FLA Report on Hong Seng (Nike)

December 17, 2024

Dear Colleagues,
 
The Fair Labor Association (FLA) has issued a report on Hong Seng, the collegiate supplier factory in Thailand that forced workers to give up mandatory leave pay in clear violation of university standards. Nike has insisted that these workers gave up their pay voluntarily and has refused to ask the factory to pay back wages.
 
When the FLA decided to investigate, we expected, given the overwhelming evidence that workers were coerced, that the FLA would retain an experienced labor rights investigator who would find these violations and hopefully convince Nike to finally and fully remediate. Unfortunately, as we explain below, this did not turn out to be the case.
 
We have reviewed the FLA report, and we do note one important area of agreement between the FLA’s investigator’s findings and the WRC’s: the FLA investigator acknowledges the need for the factory’s 3,000+ workers to receive compensation. This directly contradicts Nike’s longstanding insistence that no compensation is due to workers.
 
However, the amount of compensation the FLA investigator proposes is a fraction of what university standards require. Therefore, even if Nike tells Hong Seng to pay what the investigator recommends, this will not resolve the case.
 
The investigator cites no objective standard of compensation, but the modest amount she proposes reflects a failure to recognize some of the most serious violations at the factory. This arises from severe flaws in the FLA investigator’s approach, which are, in turn, a result of the FLA’s surprising decision not to retain an experienced labor rights investigator for this inquiry.
 
The FLA entrusted this investigation to a novice: a law professor in Thailand who has written on labor law but had never conducted a labor rights investigation before this one. Despite her inexperience, the FLA declined to tell the investigator how to conduct a proper inquiry, imposing no requirement that she meet any methodological standard. (The FLA advises us that its complaint process precludes setting such guidelines, but this underscores the need for someone with investigative experience.)
 
In the absence of guardrails, the FLA investigator chose ineffective worker interview and survey methods that have long been known to result in violations being missed. She also failed to apply basic standards of labor rights protection in her analysis.
 
For example: The investigator acknowledges that workers who refused the company’s demand that they take unpaid leave were all relentlessly hounded by management and then deprived of their leave pay anyway. She also acknowledges that the factory fired a worker for bringing a complaint about the unpaid leave to the government (which ruled in the worker’s favor). The investigator further acknowledges that the factory filed a criminal complaint with the Thai police against another worker, a Burmese migrant, for posting criticism of the factory’s unpaid leave demand on Facebook.
 
Astoundingly, the FLA’s investigator concludes that this behavior is consistent with the factory giving the workforce a voluntary choice concerning unpaid leave. She goes so far as to defend the decision of Hong Seng to report the migrant worker to the police, which forced him to flee the country with his wife and infant child to avoid arbitrary arrest.
 
The investigator conducted 90% of her worker interviews inside the factory, with management having full knowledge of who was interviewed, even though she herself acknowledges that workers face abuse and harassment in the facility. The WRC warned the investigator, when we spoke to her at the outset of her investigation, that this approach would discourage many workers from providing candid testimony about the conflict over unpaid leave. She ignored these warnings.
 
The investigator does allow, at the end of her report, that some of the factory’s actions “could be seen as coercive” under FLA standards and that “communication” in the factory could have been better. This is the basis for the partial compensation she proposes.
 
Universities codes, however, require full remediation of labor rights violations, not partial. Unless Nike chooses to go beyond the FLA investigator’s recommendation and pay the workers all they are owed, there will not be full remediation for the workforce at Hong Seng.
 
We respect the work that many WRC affiliate universities do with the FLA. Our concerns are specific to the FLA’s investigation of Hong Seng, and we feel an obligation to convey these concerns forthrightly to our affiliates. We have talked to the FLA staff extensively about the case, and the lines of communication will remain open.
 
This message is not intended to address every aspect of the FLA report. We will have more to share with you after the holiday. In the meantime, please feel free to contact me with questions or to discuss.
 
Best,
 
Scott Nova