WRC Update: Style Avenue (El Salvador)

WRC Header
To:WRC Affiliate Universities and Colleges
From:Scott Nova and Jessica Champagne
Date:July 6, 2012
Re:WRC Update: Style Avenue (El Salvador)

On October 13, 2011, the Worker Rights Consortium reported to affiliated colleges and universities about an investigative report released by the Institute for Global Labor and Human Rights (GLHR, formerly known as the National Labor Committee) and the Federation of Independent Associations and Unions of El Salvador (FEASIES). The report detailed labor rights violations at the Style Avenue factory located in El Salvador.

We are pleased to report that there has been significant progress in addressing these violations. The buyers have, in coordination with GLHR and FEASIES, communicated with factory management and are in the progress of remedying these violations. Factory management is meeting on a regular basis with the union representing the workers to discuss workplace issues.

The factory produces apparel for several collegiate licensees. College Kids and Outerstuff had not disclosed that they ordered collegiate apparel from Style Avenue, but have subsequently confirmed that they had collegiate production in the factory. In addition, adidas has granted a license to Outerstuff to produce NFL product bearing the adidas logo; some of this apparel was produced in this factory. The GLHR report stated that the Dallas Cowboys also produced apparel in this factory. The Dallas Cowboys have denied producing at Style Avenue. The Independent Monitoring Group of El Salvador (Grupo de Monitoreo Independiente de El Salvador, or GMIES) also reports that several non-collegiate brands and retailers, including Billabong, Fox, and Walmart, produce at Style Avenue, and that many of these brands place their orders through the buying agent Starland Group.

Remedying Inaccuracies in Disclosure

We are concerned that both College Kids and Outerstuff failed to disclose Style Avenue until GLHR exposed their presence at the facility. Failure to accurately disclose supplier factories is a violation of university codes of conduct.

Both licensees provided explanations of the issues that led to this failure to disclose, but neither licensee had a valid justification for this violation of university codes. College Kids has informed the WRC that the company had believed Style Avenue to be owned by Starland Group, and had included Starland Group in its disclosure data. Outerstuff stated that it had provided information on Style Avenue to the Collegiate Licensing Company (CLC), which compiles collegiate disclosure data for many universities, as part of a survey distributed to licensees. This survey, however, is neither part of nor a substitute for the disclosure process. 

Both licensees report that they have implemented new mechanisms to ensure accurate disclosure in the future. The WRC cannot attest to the effectiveness of these new mechanisms; the only indicator of whether the changes are adequate will be in whether future disclosure data is shown to be accurate and complete. College Kids has stated that it has created new processes to verify that, in the future, the company identifies and discloses the correct legal registration for each factory. College Kids has reviewed its current data and current licensing agreements, and has assured the WRC that all current factories are now disclosed properly. Outerstuff has also stated that it has initiated new procedures to ensure that it regularly verifies the accuracy of disclosure data and is in the process of compiling a fully updated list.

Remediation at Style Avenue

The report published by GLHR and FEASIES produced evidence of serious workers’ rights violations at Style Avenue, including the locking of workers into the factory building, excessive heat inside the plant, mandatory overtime, unsanitary conditions, verbal abuse of workers by supervisors, and violations of workers’ right to freedom of association.

Following the publication of the report, the WRC contacted Style Avenue’s customers —Outerstuff, College Kids, and adidas — and asked them to respond to the findings outlined in the report. The three brands jointly commissioned the Independent Monitoring Group of El Salvador (Grupo de Monitoreo Independiente de El Salvador, or GMIES) to conduct an independent investigation of the allegations. The Fair Labor Association (FLA) recommended GMIES, and GLHR concurred that GMIES was an appropriate investigator for this case. The buyers agreed that, if the findings were confirmed, they would work with the factory toward corrective action. 

Shortly following this, however, the GLHR reported that workers at Style Avenue had been subjected to additional intimidation by the company’s Human Resources Manager. There were reports of harsh anti-union statements by this person and other factory managers, including assertions that the union’s activities would destroy the factory and result in workers losing their jobs. When two fired union leaders were scheduled for reinstatement to their positions, as per a directive issued by El Salvador’s Ministry of Labor, rumors circulated that these workers would be met with violence upon their return.

Given the nature of the violations and the rumors of impending violence, it was clear that prompt action was necessary. With this type of violation of workers’ freedom of association, the longer management is allowed to continue its campaign to suppress workers’ desire to form a union, the less likely it is that any remedy will be able to undo the intimidation and chilling effect created by management’s behavior. For this reason, two days after the first contact with the buyers, the WRC once again contacted the same companies, making it clear that these violations must be addressed immediately, in advance of the release of the GMIES report. 

