For a decade, Nery Ramirez toiled eight hours a day, six days a week as a line operator at Industrias Florenzi, a garment factory in El Salvador. For $295 a month, she specialized in piecing together medical scrubs, including “Grey’s Anatomy”-branded styles based on the ABC network’s long-running medical drama.
It was when Barco Uniforms, the Los Angeles company that sells the “Grey’s Anatomy” scrubs, unexpectedly pulled production from the factory after a 15-year run in December 2019 that Ramirez began noticing “symptoms” that something was wrong.
“I was in the union and we were like the physicians,” she told Sourcing Journal through a translator. Industrias Florenzi’s management, Ramirez said, started doling out only partial salaries. Vacation pay evaporated, as did maternity benefits. Factory owner Sergio Pineda López continued making payroll deductions for healthcare and social security as required by law, but failed to deposit the money with the government programs.
The Covid-19 pandemic, which temporarily shuttered non-essential businesses like Industrias Florenzi, made conditions worse and complaints to the ministry of labor didn’t go anywhere, Ramirez said. By the time the factory permanently closed its doors in July 2020, its 207 workers didn’t even have clean drinking water. Getting let go was worse, however. Labor campaigners estimate that Industrias Florenzi owed its employees $1.3 million in unpaid wages and severance, which Ramirez said López refused to pay in contravention of Salvadoran law, instead offering workers a beat-up sewing machine each.
“We didn’t think this was good enough because the sewing machines were not in very good condition,” she said. “We said, if you pay us 50 percent of what is owed and a sewing machine, then that’s O.K. But they didn’t want to pay any money. There wasn’t much to negotiate.” In a plot twist worthy of Meredith Grey and her fellow TV doctors, López later passed away, leaving union leaders to deal with his son instead.
The circumstances left workers like Ramirez in great distress. At 43, she was unlikely to get rehired by another factory, since younger labor is preferred. She couldn’t afford the payments on her house or address the health issues that long dogged her. She also struggled to care for her elderly father.
For the next eight months, Ramirez and her colleagues protested outside the facility, forming a barricade to prevent the owners from removing—and then selling off—any remaining equipment. They guarded the property in shifts, sleeping on pieces of cardboard with plastic coverings at night. Some of them went on hunger strikes. Slowly, hopes fell as they exhausted one channel after another.
Things took a turn after labor organizations such as the Clean Clothes Campaign, Maquila Solidarity Network and the Worker Rights Consortium, along with the #PayYourWorkers campaign, picked up the cause. They carried the workers’ pleas not only to Barco, whose exit they believed catalyzed the factory’s closure, but also the Walt Disney Company, which owns ABC and the license to “Grey’s Anatomy.” Before long, a pressure campaign through social media was in full swing. In September, National Nurses United, the largest organization of registered nurses in the United States tweeted at Barco and Disney to proclaim that “We don’t want wage theft to stain our scrubs.”
“Compared with similar cases that we’ve worked on, it was a very small number of workers and a large amount of money, but that was because many of these workers had worked there for as much as 20 years,” Tara Mathur, field director for the Americas at the Washington, D.C.-based think tank, told Sourcing Journal. “So if you think about it like that, it was like their life savings were deposited in this job.”
Mathur thinks it was Disney’s instant name recognition and the potential damage to a multi-billion-dollar brand that ultimately led Barco to dispense a $1 million “humanitarian contribution” to the former Industrias Florenzi workers in December, two days before Christmas. While the sum falls short of the full amount Ramirez and her co-workers were owed, it provides roughly $5,000 of back pay and severance to each of the factory’s erstwhile employees, the equivalent of roughly 14 months’ worth of pay at El Salvador’s current minimum wage for garment manufacturing.
It’s unclear if Disney contributed any money, which the Worker Rights Consortium, in partnership with ORMUSA (Organization of Salvadoran Women for Peace), a local women’s nonprofit, disbursed to workers. Barco Uniforms declined to comment and Disney, which paid into another wage-loss case involving Burmese migrant workers in Thailand in December 2020, did not respond to a request for a statement. The Salvadorian courts are also working through the case: López’s son could face criminal charges and the factory could be sold and its contents liquidated to pay workers the remainder of what they’re owed.
But Ramirez is already ecstatic. The compensation has allowed her to pay off some debts and see a doctor. She and some of her former co-workers are planning to pool a portion of their money to start a workers’ cooperative that doesn’t discriminate against women over 40. It would also “be a dream,” as part of the restitution that’s forthcoming, for them to take possession of the now-abandoned factory to house the cooperative.
“The best way for us to keep working is to invest in our own initiative,” she said. “We really hope to have an old age that is more dignified.”
Still, the outcome of the Industrias Florenzi case, though hard-won, isn’t typical, Mathur said. The coronavirus crisis has escalated wage-theft incidents across the garment industry, and most workers are unlikely to find redress despite making clothes for equally boldface names.
In Thailand, for instance, nearly 1,400 workers are still fighting for money they’re legally owed after Brilliant Alliance Thai Global, which made intimate apparel for Ann Taylor owner Ascena Group, Lane Bryant, Torrid and Victoria’s Secret, boarded up its facility in Samut Prakan province last March. Union leaders and workers said they received no warning, going against Thai labor law, which requires employers to provide a month’s notice and fulfill all outstanding financial commitments.
Over in Indonesia, 2,000 former Jaba Garmindo employees, who sewed clothing from Uniqlo and S.Oliver, have been waiting for $5.5 million in outstanding severance payments since their factories “closed down overnight” in 2015. Both brands, which withdrew their business shortly before the shutdowns, have denied responsibility for the missing wages.
Factory closures aside, resistance from suppliers against government-mandated minimum-wage hikes has also climbed. In the southern Indian state of Karnataka, where brands such as H&M and Nike source goods, for instance, an estimated 400,000 garment workers haven’t received their wage increases since April 2020. A similar story is unfolding in the Pakistani province of Sindh, where factory owners are pushing back against a 40 percent increase in the minimum wage.
Many governments in the global South lack the resources to police and enforce labor laws, Mathur noted. Neither is it an efficient approach for groups like the Worker Rights Consortium to chase after unpaid wages and owed severance on a case-by-case basis. Brands and retailers, she added, need to be “more actively monitoring compliance with the law and their codes of conduct.”
The Worker Rights Consortium is one of more than 200 organizations calling for brands and retailers to establish a legally binding severance guarantee fund that would cost signatories less than 10 cents for every T-shirt they sell. The money could then be made available when factories fail to pay severance to a large number of workers.
“The language of their codes of conduct is good; the problem is that brands don’t take all of the steps to ensure compliance, and they’re not legally binding,” Mathur said. “It’s good that Barco did what it did, but other brands need to take the opposite path and sign into a guarantee fund so that workers are not in the situation where they need to have a hunger strike.”