On March 7, 2016, the newly-formed Carlos Fonseca Amador union at Troon Manufacturing (also known as Pinehurst Nicaragua), located in Tipitapa, Nicaragua, filed a Third Party Complaint with the Fair Labor Association (FLA). The union alleged a number of violations of freedom of association, including management favoring one worker’s organization over another and interfering in the formation of a union; discrimination in hiring against union members; a bonus system that discriminates against certain workers; and verbal abuse and harassment by supervisors and members of the management team against workers affiliated with a union.
FLA Participating Company adidas-Group conducted an assessment of the allegations, and provided recommendations for remedial action, based on the findings of the assessment. Since the filing of the Third Party Complaint, the relationship between the Carlos Fonseca Amador union and Troon Manufacturing management improved significantly. The union informed the FLA that management investigated allegations of verbal abuse against workers and provided training to workers and managers on preventing and detecting harassment or abuse. The union also informed the FLA that the concerns about the payment of bonuses had been addressed. Finally, the union informed the FLA that management kept it informed about the economic situation of the factory and the difficult decisions that were impending as a result of sharp reductions in production orders since the first quarter of 2016.
On November 10, 2016, the Ministry of Labor gave permission to Troon Manufacturing to announce its closure based on economic conditions. Regrettably, on November 14, 2016, Troon Manufacturing management informed its labor force that it would close its doors and end its operations. On November 16, 2016, the Ministry of Labor approved the permanent closure of the factory and termination of workers. The FLA called on adidas-Group to work with Troon Manufacturing management to ensure that closure procedures met all requirements of local law and of the FLA Workplace Code of Conduct and periodically inform the FLA about compliance with these commitments. On December 8, 2016 adidas-Group informed the FLA that, upon the closure of Troon Manufacturing, workers received payment of their outstanding wages and severance-related benefits, which were paid out on November 17-18, 2016.
The complete final report on this complaint appears below.