The WRC called upon the brands to contact the factory and press for a commitment to avoid any violence when the fired workers were to be returned to their posts. When the date came, the two workers were smoothly reinstated. However, management continued its efforts to suppress workers’ freedom of association. While GMIES was undertaking its investigation, a management-organized worker committee arose that was intended to deter independent worker organization. (For an analysis of management-organized worker bodies as a violation of ILO conventions and other standards of freedom of association, please see “Worker Rights Consortium Assessment re Rights of Association of Russell Athletic and Fruit of the Loom Employees in Honduras: Analysis of ‘Collective Pacts’” (June 19, 2009), available here.) Again, the WRC contacted the brands to emphasize the need for a prompt response to these continuing code violations. Buyer representatives traveled to El Salvador to meet with workers, union representatives and one of the owners of Style Avenue. The GLHR reported that, during the meeting, the buyers communicated to Style Avenue management their obligation to respect workers’ freedom of association, including two key remedies: (1) eliminating the management-organized worker committee, and (2) beginning a dialogue with the leaders of the independent union. The buyers also communicated the importance of replacing Style Avenue’s Human Resources Manager, who was, in the view of workers, the actor behind many of the violations. On November 3, 2011, two days after the meeting occurred, Style Avenue’s owner and general manager communicated to all workers that the management-organized worker committee was being dissolved. This was a key step towards restoring workers’ freedom of association.

In December 2011, roughly two months after the initial complaint was brought to the attention of the brands, GMIES published the findings of its investigation, available here. GMIES confirmed the primary findings in the GLHR and FEASIES report and identified additional violations at the plant, including sexual harassment, wage and hour violations, failure to comply with its healthcare and pension obligations, delays in paying vacation benefits, and violation of workers’ freedom of movement. The report also recommended a set of corrective actions to be undertaken by the factory, which were also endorsed by GMIES and by the FLA. Style Avenue committed to implement the corrective action plan.

Both GLHR and the union representing the workers have confirmed to the WRC that progress has subsequently been made on key elements of the remediation plan. Significantly, union leaders reported that factory management and the union are engaged in regular dialogue regarding issues in the factory, such as clarifying personnel policies and eliminating verbal abuse by supervisors. In addition, GLHR confirmed that the Human Resources Manager mentioned above has been removed from her position.  

The WRC will continue to monitor the situation at Style Avenue. Please contact us if you have any questions.

Scott Nova 
Worker Rights Consortium 
5 Thomas Circle NW 
Washington DC 20005 
ph 202 387 4884 
fax 202 387 3292 
nova@workersrights.org 
www.workersrights.org

WRC-Header
To:WRC Affiliate Universities and Colleges
From:Scott Nova and Jessica Champagne
Date:July 6, 2012
Re:WRC Update: Style Avenue (El Salvador)

On October 13, 2011, the Worker Rights Consortium reported to affiliated colleges and universities about an investigative report released by the Institute for Global Labor and Human Rights (GLHR, formerly known as the National Labor Committee) and the Federation of Independent Associations and Unions of El Salvador (FEASIES). The report detailed labor rights violations at the Style Avenue factory located in El Salvador.

We are pleased to report that there has been significant progress in addressing these violations. The buyers have, in coordination with GLHR and FEASIES, communicated with factory management and are in the progress of remedying these violations. Factory management is meeting on a regular basis with the union representing the workers to discuss workplace issues.

The factory produces apparel for several collegiate licensees. College Kids and Outerstuff had not disclosed that they ordered collegiate apparel from Style Avenue, but have subsequently confirmed that they had collegiate production in the factory. In addition, adidas has granted a license to Outerstuff to produce NFL product bearing the adidas logo; some of this apparel was produced in this factory. The GLHR report stated that the Dallas Cowboys also produced apparel in this factory. The Dallas Cowboys have denied producing at Style Avenue. The Independent Monitoring Group of El Salvador (Grupo de Monitoreo Independiente de El Salvador, or GMIES) also reports that several non-collegiate brands and retailers, including Billabong, Fox, and Walmart, produce at Style Avenue, and that many of these brands place their orders through the buying agent Starland Group.

Remedying Inaccuracies in Disclosure

We are concerned that both College Kids and Outerstuff failed to disclose Style Avenue until GLHR exposed their presence at the facility. Failure to accurately disclose supplier factories is a violation of university codes of conduct.

Both licensees provided explanations of the issues that led to this failure to disclose, but neither licensee had a valid justification for this violation of university codes. College Kids has informed the WRC that the company had believed Style Avenue to be owned by Starland Group, and had included Starland Group in its disclosure data. Outerstuff stated that it had provided information on Style Avenue to the Collegiate Licensing Company (CLC), which compiles collegiate disclosure data for many universities, as part of a survey distributed to licensees. This survey, however, is neither part of nor a substitute for the disclosure process. 

