Rubie's: Protection Contract System Closes Plant; Mexican Workers Lose

Despite enormous pressure from Mattel, Inc on its licensee Rubie's Costume Company to negotiate a resolution at its plant in Mexico, Rubie's did not do so, prompting Mattel to carry through on its threat to terminate all its business with the U.S.-based costume maker. The Mexico plant was expected to close in March.

Rubie's fired most of its workforce at its' plant in Hidalgo in April 2005 when workers formed a union to protest poor working conditions, failure to pay overtime, and the illegal use of underage workers. The factory had earlier been producing costumes under the Barbie label, through a licensing arrangement with Mattel. The allegations of child labor and other violations prompted Mattel to intervene, telling Rubie's that it had to correct past violations and reach a resolution with the union, affiliated to the FTVO (Federacion de Trabajadores Vanguardia Obrera), whose core demands were restoring the union and honoring a collective bargaining agreement signed before the mass firings.

Instead, Rubie's declared that it already had a contract with a pre-existing union whose leaders the workers had never met. The company-backed union is affiliated to the CTM, Mexico's largest labor federation whose affiliates have frequently been accused of operating in collusion with employers and local government labor boards to block the formation of independent unions. This three-headed conspiracy, a sophisticated protection contract system, is wide-spread in Mexico, and a fundamental obstacle to the formation of independent, democratic trade unions.

Rubie's apparently did not take Mattel's threat very seriously until late in the year, continuing through December to engage in bad faith negotiations (if any at all), threatening to sue USLEAP, and denigrating the FTVO. In the end, Rubie's said it was unable to persuade the CTM to agree to the FTVO's proposal for a democratic selection process while the FTVO refused to accept a CTM plan that would have prohibited the fired FTVO workers from participating in the union election process. The lack of resolution prompted Mattel to terminate its business with Rubie's in February, 2006.

Warner Bros., which also grants licenses to Rubie's, refused numerous requests from the FTVO, USLEAP and others to take an aggressive position like Mattel.

U.S. Government Investigates Case

The FTVO, with the support of USLEAP and the Washington Office on Latin America, filed a complaint on October 14, 2005 with the Office of Trade Implementation Agreement (OTAI, formerly known as the National Administrative Office), the U.S. government agency charged with implementation of the worker rights provisions in trade agreements, including the labor side accord of the North American Free Trade Agreement (NAFTA).

In early January, OTAI announced it had accepted the complaint and began an investigation, including a field investigation to Mexico the first week of March. While the NAFTA labor accord is toothless in terms of enforcement and sanctions, the process of filing and investigating a complaint can provide a political forum to expose Mexico's worker rights violations.

Rubie's has retained a prominent U.S. law firm, Jones Day, to represent it in the OTAI proceedings and with USLEAP. In February, 2006, Jones Day provided USLEAP and the FTVO a compilation of documents that it says challenges some of the basic charges of the FTVO complaint. The FTVO is reviewing them and will prepare a response.

Rubie's Campaign Background
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