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WRC Factory Investigation

Pure Cotton

Factory: Pure Cotton

Key Buyers: Hype & Vice

Year: 2019

Case Summary

The WRC investigated violations of university codes of conduct by Pure Cotton, a company located in Los Angeles, California, that supplied collegiate apparel to the licensee, Hype & Vice, LLC (Hype & Vice).

In September 2018, California state inspectors cited Pure Cotton, and a small subcontract factory operating at the same address, Union Supply, for violations of state minimum wage standards. When contacted by the WRC about these violations, Hype & Vice reported that Pure Cotton had denied that it had subcontracted production of the former’s collegiate apparel to Union Supply. However, state inspectors provided convincing evidence—photographs of collegiate apparel found at Union Supply and records from Pure Cotton of its subcontracting—that proved that these garments had, indeed, been produced by Union Supply. The WRC also learned from state labor inspectors that there was no realistic prospect that Union Supply would pay the penalties it had been assessed, so that workers could receive funds they were owed.

The WRC recommended to Hype & Vice that it correct the violation of university codes of conduct that had occurred by making payment itself to Union Supply’s workers. Hype & Vice, which is a small licensee with extremely limited resources, demonstrated that full payment was beyond the company’s capacity. The WRC and Hype & Vice agreed, therefore, on a corrective action plan, where the licensee will pay workers half the penalties over a 24-month period.

The WRC believes that, given the circumstances, these commitments fulfill Hype & Vice’s obligations under university codes of conduct to take corrective action to address the violations committed by this subcontractor of its supplier, Pure Cotton. Hype & Vice, which had already ended its business relationship with Pure Cotton, has begun sourcing from a different LA manufacturer and adopted greater due diligence in overseeing its production.

As this case illustrates, wage-and-hour violations are pervasive in the garment manufacturing sector in southern California. Recent enforcement actions by government regulators have found more than 80% of factories they inspected to be violating wage-and-hour laws, with some workers paid as little as one-third of the applicable legal minimum wage. This situation underscores the need for university licensees sourcing apparel from suppliers in southern California to conduct enhanced due diligence to ensure factories’ compliance with the law and ensure that their purchasing practices support this.