Both licensees report that they have implemented new mechanisms to ensure accurate disclosure in the future. The WRC cannot attest to the effectiveness of these new mechanisms; the only indicator of whether the changes are adequate will be in whether future disclosure data is shown to be accurate and complete. College Kids has stated that it has created new processes to verify that, in the future, the company identifies and discloses the correct legal registration for each factory. College Kids has reviewed its current data and current licensing agreements, and has assured the WRC that all current factories are now disclosed properly. Outerstuff has also stated that it has initiated new procedures to ensure that it regularly verifies the accuracy of disclosure data and is in the process of compiling a fully updated list.

Remediation at Style Avenue

The report published by GLHR and FEASIES produced evidence of serious workers’ rights violations at Style Avenue, including the locking of workers into the factory building, excessive heat inside the plant, mandatory overtime, unsanitary conditions, verbal abuse of workers by supervisors, and violations of workers’ right to freedom of association.

Following the publication of the report, the WRC contacted Style Avenue’s customers —Outerstuff, College Kids, and adidas — and asked them to respond to the findings outlined in the report. The three brands jointly commissioned the Independent Monitoring Group of El Salvador (Grupo de Monitoreo Independiente de El Salvador, or GMIES) to conduct an independent investigation of the allegations. The Fair Labor Association (FLA) recommended GMIES, and GLHR concurred that GMIES was an appropriate investigator for this case. The buyers agreed that, if the findings were confirmed, they would work with the factory toward corrective action. 

Shortly following this, however, the GLHR reported that workers at Style Avenue had been subjected to additional intimidation by the company’s Human Resources Manager. There were reports of harsh anti-union statements by this person and other factory managers, including assertions that the union’s activities would destroy the factory and result in workers losing their jobs. When two fired union leaders were scheduled for reinstatement to their positions, as per a directive issued by El Salvador’s Ministry of Labor, rumors circulated that these workers would be met with violence upon their return.

Given the nature of the violations and the rumors of impending violence, it was clear that prompt action was necessary. With this type of violation of workers’ freedom of association, the longer management is allowed to continue its campaign to suppress workers’ desire to form a union, the less likely it is that any remedy will be able to undo the intimidation and chilling effect created by management’s behavior. For this reason, two days after the first contact with the buyers, the WRC once again contacted the same companies, making it clear that these violations must be addressed immediately, in advance of the release of the GMIES report. 

The WRC called upon the brands to contact the factory and press for a commitment to avoid any violence when the fired workers were to be returned to their posts. When the date came, the two workers were smoothly reinstated. However, management continued its efforts to suppress workers’ freedom of association. While GMIES was undertaking its investigation, a management-organized worker committee arose that was intended to deter independent worker organization. (For an analysis of management-organized worker bodies as a violation of ILO conventions and other standards of freedom of association, please see “Worker Rights Consortium Assessment re Rights of Association of Russell Athletic and Fruit of the Loom Employees in Honduras: Analysis of ‘Collective Pacts’” (June 19, 2009), available here.) Again, the WRC contacted the brands to emphasize the need for a prompt response to these continuing code violations. Buyer representatives traveled to El Salvador to meet with workers, union representatives and one of the owners of Style Avenue. The GLHR reported that, during the meeting, the buyers communicated to Style Avenue management their obligation to respect workers’ freedom of association, including two key remedies: (1) eliminating the management-organized worker committee, and (2) beginning a dialogue with the leaders of the independent union. The buyers also communicated the importance of replacing Style Avenue’s Human Resources Manager, who was, in the view of workers, the actor behind many of the violations. On November 3, 2011, two days after the meeting occurred, Style Avenue’s owner and general manager communicated to all workers that the management-organized worker committee was being dissolved. This was a key step towards restoring workers’ freedom of association.

In December 2011, roughly two months after the initial complaint was brought to the attention of the brands, GMIES published the findings of its investigation, available here. GMIES confirmed the primary findings in the GLHR and FEASIES report and identified additional violations at the plant, including sexual harassment, wage and hour violations, failure to comply with its healthcare and pension obligations, delays in paying vacation benefits, and violation of workers’ freedom of movement. The report also recommended a set of corrective actions to be undertaken by the factory, which were also endorsed by GMIES and by the FLA. Style Avenue committed to implement the corrective action plan.

Both GLHR and the union representing the workers have confirmed to the WRC that progress has subsequently been made on key elements of the remediation plan. Significantly, union leaders reported that factory management and the union are engaged in regular dialogue regarding issues in the factory, such as clarifying personnel policies and eliminating verbal abuse by supervisors. In addition, GLHR confirmed that the Human Resources Manager mentioned above has been removed from her position.  

The WRC will continue to monitor the situation at Style Avenue. Please contact us if you have any questions.

Scott Nova 
Worker Rights Consortium 
5 Thomas Circle NW 
Washington DC 20005 
ph 202 387 4884 
fax 202 387 3292 
nova@workersrights.org 
www.workersrights.org