On February 17, the FLA distributed a document entitled “Issues and Comments on the Designated Supplier Program (DSP) Proposal.” Rather than presenting an honest critique of the DSP or raising legitimate questions to further discussion of this policy, the FLA’s document is based on numerous blatant misrepresentations of the DSP and other public materials on the campaign. We can only conclude that the purpose of these FLA materials was to intentionally mislead the university community and undermine the growing support for the DSP on college campuses. These “issues and comments” are nothing less than a full-fledged attack on the DSP.

USAS welcomes honest debate with the FLA and its member corporations over the merits of the DSP. When the FLA issued us a series of questions in November, we provided substantive responses in a good faith effort to promote open dialogue. But the FLA has effectively turned down our offer of open debate and dialogue, choosing instead to ignore the information we have provided and repeatedly make inaccurate claims against our policy proposal. Until the FLA is willing to play fair, we are left with no choice but to expose their dishonest attacks in order to ensure fair consideration of the DSP in the university community.

The Truth: The memo to which the FLA refers is quite clear in its explanation that the assumption in question is one of three findings underlying the opinion. Thus, even if universities were found to be competitors in this regard (evidence of which we have yet to see from the FLA) the conclusion that the DSP does not conflict with U.S. antitrust law would not be any different.

The legal opinion letter in question was written for the WRC by Donald Baker. Baker is a former Assistant Attorney General in charge of the Antitrust Division at the U.S. Department of Justice. The memo lays out 20 pages of analysis and concludes that the program does not conflict with antitrust law, nor is there any significant likelihood of a successful suit being brought against a university for adopting the DSP. Does the FLA really think that universities are naïve enough to take the FLA’s word against that of such a highly credentialed antitrust lawyer?

Finally, Baker has written a follow-up letter for the WRC where he explains the competition issue, this can be found HERE.

The Truth: It has been made very clear, in a variety of publicly-available documents, including those addressed directly to the FLA, that the DSP intends to include factories in China and other countries where freedom of association is restricted by law.

The FLA quotes from the DSP itself in the opening sentence of their commentary on this issue, noting that “the proposal requires that in order to be designated, a factory’s employees must be represented by a legitimate, representative labor union or other representative employee body.” It is unclear, then, why the FLA chose to ignore the language on “other representative employee body” and claim that factories in countries like China may not qualify because workers there are not permitted to freely organize unions.

As the FLA knows, workers in China can form committees that can bargain collectively. Both USAS’s FAQ on the DSP and our response to the FLA’s questions of November 9 discuss the designation of Chinese factories. The FLA must therefore have knowingly lied about the requirements of the DSP in order to create the false impression that the DSP seeks to exclude factories and workers from particular countries.

The Truth: We can’t find any mention in the DSP or the WRC’s “Sample Living Wage Estimates” of a requirement that living wages be calculated each month. The FLA uses this misinformation as a basis for its claims that the WRC lacks the capacity to calculate living wages, falsely maintaining that the WRC is proposing to re-calculate its figures every 30 days.

It has been a popular strategy of apparel brands, who do not want to be forced to pay higher wages, to argue that the calculation of living wage levels is too complicated and therefore logistically impossible. The fact that the FLA had to fabricate information in order to make this point is telling.

The Truth: The DSP is quite clear that “wages at each factory will be set through contract negotiation between worker representatives and management.” The DSP requires that workers at designated supplier factories be represented by a legitimate labor union or other body because strong collective bargaining is the only way to eliminate sweatshop abuses. The DSP is obviously designed to support and strengthen the labor relations process, not disempower it.

The only disempowerment that will result from the DSP is that licensees will no longer have the power to dictate prices to their suppliers that are so low that it is impossible for workers to achieve a living wage and other decent working standards. Is this what the FLA means by disempowering the labor relations process?

The Truth: The FLA is again ignoring publicly available information on the DSP. USAS has repeatedly responded to this critique by reminding the public that the program permits licensees to work to bring factories within their existing supplier networks up to the DSP standard. Since licensees are welcome to use their existing suppliers, there is no basis for concern about inadequate capacity, in terms of volume, quality or diversity of styles.

We challenge the FLA to actually engage USAS on this issue by explaining why they believe it will be impossible for licensees to bring factories up to the standard, rather than continuing to make baseless claims that there is no way of knowing whether there will be sufficient factories to make licensees’ products..

The Truth: This claim is completely fabricated. Nowhere in the DSP is there mention of who will pay for the increased costs associated with designated factories, although it does mention that licensees are encouraged to make up these costs by helping factories become more efficient. USAS' extensive list of Frequently Asked Questions on the DSP mentions that licensees may choose to pass the modest cost increases on to consumers or absorb the costs themselves.

The Truth: The Truth: The WRC definitely does not state that the DSP will result in 10-12% increases in retail prices. In its comments, the FLA quotes a WRC document entitled “The Impact of Substantial Labor Cost Increases on Apparel Retail Prices.” Just one paragraph below the section quoted by the FLA, this document states clearly that the anticipated price increase at the retail level will be between 1 and 6%.

There is no question that the FLA is familiar with this paper, because it is quoted by the author of the FLA’s comments. Yet the FLA ignores the paper’s conclusion and instead misquotes an unrelated memo by the antitrust attorney Donald Baker, which refers to 10-12% increases in terms of the price paid by licensees to factories, consistent with the WRC’s analysis. This type of blatant distortion of written material should be extremely concerning to universities who entrust the FLA with evaluating and reporting on conditions in factories making college apparel.