Former workers from the Style Avenue factory in Ilopango, El Salvador are still waiting for unpaid severance and wages owed to them since the factory closed nine months ago, as well as outstanding health and pension contributions.

In February of 2023, one of the factory owners was jailed for failing to make legally mandated contributions for healthcare and pensions, and in May 2023, the factory officially closed. The Salvadoran Ministry of Labour estimates that the 244 former workers are owed a total of US$1.8 million.

The factory’s main buyer was Outerstuff, which had children’s clothing produced in the factory under license for Disney, as well as numerous US universities and professional sports leagues like the National Football League (NFL) and the National Basketball Association (NBA).

To date, Outerstuff has offered to pay only a little over 50% of the monies owed to the former workers. The unions at the factory are demanding that the workers receive the full amount that is legally owed to them.

For workers in the low wage garment sector, it is often impossible to save money. Severance payments are legally required and provide a lifeline when workers are left unemployed after factories close. According to the Worker Rights Consortium (WRC), the majority of the former workers from Style Avenue are owed 18 months of wages. 

One former worker told The Guardian she had worked at the factory for 12 years. “I was owed $7,700 in total… I have debts to pay off and since I haven’t been able to make payments, the interest is accumulating. We have had to borrow money for electricity and water. I haven’t been able to buy clothing or shoes for my children.”

For over a decade before the closure, in response to complaints from local unions, MSN and other labour rights and monitoring organizations had documented a long history of labour rights violations at the Style Avenue factory. Outerstuff was made aware of the violations, and pressured their supplier to remedy some of them. Violations included wage theft, abusive treatment, violations of the right to freedom of association, and unsafe working conditions.

Despite the long history of labour rights violations, Outerstuff and its licensees continued to source from the factory even when they knew the factory would likely close and fail to pay workers the legally required severance and benefits.

Following the closure, MSN has worked with union partners at the factory and other international labour organizations to advocate for the workers’ right to full compensation. In communications with Outerstuff and Disney, MSN has called on the brands to live up to their responsibilities and ensure the workers are paid the full amount that they are legally owed.

Scott Nova of the WRC told The Guardian, “In addition to Outerstuff, you have Disney with annual revenue of $89bn, the NFL and its teams with $18bn, and the NBA with $11bn. With combined revenue of $120bn, you would think these brands could scrape together $1.8m to pay the workers who sewed their onesies….”

According to Marta Zaldaña, General Secretary of FEASIES, “Our union and the other unions representing workers at the factory are united in our rejection of Outerstuff’s totally inadequate offer, and we are calling on that company and all the brands whose products were made in the factory to contribute to fully compensating the workers for what they have been denied.”

For more information

• Update - Since this story was published, Outerstuff has committed to full remediation at Style Ave, March 2024 (WRC)
• Style Avenue, El Salvador - Factory investigation, December 2023 (PDF, WRC)
• Garment workers have lost out on $4bn of severance pay, says rights group  (The Guardian)