentation selectively released by the company itself.

3) Russell objects to our characterization of the situation at Jerzees de Honduras as a “crisis.” Russell has announced the closure of a factory where efforts to remediate particularly severe violations of labor rights are still ongoing. This closure, if it proceeds, will result in the termination of more than 1,500 workers. It will also result in the elimination of one of the only factories in the university logo supply chain in the developing world where, thanks to universities’ enforcement of their codes of conduct, genuine progress has been made toward respect for workers’ associational rights. We fail to see how this situation can be viewed as anything less than a crisis – both for these workers and the entire enterprise of labor rights monitoring in the collegiate licensing sector.

4) Ignoring its own history of misleading statements regarding its labor practices at its Honduran plants, Russell expresses anger and surprise that the WRC would react to its claim about the reasons for the closure with “immediate skepticism.” In light of both the company’s track record, and the evidence of recent and ongoing anti-union animus that the WRC has gathered, such skepticism is entirely warranted. It is astonishing that Russell would expect otherwise, unless the company believes that labor rights monitors should be pre-disposed to accept company claims at face value, even when the company in question has made false claims in the past on the very same subject concerning the very same workers.

5) Mr. Medlin implies that the WRC is applying a double standard in our approach to the closure of Jerzees de Honduras, relative to our approach to the earlier closure of Jerzees Choloma. He suggests that the WRC sought to assess the veracity of Russell’s assertions of economic justification in the case of Jerzees Choloma, but is failing to do the same here in the Jerzees de Honduras case. The claim is spurious in its entirety. In the Jerzees Choloma case, as in the Jerzees de Honduras case, the WRC looked at one question only: whether there was substantial credible evidence that animus toward the exercise of basic labor rights was a motive for the plant’s closure. In neither case did we undertake the impossible task of verifying or disproving the company’s economic claims. In the case of Jerzees Choloma, although there was ample proof of hostility by management toward workers’ exercise of their associational rights, evidence existed that this anti-union animus did not play a role at the time the original closure decision was made: this evidence was a document which showed that the original closure decision was made prior to the existence of the union organizing effort at the factory. In the Jerzees de Honduras case, no such evidence has been offered – indeed, it is indisputable that the closure decision was made well after workers’ decision to unionize and well after Russell’s unsuccessful effort to destroy the union. In both cases, the WRC applied the same methods and standards, but reached different conclusions because of different evidence.

6) Mr. Medlin also seeks to question the evidence of ongoing hostility at the facility toward employees’ exercise of freedom of association, as summarized in our October 10 communication:

A) Russell denies that a petition circulated at the factory for the purpose of displacing the union was an “anti-union petition”: A supervisor in the “exportación” department circulated the petition in question. The Honduran Ministry of Labor documented the circulation of the petition and admonished the individual responsible. Russell employs insubstantial distinctions to try to evade responsibility for this serious breach of workers’ associational rights. The express goal of the petition was the replacement of the workers’ legitimate and lawfully organized representative with an unlawful and unrepresentative body. Russell admits that this occurred – the company can hardly deny it, in view of the Labor Ministry report – but makes the bizarre claim that this does not make it an “anti-union petition.” Russell claims the person responsible was not a supervisor but a “clerk.” Workers from the plant have informed us that this person acts in a supervisory capacity.

B) Russell tries to minimize the significance of its repeated complaints to the WRC about the workers’ union: Russell admits that the company “did express some concerns” about the activities of the union, but claims that it only did so in response to WRC communications concerning complaints by the union about anti-union actions at the factory. It is irrelevant whether or not Russell’s statements about the workers’ union were issued in response to WRC communications about the company’s previous acts of hostility toward its workers’ associational rights. These complaints would constitute evidence of animus toward the exercise of associational rights, regardless of the content of other communications between Russell and the WRC. In any case, Russell’s claim is false. The company twice sent messages to the WRC complaining about the union’s activities that were not in response to any expression of concern by the WRC about anti-union actions in the plant.

