Gildan Activewear (PPAI 250187, Platinum), PPAI 100’s No. 5 supplier, is suing two longtime Haitian sewing contractors, alleging that repeated production disruptions and contract violations justified its decision to end the business relationships.

The Montreal-based apparel giant filed the lawsuit in North Carolina in July against Palm Apparel S.A. and Sewing International S.A. The case centers on sewing agreements dating back to 2007, under which the Haitian companies assembled Gildan products at plants in Port-au-Prince. Finished goods were shipped to Gildan’s affiliated manufacturing and distribution hub in Eden, North Carolina, for warehousing and distribution to U.S. customers.

According to the complaint, Gildan says worsening conditions in Haiti led to repeated factory closures, work stoppages and security-related interruptions that prevented the contractors from meeting their obligations.


Don’t Miss A Thing: SUBSCRIBE To PPAI Newslink

The company also alleges several additional breaches, including quality noncompliance, failure to follow Haitian labor laws, violations of Gildan’s Code of Conduct, improper employee contribution deductions and failure to pay suppliers on time.

  • In what may be a related situation, the factories failed to pay severance to 2,500 workers, as required under Haitian law, when they closed in June 2025, according to Worker Rights Consortium.
  • Given that the factories produced collegiate licensed apparel, the payment of workers’ severance was also a requirement under university labor standards.
  • WRC engaged with Gildan, which was the factories’ sole buyer, and the supplier committed to ensure full payment of the legally due severance – $2.5 million – to all the former workers.


Denying Liability

Gildan claims it issued written notice of termination around May 27, 2025, arguing that the contractors’ alleged breaches gave it the right to immediately terminate the agreements.

  • The company also claims it had the contractual right to terminate without cause after giving advance notice.


The defendants, according to Gildan, have demanded damages tied to the termination. Gildan denies liability and is asking the court to declare that the termination was proper and lawful, that it owes the contractors no damages and that their demands have no legal basis.

The complaint includes two claims: breach of contract and declaratory judgment. Gildan says it suffered damages believed to exceed $1 million and is seeking actual damages, attorneys’ fees, costs, interest and other relief.


The American Apparel & Footwear Association, a “Superfriend” of PPAI, has consistently urged Congress and the Trump administration to renew both HOPE and HELP acts as well as the African Growth and Opportunity Act, offering testimony before the Office of the U.S. Trade Representative on AGOA’s renewal in July.