Introduction

On 26 August 2024, Mexican and US labor and trade authorities settled a complaint filed by ten Volkswagen Mexico workers under the United States-Mexico-Canada Agreement (usmca) Labor Rapid Response Mechanism (lrrm). Filed with the US Trade Representative (ustr) on 25 April 2024, the complaint alleged violations of labor rights under Article 31-A.4.2 of the usmca. The complaint was filed against both Volkswagen Mexico and the independent vw union sitiavw, alleging that both the employer and the union had denied workers’ rights to freedom of association and protection from unlawful dismissal. As reported in La Economista, what was startling about the case was that a union famous for its independence for more than fifty years had been charged with impeding workers’ right to freedom of association.¹ At the core of the case was the application of an unwritten rule that vw would dismiss incumbent union leaders from employment after they lost to a different slate of candidates—and whether this unwritten rule violated the labor rights of union leaders and members.

vw Mexico, el Vochito, and sitiavw

2024 marks the seventieth anniversary of the presence of the vw Beetle in Mexico. A beloved national icon nicknamed el Vochito, the vw Beetle was first sold in Mexico in 1954, assembled from parts made in Germany. The last Vochito rolled off the assembly line in 2003—years after Volkswagen ceased production of the famous Beetle in other parts of the world—giving way to the “New Beetle” destined for export to the United States. This was a consequence of vw’s 1992 adaptation to export incentives under the North American Free Trade Agreement (nafta).²

The history of el Vochito is entwined with industrialization of the Mexican economy. During Mexico’s Import Substitution Industrialization era, Volkswagen invested 500 million pesos to build a factory in Cuautlancingo, Puebla, in 1967. vw paid generous wages and benefits and opened a training center in Mexico using German development funds. Workers founded sitiavw in 1972 to negotiate better wages and improved working conditions and work organizations—ousting the incumbent employer-friendly union.³

sitiavw Leadership Election in November 2023

The story behind the usmca lrrm complaint began on 30 November 2023 when a vote was held under the auspices of the Centro Federal de Conciliación y Registro Laboral (Federal Center for Labor Conciliation and Registration) to elect sitiavw union officers for the 2025–28 period.⁴ Seven slates of aspiring union leaders competed, including that of incumbent union secretary general José Hernández López. Hugo Tlalpan’s Justicia Laboral (Labor Justice) slate prevailed in the election with 27.6 percent of the vote (1,733 of 6,273 total votes cast).⁵

Tlalpan took possession of the union office on 8 January 2024 and, according to Proceso, discovered that funds and documents were missing.⁶ Per an unwritten “customs and practices” rule not included in the collective agreement between vw and sitiavw, members of the 2021–24 union leadership team were terminated from their jobs at the vw plant—ten workers in total.⁷ The customs and practices rule is at the center of the case.

Network of Women Trade Unionists File usmca lrrm Complaint

On April 25, 2024, the Red de Mujeres Sindicalistas de Mexico (rms, or Network of Women Trade Unionists of Mexico) submitted a complaint to the ustr on behalf of the terminated vw trade unionists under usmca’s lrrm. Although the majority of the terminated trade unionists were men, rms’s role as advocate reflects the organization’s initiative to supplement its advocacy and advisory services to women working in a variety of key industries by filing strategic labor cases under usmca.⁸

The ustr accepted the complaint and issued a request for review to its counterpart, the Ministry of the Economy of Mexico, on 28 May 2024. The goal was to determine whether a Denial of Rights occurred when vw intervened in workers’ union activities by coordinating with sitiavw to dismiss workers “based on their service as union representatives, affiliation with prior union administrations, candidacy in union elections, or engagement in other union activities.”⁹ At the same time, the ustr suspended US customs entry of goods produced at the vw plant in Puebla in accordance with Section 752(a) of the usmca Implementation Act.¹⁰ Mexican trade and labor authorities accepted the request for review on 11 June 2024. On 25 July, US and Mexican trade and labor authorities agreed on a plan of remediation. The two countries jointly determined that the case was resolved on 28 August. Eight terminated workers were reinstated and one received severance pay for unjustified termination as required under Mexican labor law.¹¹

Comparison of usmca lrrm with naalc

By design, the usmca lrrm differs from the North American Agreement on Labor Cooperation (naalc) petition process. One of the most often repeated criticisms about the naalc was that workers were not reinstated and did not receive legally required severance pay as the result of naalc petitions—despite being exposed to significant risk of retaliation, including blacklisting and violence, after filing a naalc petition. The response of North American labor authorities to this criticism was that the mechanism was designed to address systemic issues, not resolve individual cases. The labor petition mechanism first introduced in the naalc still exists in usmca chapter 23 on labor and post-nafta US and Canadian trade agreements—changes being made primarily to the scope and nature of labor rights covered. Chapter 23 includes stricter petition processing time frames than the naalc—though not as strict as the lrrm mechanism as reflected in vw Mexico and other lrrm cases filed in the 2021–24 period.

The vw sitiavw case reflects other differences between naalc and lrrm. First, usmca lrrm complaints are not systematically made public like those filed under the naalc. This may be due in part to the fact that lrrm cases relate to pending labor cases involving individual workers. Under naalc, workers, union representatives, labor rights advocates, and allies used the petition process to report on and draw public attention to serious, systemic worker rights violations. It can be argued that more than twenty-five years of naalc petitions laid the factual groundwork that underpinned the adoption of the lrrm in usmca. Second, usmca lrrm cases do not result in a detailed final report, which most naalc cases do—though naalc reports were written by labor officials in one nafta signatory nation about labor issues in another. No naalc case advanced beyond ministerial consultations to formal dispute resolution between the parties or resulted in a final report issued by an Evaluation Committee of Experts or an international arbitrator.¹²

The lack of a joint public report after an lrrm case is settled means that it is difficult for the public to know the legal basis for the outcome in an lrrm case. In the vw Mexico case, final press releases issued by the US and Mexican trade ministries announcing resolution of the usmca lrrm complaint differed on the legal basis for the joint resolution. On the one hand, the ustr proclaimed an unequivocal victory based on protection of the right of freedom of association. On the other, the Mexican Ministry of the Economy was more circumspect, noting that though there did not seem to be enough evidence to prove clear violation of workers’ freedom of association, violations of legal provisions prohibiting dismissal of workers not justified by specific provisions in Mexico’s Federal Labor Law were clear—meaning that dismissal for having served as a union officer and subsequently losing the election is not legally justified under Mexican law. In the United States, although retaliation for union-related activities is unlawful under the National Labor Relations Act, protection from unjustified dismissal is unavailable to the vast majority of workers under federal and state labor and employment laws.