WRC Factory Investigation

L&Y Embroidery

Factory: L&Y Embroidery

Key Buyers: Zephyr

Year: 2020

Case Summary

The WRC’s investigation found that L&Y, a subcontractor to college logo cap factory, Han Apparel (Han), violated Bangladeshi labor law and university codes of conduct by terminating at least seven employees without providing them legally required notice and severance benefits. After engagement by the WRC with Han’s buyer for collegiate products, university licensee Zephyr Headwear (Zephyr), the seven workers were paid US$817.38 per employee, which is equal to an average of nine months’ salary for each of the workers who were owed this compensation.

As detailed in the report, this was the third instance that Han had subcontracted Zephyr’s collegiate apparel production to another factory, without disclosing the subcontractor in question to the licensee and, thereby, causing Zephyr to fail to disclose the subcontracted factory to universities. In light of Han Apparel’s repeated violation of its obligations to Zephyr under university codes, the WRC recommended and Zephyr agreed to impose economic penalties on Han Apparel. The WRC is optimistic that this will prevent further such noncompliance by this supplier.

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