Case Study

Now that you've read about some of the positive and negative impacts of businesses, complete this activity on whether Nike was responsible for compensating Honduran factory workers. Consider how Nike impacted society, and determine whether you think their impact was positive or negative.


Was Nike Responsible for Compensating Honduran Factory Workers?

Honduras is an impoverished country in which 70% of its residents live in poverty. Jobs are scarce, particularly those that pay decent wages along with benefits, such as health care. It is not surprising then that workers at two Honduran factories making products for U.S. companies, including Nike, were extremely upset when their factories closed down and they lost their jobs. Even worse, the owners of the factories refused to pay the 1,800 workers $2 million in severance pay and other benefits due to them by law. Although the factory owners had been paid in full by Nike for the apparel they produced, the workers argued that Nike should be responsible for paying the $2 million in severance that the factory owners had not received.

Nike's original response was to sympathize with the workers but refuse to pay the workers the severance pay they had not received from the factory owners. This stance did not settle well with student groups around the country who rallied in support of the unpaid workers. In the end Nike gave into pressure from the students and paid $1.5 million to a relief fund for the employees. In addition, the company said it would provide vocational training and health coverage for the unemployed workers.

To learn more about this case, read the following:

  • Nike Press Release: Nike Statement Regarding Vision Tex and Hugger (April 20, 2010)
  • Working in These Times: Honduran Workers Speak Out Against Nike's Labor Violations (April 21, 2010)
  • New York Times: Pressured, Nike to Help Workers in Honduras (July 26, 2010)
  • Time Magazine: Just Pay It: Nike Creates Fund for Honduran Workers (July 27, 2010),8816,2006646,00.html
  • Nike Press Release: Nike and CGT Statement (July 26, 2010)

Answer the following questions:

  1. Do you think Nike was responsible for compensating the workers in Honduras? Why did it change its stance?
  2. Did the students, universities, and workers themselves have all of the information they needed before becoming involved in the protest? Are their facts accurate?
  3. Should students be activists? Do companies such as Nike ignore them at their own peril?

Creative Commons License This text was adapted by Saylor Academy under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensor.

Last modified: Tuesday, May 3, 2022, 6:48 PM