$4 Million in Severance Theft Averted in Honduras

Please find here a case brief on the WRC’s recent intervention with a collegiate factory in Honduras—averting the theft of an estimated $4 million in severance and other legally due compensation from workers. The basic facts are as follows:

• In November 2024, Stretchline Central America announced to its roughly 300 workers that it would soon close—without paying an estimated $4 million in legally mandated severance.
   
• The WRC pressed the factory to honor its obligations under Honduran law and university codes. Stretchline Central America reversed course and paid workers in full—providing, on average, more than $13,000 per employee, nearly 2.5 years’ wages for Honduran garment workers.
   
• Workers had also contacted Students for International Labor Solidarity (SILS), a student group active at a number of US universities, and the Canada-based Maquila Solidarity Network (MSN). Both also contacted Stretchline Central America to protest its planned denial of severance—which also likely led the factory to fulfill its obligations to workers.
   
• Stretchline Central America supplied elasticated fabric to factories disclosed as collegiate apparel suppliers by a long list of licensees: adidas, Campus Ink, Champion, Fanatics, Garb, Gear for Sports, Gorilla Marketing, Graphic Cow, Knights Apparel, Manhattan Stitching, New Agenda, Nike, Peter Millar, Rhone Apparel, and Vineyard Vines.
   
• University labor codes apply to factories, like Stretchline Central America, that produce materials used in collegiate apparel, as well as those making finished goods. By convincing Stretchline Central America to pay workers in full, without having to involve licensees, the WRC (with help from SILS and MSN) averted code violations that licensees otherwise would have had to remedy. 

Because workers received full payment of what they were owed—which amounted to their life’s savings—the result achieved compliance with university standards. Just as importantly, it means workers and their families face much brighter prospects for the future.

If you have any questions about this case, please do not hesitate to ask.