WRC Factory Investigation

Hugger de Honduras

Factory: Hugger de Honduras

Key Buyers: 3 Suisses International, H&M, Men's Work Wearhouse, Nike, Otto

Year: 2011

Case Summary

The WRC documented code of conduct violations at two Nike supplier factories in Honduras which closed in January 2009: Hugger de Honduras and Vision Tex. Prior to the closures, Nike sourced collegiate licensed apparel from both, primarily on a subcontract basis. Nike production – both collegiate and non-collegiate – represented a large percentage of the work of both factories for a substantial period of time. The WRC launched investigations concerning Hugger and Vision Tex in response to worker complaints alleging that the factories, which closed without warning, failed to pay workers legally mandated severance and other terminal compensation. The WRC determined that Hugger and Vision Tex illegally denied workers a combined total of more than two million dollars in compensation. In the case of Vision Tex, in addition to non-payment of severance and other terminal compensation, the factory did not pay workers anything for their last week of work. On July 23, 2010, Nike committed to:

  • Pay $1.54 million to the workers – to be distributed by the WRC, the Solidarity Center, and worker representatives
  • Provide the workers and their families with a year of health insurance
  • Take several measures that will lead to the re-employment of many of the workers at Nike supplier factories

While the funds have been paid and the health insurance has been provided, few workers have yet been hired through Nike’s rehiring program. The WRC is continuing to monitor implementation of the agreement.

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