To: Merida Industry Co., Ltd.
Merida, Use Your Leverage to Ensure Your Shareholding Specialized Pays Its Workers
We write on behalf of the former employees from the APS garment factory in El Salvador. APS supplied for Specialized Bicycle Components, of which you are a 35% shareholder, and a key shareholder since 2001.
In 2022, the APS factory shut down and terminated the employment of 831 workers. Under El Salvador’s Labour Code, when a worker is terminated without fault of their own, their employer is obligated to pay them severance, in the amount of 30 days’ base wages for each year of service plus compensation for all unused vacation days and the legally required year-end bonus, prorated based on the day of the year when the termination occurs. The Salvadoran Ministry of Labour calculated that the total amount that is legally owed to these workers for unpaid wages, severance, and terminal benefits was approximately US$2 million.
With the help of Worker Rights Consortium (WRC), buyers from the APS factory, Gildan, Kellwood and Alwants have paid US$1.34 million, or 67% of the compensation. However, your shareholding company Specialized did not pay at all. WRC, APS worker representatives, Green America, Clean Clothes Campaign (CCC), and others have tried to engage with Specialized, but the response from Specialized was minimal. Specialized even blocked the email domains of several CCC organizations which have attempted to contact them. In 2024, Specialized announced on its website that it would pay US$44,000, but the workers never received the money.
Specialized’s Code of Conduct claims that its suppliers should pay legally mandated benefits, which includes the unpaid wages, severance, and terminal benefits calculated by the Salvadoran Ministry of Labour to the former APS workers. However, Specialized has violated its own code of conduct.
We are writing to you as the key shareholder of Specialized; Specialized’s founder Mike Sinyard also referred to Merida as a “pivotal” investor. Your Code of Conduct states that your “business practices and management are conducted with integrity and honesty, strictly in accordance with relevant laws and regulations,” and that you “always comply with legal regulations in each country and follow relevant international principles in the bike industry.” You also state that you “commit to paying all employees fairly and in accordance with the law.”
In addition, at the upcoming Taipei Cycle Show 2025, the Bicycling Alliance for Sustainability (BAS), which you jointly established, will be releasing the ‘Human Rights Code of Conduct’, which is intended to “protect labour rights in the industry”, as well as to ensure that all workers are “treated fairly, equally, and with dignity.”
As such, we are writing to you to ask you to use your leverage and exercise your corporate responsibility to ensure that the company of which you own 35% shareholdings abide by both its and your code of conduct, to pay the outstanding compensation to the APS workers, as legally mandated under El Salvador’s law.
Merida’s pledge to uphold integrity as well as to complying with local legal regulations in the countries you operate is admirable, and gives us hope. As such, we call on Merida to take action and uphold your code of conduct, and require your shareholding company Specialized to engage with the WRC, which helped arrange an efficient and secure process for handling the distributions of the payments from the other brands to APS workers, so that Specialized performs its responsibility as a buyer at the APS factory and pays the workers, as the other buyers have already done so.
We look forward to a favourable response from you.
Yours respectfully,
Clean Clothes Campaign (on behalf of the former APS workers)
