"Contract Cancellation and the UN Guiding Principles on Business and Human Rights: Responsible Contracting Project’s Friend of Court Brief Before the U.S. Ninth Circuit Court of Appeals ", Aug 2024

“The case arose from the cancellation in 2023 by a well-known men’s garment retailer, of nearly $7 million worth of purchase orders it had placed with its supplier, purportedly out of concern that North Korean forced labor was used at some point along the supply chain of supplier’s parent company. According to the supplier’s legal complaint, the garment retailer cancelled the purchase orders abruptly, ignoring evidence presented by the supplier that there was in fact no forced labor anywhere in its supply chain. The supplier alleged that the garment retailer had cancelled the purchase orders unfairly and in bad faith.

In their brief, RCP et al pointed out that the authoritative UN Guiding Principles on Business and Human Rights (Guiding Principles) were incorporated in the apparel retailer’s human rights policy commitment and supply chain contract. Under the Guiding Principles, a buyer must weigh the human rights impact on supply chain workers of cancellation before considering whether to cancel a supply chain contract, how those impacts can be mitigated, and what leverage the buyer can use, even where a buyer has the contractual right to cancel.

The brief notes that during the COVID 19 pandemic, the abrupt cancellation of supply chain contracts by Western buyers exercising their contractual force majeure rights led to the loss of jobs of droves of vulnerable supply chain workers, many of whom had no savings, no pension, or access to a social safety net... The brief therefore urges the Ninth Circuit to take the garment brand’s violation of the Guiding Principles into account when evaluating supplier’s claim that buyer cancelled the purchase orders in bad faith."

Amicus Curiae by the Responsible Contracting Project, 29 July 2024