Dive Brief:
- Victoria’s Secret is financing an $8.3 million settlement between workers in Thailand and their former employer over unpaid severance following a factory closure.
- Labor groups advocating for the 1,250 workers — who made bras for Victoria’s Secret, Lane Bryant and Torrid — say they were fired without legally mandated severance in 2021.
- According to the Worker Rights Consortium, Victoria’s Secret’s loan to the factory’s owner is “historic” and “the most any brand has ever contributed to help resolve a wage theft case.” Sycamore Partners, the private equity firm that owns Lane Bryant and Torrid, did not contribute or engage the labor groups that pushed for payment, the groups said.
Dive Insight:
Labor groups declared the settlement a victory for workers, whose struggles are often hidden in modern supply chains.
“Low-wage garment workers left destitute by injustice meted out by global supply chains is nothing new,” David Welsh, Thailand country director for the Solidarity Center, which also pushed for payment, said in a press release. “What’s new is they did not accept their fate — and won.”
Welsh added, “We also hope this represents a model for the type of domestic, governmental, international and brand engagement to resolve future cases where garment workers are left in similarly desperate straits.”
According to the group, the government of Thailand ordered the Brilliant Alliance factory to pay severance within 30 days, after the factory closed March 2021. The owner, Clover Group, told its employees that it did not have the money to pay and they should agree to wait a decade for full repayment.
The amount was the “largest theft — and now the most back pay — we’ve ever seen at an individual garment factory,” Workers Rights Coalition Executive Director Scott Nova said in a statement.
Reuters reported on Thai government records showing the total severance payments amounted to around $8.3 million and noted that it was unclear what portion of the settlement was paid via Victoria’s Secret’s financing.
In an emailed press release, a Victoria’s Secret spokesperson said that “[w]hile the workers impacted by the closure were not our employees and our merchandise was not produced in the factory at the time of the closure, we were committed to ensuring the factory owners satisfied their obligation to their workers.”
The spokesperson explained that the company had been “in active communication” with the factory owners for months to reach a resolution.
“We regret they were not ultimately in a position to conclude this matter on their own so to ensure the workers received their full severance amounts owed, Victoria’s Secret agreed to advance the severance funds to the factory owners,” the spokesperson said, adding that the company “will continue to hold ourselves and our partners accountable for the high standards we set for the fair treatment of workers.”
A spokesperson for Sycamore Partners did not immediately respond to request for comment.
