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The name had also been a promise.
For the nearly 2,000 dismissed workers of Jerzees de Honduras, a Fruit of the Loom factory that produced clothing under the Russell Athletic brand, the opening of Jerzees Nuevo Dia in 2009 marked a literal “new day,” not only for their reinstated employment but also for industrial relations in the Central American nation, where more than half the population lives under the poverty line.
It was only a year before that an investigation by the Worker Rights Consortium, a labor watchdog group from Washington, D.C., concluded that the closure of Jerzees de Honduras mere days after Fruit of the Loom failed to reach a collective bargaining agreement with union representatives, was motivated “in significant part” by anti-union hostility.
But WRC documented other breaches of workers’ association rights, including Fruit of the Loom’s imposition of an employer-dominated scheme of worker representation known as a “collective pact” or the “delegate system” that it said undermined genuine freedom of association. Workers complained of harassment by supervisors, including threats that the factory could close if they didn’t stop organizing. Union officials and government inspectors were also denied access to the plant, they said.
Several of Jerzees de Honduras’ workers had arrived from another Fruit of the Loom factory, Jerzees Choloma, which WRC said had fired 145 workers in 2007 in retaliation for forming a union. After several student groups protested, the company rehired the workers, paid their back wages and recognized their union. And when Jerzees Choloma shuttered a few months later—without “persuasive” evidence that this was motivated by union-busting, according to WRC—the workers were allowed to transfer their employment.
So when Fruit of the Loom said that it would be closing Jerzees de Honduras for “economic reasons,” many didn’t buy it. It was, by that point, the only facility it owned with union representation. Fruit of the Loom, through Russell Athletic, was one of the largest producers of American collegiate apparel at the time, something that gave student activists organized under United Students Against Sweatshops no small amount of leverage. As a result, more than a dozen colleges, including Columbia University, Cornell University and the University of Michigan yanked their apparel licensing agreements with Russell Athletic, citing codes of conduct that required licensees to guarantee workers’ fundamental rights. The Fair Labor Association, the multi-stakeholder organization to which Fruit of the Loom belonged until last fall, also put the company under review.
In 2009, Fruit of the Loom’s Jerzees de Honduras workers’ union and its parent organization, the Central General de Trabajadores, or CGT, came together to sign what would become known as the Washington Agreement, which WRC called an “unprecedented” win for collective bargaining rights because of its legally binding nature, co-governed oversight and dispute resolution mechanism. As part of the pact, Fruit of the Loom opened Jerzees Nuevo Dia. It signaled the dawn of a different approach, one that provided unionists the opportunity to expand collective bargaining in Honduras as a whole.
“It was profoundly groundbreaking,” said Mark Anner, dean and distinguished professor at the Rutgers School of Management and Labor Relations, who wrote a report in 2022 placing into context the far-reaching impacts of the campaign for Pennsylvania State University’s Center for Global Workers’ Rights. Jerzees Nuevo Dia’s opening, he said, created a “snowball effect,” first rolling in other Fruit of the Loom factories, most of which formed unions of their own, then those belonging to other companies. By the end of 2021, Anner said, 22 collective bargaining agreements covered nearly 46,000 garment workers, or some 44 percent of the 105,000 people making clothing in Honduras. Wages rose to such an extent over the decade and a half since that the country’s living wage gap stands at 4 percent, versus 61 percent in Mexico and 63 percent in Bangladesh, according to WageIndicator estimates.
“I’ve been engaged with the global garment industry for 30-plus years, and I’ve never seen anything like what happened in Honduras,” he said. “Because it did something that other processes haven’t done. It not only improved working conditions, but it also empowered workers in a real and sustainable way. They had their union. They bargained collectively every so many years. They negotiated. They dealt with issues, not just wages, but even harassment at work, transportation, lunch subsidies. It was so incredibly important.”
Now, years of progress could soon unravel. Jerzees Nuevo Dia, along with another Fruit of the Loom unit known as Confecciones Dos Caminos, are on the chopping block. The company, said Theresa Haas, director of global strategies at Workers United, one of the civil society signatories of a letter protesting their closures, has been “quietly and slowly” winding down five of the six facilities it operated in Honduras while ramping up imports from third-party supplier factories in countries such as Bangladesh, where workers do not benefit from the same protections. The only plant that Fruit of the Loom has not targeted also happens to be the sole non-union one.
“The alarm really started to be raised when the remaining two unionized factories were announced for closure,” Haas said. The “new day for labor rights” that Jerzees Nuevo Dia embodied will sunset in May, as will any remaining production at Confecciones Dos Caminos. Layoffs have been in full swing at both facilities since January.
Fruit of the Loom has defended what it describes as “operation restructuring,” saying that it needs to “consolidate manufacturing capacity, adjust to changes in product demand and ensure the company remains financially healthy” amid “significant disruption” in the North American market, including the “considerable growth” of retailer private label offerings and “increased competition” from products imported directly from Asia. It also refuted claims that it was anti-union.
“Unfortunately, our restructuring effort has impacted multiple company facilities in the U.S., El Salvador, Haiti and Honduras over the last several years,” it said in a statement. “Decisions to close facilities are only made after careful review and consideration of alternative actions and are in no way based on the presence of unions in a facility. Fruit of the Loom has set an example in its commitment to freedom of association in its facilities, and this commitment remains by continuing to operate multiple unionized facilities in Honduras and elsewhere globally.”
It is Fruit of the Loom’s hope, it added, that it can “once again expand our operations in the Honduran communities in the future.”
