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WRC Factory Investigation

Jerzees Choloma, Jerzees de Honduras, Jerzees Nuevo Dia

Factory: Jerzees Choloma, Jerzees de Honduras, Jerzees Nuevo Dia

Key Buyers: Russell

Year: 2009

Case Summary

A set of ground-breaking agreements were reached on November 14, 2009 between Russell Athletic/Fruit of the Loom and the union representing Jerzees de Honduras (JDH) workers and, separately, between the company and the WRC to address labor rights issues in the company’s operations in Honduras. The agreements were the culmination of WRC investigation and remediation efforts spanning a twenty-six month period. The WRC’s work at the Jerzees Choloma (JCH) and JDH factories was initiated in September 2007, pursuant to allegations that the both facilities – which are located nearby each other in the city of Choloma, Honduras – had dismissed large numbers of workers in retaliation for their decision to form unions. The WRC found that the dismissals were unlawful. Ultimately, following the engagement of WRC affiliate universities, Russell agreed to provide offers of reinstatement and back pay totaling roughly $150,000 to 145 dismissed workers. The Jerzees Choloma facility was closed several months later in March 2008. The WRC did not find persuasive evidence that the closure was motivated by anti-union animus – and, mitigating the impact of the closure, per a WRC recommendation, all JCH workers were offered the opportunity to transfer to JDH. In October 2008, Russell announced plans to close the JDH facility, leaving its 1,200 workers without employment. In this instance, the WRC found that the company’s decision to close the JDH factory – which was announced days after an impasse was reached in collective bargaining with the union – was motivated, at least in significant part, by anti-union animus – a serious violation of workers’ rights to freedom of association. The WRC also documented additional violations of workers’ associational rights, including the company’s imposition, in its remaining plants in that country, of an employer-dominated scheme of worker representation, in the form of “collective pacts” and a so-called “delegate system” (often referred to as “solidarista” organizations). Very substantial efforts were made by WRC affiliate universities – including students, faculty, and administrators – and range of other organizations in the U.S., Canada, Europe, and Central America to persuade the company to undertake corrective action. Through the November 2009 agreements, Russell Athletic/Fruit of the Loom committed, in accordance with longstanding WRC recommendations, to rehire and compensate JDH’s 1,200 dismissed workers, open a new unionized factory in Honduras, and take concrete steps to respect and recognize its workers’ rights to freedom of association at the company’s seven other existing Honduran plants. Certain aspects of these agreements are particularly noteworthy, as they include measures to protect freedom of association that are, to our knowledge, unprecedented in agreements of this type in Central America. These include: (a) union access to, and joint union-management freedom of association trainings in, all of the company’s unorganized plants in Honduras, (b) employer neutrality regarding future organizing efforts, and (c) mechanisms for third-party dispute resolution. Importantly, the company also has agreed to phase-out existing “solidarista” employee representation systems at its non-union plants to ensure that these do not obstruct workers’ exercise of freedom of association. Russell Athletic/Fruit of the Loom is Honduras’ largest private employer. It is a subsidiary of Berkshire Hathaway. The WRC will closely monitor implementation of the agreements going forward.

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