Jerzees de Honduras and Russell Athletics

Russell Athletics: A Case Study of Why Villanova University needs to sign on to the Designated Supplier Program:
Jerzees de Honduras, Russell Corporation and Berkshire Hathaway, Inc.

The Company
• Russell Corporation is a division of Fruit of the Loom, Inc., which is headquartered in Bowling Green, KY. Both companies are subsidiaries of Berkshire Hathaway, Inc., the Omaha, NE-based investment firm founded and headed by Warren E. Buffett.
• Berkshire Hathaway CEO Warren Buffett is the world’s richest person with a reported net worth of $62 billion. Berkshire Hathaway, whose other subsidiaries include See’s Candies and Dairy Queen, reported a profit of $13.2 billion in 2007.
• Jerzees de Honduras is a factory located in Choloma, Honduras, and owned and operated by the Russell Corporation of Atlanta, GA. The plant manufactures university logo apparel.

Labor Practices
• Russell employs 1800 workers at Jerzees de Honduras. In 2007, workers at Jerzees de Honduras and another Russell plant, Jerzees Choloma, began to form a union to improve their working conditions. Workers’ right to join a union is an internationally-recognized human right.
• Most recently workers have received death threats in connection with the factory’s closure, and USAS and the WRC have filed an emergency petition with the Inter-American Commission on Human Rights (IACHR) calling for urgent precautionary measures to be taken to guarantee the safety of union leaders.
• Between March and September 2007, Russell Corporation illegally fired 145 workers at Jerzees de Honduras and Jerzees Choloma for attempting to form a union. Firing workers in retaliation for joining a union is prohibited under Honduran law and university codes of conduct.
• Russell’s illegal mass firing of workers at these plants involved more than 8 separate incidents in March, June, July and September 2007 where it terminated workers in retaliation for having joined a union. Russell claimed the firings were “reduction[s] in personnel” based on economic factors.
• In October 2007, the Worker Rights Consortium (WRC) found that the firings violated Honduran law and university codes of conduct. After several universities threatened to cut off Russell’s license to make their logo apparel, the company agreed to ba2ck pay and reinstatement for all 145 fired workers and recognition of their union.
• From July to October 2008, workers at Jerzees de Honduras attempted to negotiate a union contract with Russell. On October 3, 2008, the negotiations ended in an impasse -- in part because Russell’s wage offer to the workers was a increase of 4 cents per day.
• On October 8, 2008, only a few days later, Russell announced it would close Jerzees de Honduras and terminate its 1800 workers. The closure of the plant is to be completed by March 2009.
• While Russell told universities that its decision was made for economic reasons, its managers in Honduras have been explicit that the decision was made to eliminate the union and its members. A WRC investigation found over 100 separate incidents where Russell management stated that Jerzees de Honduras would be closed because workers joined a union. In a 37-page report released in November 2008, the WRC concluded that this was, in fact, the true reason for Russell’s decision.