A tarnished ‘example to the world’
But Evalina Argueta, a coordinator for CGT who led the fight at the former Jerzees de Honduras, said workers believe that the factory closures are a form of union-busting. It doesn’t make sense otherwise, they said, to retain a non-unionized over a unionized unit. Fruit of the Loom, according to Argueta, had already tried to negotiate a more favorable collective bargaining agreement “for the health of the company,” which the union had agreed to because it thought this would preserve the two facilities. This did not appear to be the case, however.
“We have made it clear to the company that we know that this closure of factories is anti-union,” Argueta said through a translator. “We have proved that they are shutting down every unionized factory, except for the non-union plant, as well as moving production from Honduras.”
The relationship between Fruit of the Loom and the unions representing its Honduran workers has deteriorated since the passing of then-CEO Rick Medlin in 2016, she said. When the Washington Agreement was signed, Medlin said he “did not just want to solve this one issue; he wanted to provide an example to the world.” Following his death due to natural causes at 68, Agueta wrote that “it is very sad when good people leave us.” She described Medlin as someone who, with “great humility and respect,” helped strengthen day-to-day labor relations between CGT, the unions and Fruit of the Loom at its Honduran factories. With multiple management changes that followed, those at the Fruit of the Loom’s helm didn’t have the same desire to engage with unionized workers in the same way, she added.
“You know, we have to ask a basic question: why is it every time there’s some market downturn, the first factories that get closed are the unionized ones?” Anner asked. “There’s a pattern there that we’ve seen in this industry forever, and that’s what concerns me about this case. You’re not only taking jobs from so many workers that had good jobs, but you’re also killing an example that’s so meaningful.”
The dismantling of the Washington Agreement, and indeed any collective bargaining agreements workers had with Fruit of the Loom, would be a profound loss, Anner said. His research indicates that compared to workers who do not have a collective bargaining agreement, Honduran garment workers buoyed by negotiated clauses are 67 percent more likely to be able to choose whether or not they worked overtime, 82 percent more likely to have subsidized meals, 94 percent more likely to have access to a company savings and loan account and 83 percent less likely to experience increasing work intensity over time.
Workers not covered by a collective bargaining agreement are also 20 percent more likely to face verbal abuse and, for women in particular, 11 percent more likely to experience sexual harassment in the workplace. Conversely, women workers who are covered by collective bargaining agreements are nearly 120 percent more likely to have a valid mechanism at work for addressing gender-based violence and harassment.
The expansion of collective bargaining, meanwhile, allowed unions to consolidate their power, expanding their influence beyond unionized workplaces through national tripartite bargaining with employer and government representatives that produced significant wage increases for garment workers, yes, but also provided them with respect and dignity at work, Anner said.
“We always go straight to the wage issue, but unions do so much more,” he said. “They establish grievance procedures. What’s the greatest fear? You get harassed and you speak up, and the only result is you don’t resolve the problem and you get fired for speaking. Unions protect against that. My fear is that without that union protection, the factories that are remaining that don’t have unions are not just facing lower wages and a squeeze on benefits but also abuse because workers aren’t meeting their quotas. And we know that’s so common and endemic in this industry.”
The effects wouldn’t be confined to Fruit of the Loom, either. Argueta said that the company’s actions could have a broader chilling effect on freedom of association in Honduras. Workers in the country have always looked up to the maquila sector. “For non-union workers to see that two factories that do have a union have been shut down is only going to make workers more fearful of organizing,” she said.
Right now, CGT and the unions are scrambling. They’re urging Fruit of the Loom, among other things, to expand, by six to 10 months, severance payments for workers with medical issues from years of repetitive, backbreaking, high-stress work. Argueta said that Fruit of the Loom has long reaped the benefits of the Washington Agreement: Production was high and their reputation received a boost. “We as workers knew that if Fruit of the Loom rose, we did too, so we wanted to do good work with them,” she said. “Now the workers feel defrauded.”
Jeff Hermanson is an American union activist who played a pivotal role in the 2009 negotiations. He said that what Fruit of the Loom is doing now puts a “tragic conclusion” to an agreement that provided freedom of association and collective bargaining rights to thousands of workers in Honduras.
“Fruit of the Loom’s decision to close unionized factories in Honduras is a result of the global apparel industry’s structural and systemic injustice, in which global brands survive—and in some cases thrive—through exploitation of the world’s poorest people in an unending race to the bottom,” he wrote in an email. “Fruit of the Loom is under extreme competitive pressure not only from other brands like Hanes and Gildan, but from retailers like Walmart and e-commerce giant Amazon, which knock off branded products and charge a hefty percentage for branded apparel sales in their stores or on their platforms. They have decided that the only way to deal with this pressure is by moving production to non-union factories in Morocco and Bangladesh. This move by Fruit of the Loom will result in the loss of employment by thousands of Honduran workers, in an economy that was already struggling.”
And while the Washington Agreement doesn’t explicitly prohibit factory closures or layoffs, Scott Nova, WRC’s executive director, said he believes they violate the spirit of the deal, as exemplified by Jerzees Nuevo Dia.
“That factory was the doorway through which workers all across Honduras walked to substantially transform the industry,” he said. “Honduras is the only country in the industry globally where the majority of workers are protected by genuine collective bargaining agreements. That all arises from that breakthrough.”
That Fruit of the Loom has used the Honduras example to tout its leadership in social responsibility, generating a tremendous amount of goodwill, including from the U.S. government, makes the situation even more disappointing, Nova said.
“And so, while we understand the difficult realities of the industry and the challenges the company faces, in our view, they had a fundamental moral obligation to keep this factory going. The choice not to do so is extremely unfortunate and does not speak well of the company.”
