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Garment brands can safely move forward on collectively raising wages in factories within the bounds of competition law. That is clear from a unique ´Dos and Don’ts´ document that FWF published on Tuesday.
Calls for collaboration between brands on increasing prices at their suppliers often set off alarm bells with garment brands´ legal teams. FWF called upon the expertise of competition specialists at leading law firm Arnold & Porter to help push past this major obstacle to action on living wages.
Arnold & Porter show that as long as garment brands take some key precautions, their efforts to raise wages collectively do not present a serious risk with regard to competition law.
Rules of the game
FWF published two documents for its member brands to explain the legal considerations and outline the Dos and Don’ts when working together to raise wages in factories. ‘This legal guidance represents a huge step forward for all of us working on living wages for garment workers,’ explains Anne Lally, FWF’s advisor on living wages on the FWF Living Wage Portal. ‘It ensures that we now know the rules of the game. And what’s clear is that there is a lot of space to maneuver.’
Essentially, garment brands that source from the same factory would need to collaborate to raise wages. ‘But if a living wage project involves any discussion of financial details – even if the total price paid to the factory by each brand is never mentioned – it is unlikely brands will participate’, says FWF director Erica van Doorn. ‘We hope to turn this around by clearly guiding them in what they can and can´t mention while discussing production costs.’