US bike brand Specialized is being asked to pay part of $659,000 owed to former workers of a factory in El Salvador which produced Specialized branded apparel.
The closure of the APS Salvador factory in August 2022 allegedly left around $2 million unpaid in severance packages, terminal benefits, and wages. The majority of this has now been repaid through contributions from several companies that used the factory as a supplier.
Specialized is being asked to contribute to the remaining outstanding sum, which the Worker Rights Consortium (WRC) describes as "money these workers legally earned while making apparel for these brands and money they and their families still desperately need."
The request is contained within a report by the WRC detailing unpaid sums to 831 employees of the APS El Salvador factory outlined by the Salvadorian Ministry of Labour. The owners of the APS factory were identified as Oneworld Star International which was a subsidiary of Shangying Global – formerly a publicly traded Chinese company which no longer exists.
The closure of the parent company left the factory workers without an immediate route to payment, so WRC has pursued those brands and companies that used the products manufactured at the APS factory.
The report detailed several North American brands that had used the factory as a supplier—in some cases placing orders directly and in others through a buying agent. Those brands include HanesBrands International (for its Champion brand), Gildan Activewear, Kellwood Company, and Specialized Bicycle Components.
The report acknowledged that of the outstanding $2 million, approximately 67% had now been paid by Kellwood, Gilden and a buying agent, Alwants, to compensate the workers from APS.
The WRC believes that Specialized and HanesBrands should contribute the remaining 33% of the outstanding funds.
“Because of the failure of Hanesbrands and Specialized to make any meaningful contribution to support the APS workers to date, workers have no immediate prospect of receiving approximately 33 per cent of the compensation that was legally due to them at the time their employment was terminated—an amount equal to roughly $659,000,” the WRC outlines in its report.
In testimony given to the WRC, workers affected have been "unable to pay rent, utility bills and children’s school fees", and were "not able to pay for medical care or buy enough food to eat for their families".
WRC has not clarified whether Specialized engaged the factory directly or through a buyer. However, Specialized, in a written statement, described ongoing discussions with its “supplier that utilized this El Salvador factory,” suggesting that the company did not directly engage APC as a supplier. It is also not clear what the split of the requested contribution is between HanesBrands and Specialized.
The report explains that HanesBrands has offered a ‘token amount’ of compensation but that WRC does not consider this sufficient.
While there is no obvious legal obligation for Specialized or HanesBrands to contribute to the workers of the factory, WRC stressed that the failure to make a substantial contribution is at odds with the code of conduct for labour practices outlined by both brands.
In the case of Specialized, WRC points to value claims made on Specialized’s website suggesting that the brand believes it should “promote human rights … in our supply chain”, and that it is believes it should “actively work to improve the social and environmental performance of our suppliers”.
Worker rights group Green America has also been vocal in criticism of Hanes (HanesBrands) and Specialized.
“We stand in solidarity with the garment workers of El Salvador to advocate for wage justice,” said Jean Tong, Labor Justice Campaigns Director at Green America. “At Green America, we believe in the collective power of consumers. By choosing where we spend our money, we can encourage businesses to adopt fair labor practices. We urge Specialized and Hanes to immediately join other companies that have committed to accountability and pay the workers for their labor.”
The WRC claims it has made numerous attempts to engage with Specialized over the requested contribution, but at the time of publishing its report, it claims Specialized has “never responded to these communications.”
In a statement to Cyclingnews, Specialized responded to the report from WRC.
“Specialized takes its commitment to responsible manufacturing very seriously,” the statement read. “We have been in constant communication with our supplier that utilized this El Salvador factory in the past and have clearly communicated our expectation that the workers’ claims be handled and resolved appropriately.
“While we are not privy to the details of the ongoing legal process involving the workers and the factory, we have been monitoring and will continue to monitor the matter in close cooperation with our supplier and are looking forward to a resolution through the local process and in accordance with our expectation.”
The statement then highlighted Specialized’s commitment to responsible manufacturing. “For manufacturing partners who are of strategic importance,” this page reads, “we conduct a comprehensive audit that covers occupational health and safety, labor law compliance, as well as compliance with environmental regulations.”
Cyclingnews has also approached HanesBrand for comment.
