Supply Chain Innovation

Cimatextiles Factory in Guatemala

Publication date: 
Sunday, June 15, 2008

On June 15, 2008, FLA released a report on a Third Party Complaint (3PC) filed by unions SITRACIMA and SITRACHOI alleging that local factory management at Cimatextiles in Guatemala threatened to close the facility in violation of workers’ freedom of association rights. FLA affiliate Liz Claiborne, Inc. sourced from the factory at the time the 3PC was filed. FLA-accredited monitor Comisión para la Verificación de Códigos de Conducta (COVERCO) investigated the allegations. COVERCO found that the trade union’s legitimacy and right to collective bargaining had not been respected, that the union had not been consulted on the closure, and workers had not been paid the correct severance. While Cimatextiles did close its doors in September 2007, Liz Claiborne was able to conduct remediation activities in the neighboring Choishin factory, which shared owners with the Cimatextiles factory. Choishin management and the union signed an agreement ensuring that first employment opportunities and negotiated severance payments would go to former Cimatextiles workers. Liz Claiborne further engaged a consultant to review hiring and termination practices and grievance procedures, and to provide training, at all of its suppliers in Guatemala.

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