C) Russell denies that management personnel threatened that the factory would close: Threats that Russell would close the factory because of the presence of the union were issued on multiple occasions over the last several months by managerial personnel. The WRC repeatedly asked Russell to put an end to this behavior at the factory. Russell promised to look into the problem and take appropriate action, but the activity persisted. Russell now denies that such threats occurred, a denial directly contradicted by credible worker testimony, and states that “no member of plant management ever made threatening remarks regarding the union.” This is a truly astounding claim. Last year, Russell fired at least 25 workers at this facility in retaliation for their decision to unionize (as well as a larger number of workers at Jerzees Choloma) – firings that took place amidst multiple threats by management personnel of just such retaliatory action. Russell has effectively admitted that these firings were inappropriate. Even if Russell seeks to deny the threats that were issued recently, it is amazing that the company is now attempting to erase from history the violations of last year that it previously admitted and pledged to remediate. Presumably, Russell seeks to dismiss this history because to acknowledge it would beg the question of why the company’s present denials should be viewed as credible, when its past denials concerning comparable violations proved to be false.

D) Russell denies that there was inappropriate treatment of the representative of the union federation when she sought to visit the factory on union business and claims that the only communication the company issued to zone security personnel instructed them to treat her respectfully: The industrial zone security personnel who have harassed the representative of union federation, Ms. Evangelina Argueta, told her explicitly that they were acting under directions from Jerzees de Honduras management. The head of security for Jerzees de Honduras confirmed this when these instructions were questioned, in Ms. Argueta’s presence, by the head of security for the zone. Factory management has also repeatedly, and as recently as August, refused Ms. Argueta access to the factory when she has come to the plant to address formal worker grievances, which is legitimate union business. (It bears noting in this regard that factory management has also, on repeated occasions, refused to grant access to government labor inspectors when they have sought to visit the plant to address some of these same worker complaints.) Even when Ms. Argueta has been allowed access to the zone, she has been refused access to the plant itself on multiple occasions and instead has been made to wait in a zone office outside the plant (and thus away from her union’s members). She has also been followed by a security guard at all times when she is inside the zone. Plant management has made clear to worker leaders and to Ms. Argueta that she is not welcome in the plant. It is apparently now Russell’s position that none of these events occurred. For the reasons we cite above, we see no basis for lending any credence to these denials.

It is important, in considering present events and issues of evidence, to reflect on Russell’s credibility as a source of information. Russell does not begin here with a clean slate. The company has a documented history of firing workers in retaliation for their lawful exercise of their associational rights and then publicly denying that it has done so. As universities are all too well aware, Russell fired large numbers of workers last year over their decision to unionize, including many workers now employed at Jerzees de Honduras. When the WRC exposed these violations of workers’ associational rights, Russell initially denied that it had done anything wrong and accused the WRC of bias. Russell was later forced to admit that it had indeed fired workers inappropriately and was forced to reinstate them.

Now, a year later, Russell has announced a mass dismissal, through a factory closure, of many of these same workers – a decision that comes amidst ongoing anti-union machinations at the facility. Once again, the WRC has concluded that these firings are retaliatory. Once again, Russell has issued denials and accused the WRC of bias. Given Russell’s track record, there is simply no reason to give credence to the company’s claims. The testimony of a party who has previously provided misinformation regarding the very subject under investigation does not constitute credible evidence under any legitimate fact-finding standard. We must rely instead on the testimony of credible witnesses – in this instance, the plant’s workers, who, unlike Russell, have consistently provided accurate information concerning labor rights violations at the factory, and on documentary evidence – such as the Labor Ministry’s report concerning the anti-union petition recently circulated at the factory.

As we noted in our communication of October 10, the WRC will soon issue a detailed report concerning the crisis at Jerzees de Honduras. We anticipate completion of this report within two weeks. In the meantime, we encourage those universities that have licensing relationships with Russell to continue to communicate their concerns to the company regarding this urgent matter.

Please contact me if you have any questions concerning this information.

Scott Nova
Worker Rights Consortium
5 Thomas Circle NW
Washington DC 20005
ph 202 387 4884
fax 202 387 3292
[email protected]