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DE RUEHTG #0158/01 0692041
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FM AMEMBASSY TEGUCIGALPA
TO RUEHC/SECSTATE WASHDC PRIORITY 9357
INFO RUEHZA/WHA CENTRAL AMERICAN COLLECTIVE
RUEHC/DEPT OF LABOR WASHDC
RUEIAYF/ATO LATIN AMERICA
RUEATRS/DEPT OF TREASURY WASHDC
RUEAHND/CDRJTFB SOTO CANO HO
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RUMIAAA/CDR USSOUTHCOM MIAMI FL
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RUEHLMC/MILLENNIUM CHALLENGE CORP WASHINGTON DC 0902
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UNCLAS SECTION 01 OF 02 TEGUCIGALPA 000158 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT OF STATE FOR: MMITTLEHAUSER, DEPARTMENT OF LABOR 
FOR: PAULA CHURCH 
 
E.O. 12958: N/A 
TAGS: EAID ELAB ETRD HO KDEM ECON
SUBJECT: CONTENTIOUS CLOSING OF JERZEES DE HONDURAS MAQUILA 
 
¶1. (U) SUMMARY:  Jerzees de Honduras (JDH), a textile factory 
located north of San Pedro Sula in Choloma closed in January 
following a labor dispute.  The Fair Labor Association (FLA) 
has determined that while plant management did violate the 
workers, freedom of association, the decision to close the 
plant was based on market demand.  Since January, a union 
representative has received multiple death threats, 13 
U.S.-based Universities have cut all ties with U.S. owners of 
JDH (the Russell Corporation) and the Russell Corporation has 
promised to help its ex-workers find new jobs.   END SUMMARY. 
 
JERZESS DE HONDURAS MAQUILA PLANT 
--------------------------------- 
¶2. (U) JDH, which is owned by the Russell Corporation (a 
subsidiary of Fruit of the Loom which is owned by Omaha-based 
Berkshire Hathaway Inc.), closed its doors on January 31 
following over five months of dispute between management and 
the union at the plant.  The JDH plant employed 1,800 
workers, but from October 2008 to January 31 2009 JDH had 
been operating intermittently.  These sporadic operations 
began after management decided to end all collective 
bargaining negotiations with the plant,s union, 
SitraJerzees, in October 2008.  SitraJerzees represented 750 
workers at the plant and was granted juridical status by the 
MOL in July 2008 after months of delay. 
 
THREATS OF VIOLENCE 
------------------- 
¶3. (SBU) In January 2009, the General Workers Confederation 
(CGT) representative representing SitraJerzees, Evangelina 
Argueta, claims she began receiving death threats.  She also 
alleged that she was followed by men on motorcycles, had her 
car examined by masked men while she shopped, and was 
followed to and from work by cars with blacked out windows - 
all acts which she found extremely intimidating.  The 
Workers, Rights Consortium (WRC) and the Solidarity Center 
filed a Request for Precautionary Measures with the 
Inter-American Commission on Human Rights in the hope that 
the GOH would be forced to provide protection for Argueta. 
The U.S. Embassy notified the Ministry of Security of our 
concern for Argueta. 
 
SITRAJERZEEZ ALLEGATIONS AGAINST MANAGEMENT 
------------------------------------------- 
¶4. (SBU) SitraJerzees has accused JDH management of spreading 
rumors of an imminent closing due to the union,s existence, 
illegally barring Argueta from entering the factory, tasking 
employees with making lists of unionized and non-unionized 
workers at the plant, and threatening the loss of benefits or 
preferred work schedules for suspected union members.  In 
October 2008, when JDH announced it would be closing the 
factory in March 2009, workers claim they were told 
informally that the unionization was to blame while 
management insisted publicly that the global financial crisis 
was to blame. 
 
¶5. (SBU) Laboff met and discussed the case with 
SitraJerzees,s executive board, Argueta, the WRC, the 
AFL-CIO,s Solidarity Center, the Honduran Manufacturing 
Association (AHM) and JDH management between August 2008 thru 
March 2009.  JDH insisted that the closing of the plant was 
solely related to deteriorating demand in the U.S. market. 
JDH also denied claims that the items previously produced at 
JDH would be subcontracted out to other non-union operations. 
 
¶6. (SBU) Throughout December 2008 and January 2009, 
SitraJerzees tried to pressure the owners of JDH into 
reopening the factory.  On February 20, SitraJerzees and 
Argueta met with executives from the Russell Corporation,s 
headquarters, local JDH management and the president of 
FUNDARSE, a Honduran social responsibility organization, to 
discuss the case.  There were no discussions of reopening the 
 
TEGUCIGALP 00000158  002 OF 002 
 
 
factory.  Argueta subsequently accused JDH management of 
distributing a "blacklist" of union leaders to other textiles 
plants throughout the region. 
 
¶7. (U) In February, with the support of the Solidarity 
Center, members of SitraJerzees visited college campuses 
throughout the United States to seek support against the 
Russell Corporation.  Since then, over 13 U.S. universities 
(including Wisconsin, Michigan, Harvard and Georgetown) have 
cut all ties with the Russell Corporation. The FLA has also 
commissioned three independent investigations to review the 
plant,s closing.  Based on these investigations, the FLA 
concluded that while plant management did violate the 
workers, freedom of association, the decision to close the 
plant was based on market demand. 
 
¶8. (U) The FLA determination has urged the Russell 
Corporation to meet with all key stakeholders, publicly 
acknowledge that workers, rights were violated, assist 
former JDH workers to find new jobs at Fruit of the Loom 
factories in San Pedro Sula area, provide financial 
compensation to all JDH workers, speak out against any 
blacklisting of former JDH workers, discipline those found to 
be violating workers, rights and strengthen formal internal 
grievance systems in its factories.  In response to the 
FLA,s recommendations and meetings with SitraJerzees, JDH 
has since offered to open a help office for ex-employees 
offering emergency medical services, transportation services, 
job training and job placement assistance. 
 
BACKGROUND: UNIONS, EMPLOYERS AND THE LABOR CODE 
--------------------------------------------- --- 
¶9. (U) The Honduran labor code was adopted in 1959 after a 
series of strikes against the Standard Fruit Company and the 
Tela Railroad Company.  Currently, despite a decline in union 
density (now at 9 percent of the economically active 
population), unions continue to exert political pressure, a 
recent success being the increase in the minimum wage by 60 
percent for urban workers and 18 percent for rural workers. 
Many workers report that they find it difficult to unionize 
in Honduras due to the delay it takes for the unions to 
receive legal status from the Ministry of Labor (MOL).  The 
FLA and the Solidarity Center report that many employers in 
the textile industry have used this delay period to fire all 
employees determined to be union sympathizers, turn non-union 
workers against the unions, and/or threaten plant closings. 
Lack of enforcement of the labor code by the MOL, coupled 
with an inefficient labor court system, leaves fired workers 
with little legal recourse.  Union leaders claim that they 
have been subsequently "blacklisted" and informally barred 
from working in the textile industry. 
 
¶10. (SBU) COMMENT: The case illustrates a disconnect between 
corporate headquarters, which understand the importance of 
respect for workers' rights and local management, which does 
not want to allow a union onto its floor.  In the medium 
term, however, the contracting world economy is likely to 
mean more job losses, in plants with and without labor 
disputes. END COMMENT. 
LLORENS