WRC Update: Ongoing Crisis at BJ&B

To:Primary Contacts, WRC Affiliate Colleges and Universities
From:Scott Nova
Date:March 20, 2007
Re:WRC Update: Ongoing Crisis at BJ&B


I write to update you on important developments relating to the announced closure of the BJ&B factory in the Dominican Republic. The WRC is very concerned about this announced closure, which involves a factory where great strides have been made on labor rights.

I would like to make sure universities understand that there has not been a resolution of the BJ&B case, either with respect to the issue of severance for the workforce or with respect to the closure itself. A communication circulated by Nike on Friday – to the effect that these issues are now resolved – is not accurate.

With respect to the severance issue, the public statements circulated by Nike suggest that: a) BJ&B’s parent company Yupoong has engaged in good faith negotiations over severance for the BJ&B workforce; b) that these good faith negotiations have led to a collective severance agreement for the workforce; c) that the severance issue is now resolved. In fact, Yupoong has not negotiated over severance for the BJ&B workforce and has reached no collective agreement providing severance to the BJ&B workforce. Indeed, Yupoong sought from the outset to preempt such negotiations, by conditioning payment of legally mandated severance and notice pay on workers’ signing away their right to any negotiation for severance beyond the legal minimum. The only negotiation Yupoong has been willing to conduct concerns severance for a small number of union officials and pregnant workers. Yupoong has refused to enter into any negotiation for severance for the overall workforce. Even the narrow agreements that have been concluded have become the subject of great controversy – after they were renounced by five of the union leaders, and subsequently denounced, in a letter to Nike and adidas, by the president of the union federation.

We will in the coming days provide more detailed information on the dispute over severance and what has become, at this point, a rather tortured and complex series of events. In the meantime, as an illustration of just how wide the chasm is between the parties, please see attached the public statement issued by Nike on March 16, and a letter sent by the president of the union federation that represents many of BJ&B’s workers on March 9 to Nike and adidas (with a long list of stakeholders copied). It bears noting that no new agreements were reached between the dates on which these communications were sent. While the WRC does not necessarily agree with characterizations made by the union president of the events that have transpired, the union president’s communication – set along side the Nike statement – illustrates very clearly that the severance issue remains the subject of intense dispute.

In view of the developments on the ground, and the letter to Nike from the union federation president, we do not understand why Nike issued a message to stakeholders on Friday reporting that all the issues are resolved. We are communicating our concerns to Nike about this misleading communication.

At present, the WRC’s primary focus is not on severance, but on bringing all of the stakeholders together to discuss the reasons for the crisis at BJ&B and to explore strategies for keeping the factory open. It is important to understand that BJ&B workers, and the union federation representing many of those workers, are calling on Yupoong, and its customers, to keep BJ&B open. While it is difficult to reverse a decision to close a factory, it is our view at WRC that such a reversal may be possible in this case. Given the importance of what has been achieved at BJ&B, we believe that all potential avenues for saving the factory should be explored.

We also hope that by assembling the stakeholders, it will be possible to shed further light on the underlying causes of the crisis at BJ&B. It has been difficult for the WRC to determine the reasons for the factory’s closure, and to fully assess the veracity of the claims that have been made by various parties, because we have not been able to obtain critical data from Nike, adidas and Yupoong. Getting the key players together is the best way to dig deeper into the causes of the crisis, and the best way to determine whether there are viable strategies for keeping BJ&B open. Toward this end, the WRC is convening a stakeholder meeting on April 5 in New York. Key university licensees, Yupoong, union representatives, and a number of other stakeholders have been invited. The WRC has asked the FLA to participate in the process; as you know, our two organizations have worked closely at BJ&B in the past. Adidas has agreed to participate in the meeting. We understand that Nike is refusing to attend the meeting, but we have just received Nike’s communication and have not yet digested it.

We will update you. We will also provide you with additional detail concerning the severance dispute later this week. In the meantime, please feel free to contact me regarding the situation.

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