New WRC Report – Hugger and Vision Tex

The WRC has documented code of conduct violations at two Nike supplier factories in Honduras: Hugger de Honduras and Vision Tex. Prior to the closure of these facilities in January 2009, Nike sourced collegiate licensed apparel from both, primarily on a subcontract basis. Nike was by far the largest customer at 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. The WRC’s findings are outlined in a detailed report, which is attached to this message.

The denial of legally mandated severance is a serious problem in the apparel industry and it can have a devastating impact on workers. For many dismissed workers, the severance they have earned is the primary – and often the only – means of economic survival for themselves and their families.

The WRC has sought since February to encourage Nike to press its contractors, which were the facilities’ direct customers, to address the violations. Thus far, no progress has been achieved through any action by these companies. The only funds the workers have received were generated by the workers’ liquidation of the assets of the closed factories (e.g., the remaining machinery). This covered less than one sixth of the compensation owed.

We continue to hope that Nike will exert the substantial influence it possesses with its business partners to persuade them to compensate the workers and remedy these code of conduct violations.

Please feel free to contact me if you have questions or would like to discuss this report.

Scott Nova
Worker Rights Consortium
5 Thomas Circle NW
Washington DC 20005
ph 202 387 4884
fax 202 387 3292
[email protected]
www.workersrights.org