Workers at Outerstuff Supplier Are Owed $1.8 Million

Please find here a new report from the WRC on the denial of approximately $1.8 million in legally owed wages, severance, and other compensation to 244 former workers of the collegiate apparel supplier Style Avenue, in El Salvador. The licensee that produced university logo apparel at Style Avenue, and was the factory’s primary buyer for many years, was Outerstuff LLC. Outerstuff made both collegiate (under the College Vault, Team Athletics, and Gen2 labels) and non-collegiate licensed childrenswear (including apparel co-branded with Disney and the NBA and NFL) at Style Avenue.
 
The WRC’s investigation found that Outerstuff’s failure to ensure that workers receive the compensation they are legally due represents a violation of universities’, as well as Disney’s, codes of conduct and is having a severe impact on the affected workers and their families. Because of the many years they worked at the factory, the majority of the Style Avenue workers are owed an amount equal to at least 18 months of wages. Some are owed far more. The violations at Style Avenue have robbed many workers of what are, in effect, their life’s savings.
 
In anticipation of substantial interest in this report, given the gravity of the violations and Outerstuff’s outright refusal to address them, the WRC will be holding a Q&A session, by Zoom, from 2:30 – 3:15 p.m. ET this Wednesday (tomorrow). We will provide a concise overview of our findings and Outerstuff’s response and take any questions. We realize the short notice will limit attendance; we welcome anyone who has questions but is unable to join the call to reach out to us directly to arrange a time to talk one-on-one.
 
Style Avenue ceased operations in February of this year, when one of its owners was jailed for having failed to make required contributions to government healthcare and retirement funds. Although the owner was subsequently released, the factory never resumed operation and officially closed in May. When the factory ceased operations, the WRC advised Outerstuff that, if it did not reopen, Outerstuff was responsible under university codes of conduct for ensuring workers received all legally mandated compensation—if necessary, by paying workers, itself, if the owners were unable or unwilling to do so.
 
Outerstuff never indicated at the time that it did not accept this obligation. Since the factory closed in May, however, Outerstuff has not only refused to correct the denial of compensation to workers, who made collegiate apparel, but actually claimed that university codes do not require it to do so.
 
Outerstuff has claimed that university codes only require it to remedy, itself, nonpayment of compensation for Outerstuff’s own employees and not compensation due to workers who make Outerstuff’s collegiate products at supplier factories. Since Outerstuff, like nearly all licensees, does not operate any factories, or employ any factory workers, this means it is refusing to correct any wage or severance violations against workers who make its collegiate products if it has to use its own money to do this.
 
Outerstuff’s refusal contradicts not only what university codes actually require but what university licensees have done in similar cases. Licensees that have provided funds, themselves or through agents, to remediate code violations by suppliers at collegiate factories include all of the following:  adidas, American Eagle (Tailgate), Camp David, Cutter & Buck, Fanatics, Fruit of the Loom (Russell), Gorilla Marketing, Hanesbrands (Gear for Sport, Knights Apparel), Hype & Vice, and Nike. Unlike Outerstuff, which was at Style Avenue for many years and represented the vast bulk of the factory’s output, some of these licensees had done business with the offending supplier for relatively brief periods and/or made up only a modest share of production. They contributed substantial funds anyway, thereby ensuring that workers received the compensation they were legally owed.
 
Indeed, even many non-licensee brands, despite not being covered by the binding labor standards that apply to university licensees, now have contributed their own funds in cases of unpaid severance or wages. Examples include PVH (Calvin Klein and Tommy Hilfiger), Gap Inc. (Gap and Old Navy), and Victoria’s Secret, as well as other Disney licensees like Barco Uniforms.
 
Outerstuff has offered a number of claims and arguments to defend its actions, none of which are persuasive. These are discussed at length in our report.
 
To remedy the denial of legal compensation to these workers, Outerstuff must provide workers with sufficient funds to ensure that its obligations under university codes are fulfilled.
 
As always, please contact us with any questions or concerns.