WRC Factory Investigation


Factory: Quality/Elderwear

Key Buyers: Becky Thatcher, Mark Twain, School Days, Tom Sawyer

Last Updated: 2006

Case Summary

In response to a complaint from workers in late August 2006, the WRC undertook an inquiry into alleged worker rights violations at a factory known as Quality, located in Soyapango, El Salvador. The factory was closed in August of this year and production was relocated to a different region of El Salvador. At the time of the closure, Quality employed roughly 340 workers. Both Quality and a new factory to which production was shifted after the closure are wholly owned by Elderwear School Clothing Company. The primary issue of concern identified in the complaint was the alleged refusal on the part of Quality management to pay legally mandated terminal compensation to workers upon the closure of the factory. The complaint also alleged that supervisors made threats to workers who joined a recently established trade union in the factory and that the closure of the factory was motivated by anti-union animus, both of which, if true, would constitute violations of workers’ associational rights under Salvadoran law and applicable codes of conduct. Ultimately, the WRC was not able to determine conclusively whether or not anti-union animus was a factor in the decision to close the Quality factory and lay off the workforce. However, we did recommend that the company take steps to demonstrate its commitment to recognize and deal in good faith with the workers’ trade union and, in particular, ensure that elected leaders of the trade union be offered employment at the new facility without discrimination if they chose to relocate. With respect to the payment of severance, the negotiation process yielded a compromise decision in which Elderwear agreed to pay 75% of the severance owed to the workers under typical circumstances and 100% of severance for pregnant workers. The package amounted to roughly $375,000 for the approximately 350 workers combined – about $1,070 per worker. While the compromise reached was short of what workers were lawfully owed, the resolution was considered by worker representatives and other observers to be a generally positive outcome to the situation, particularly in the context of the Salvadoran apparel industry in which fly-by-night closures all too frequently deprive workers of all of the severance compensation they are due.

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