Nearshore Americas

US Unsatisfied with Mexico’s Labor Probe into Atento; Calls for USMCA Panel

Atento, one of the largest call center operators in Latin America, finds itself in the middle of a labor dispute between Mexico and the US.

The US Trade Representative (USTR) requested a review panel under the US- Mexico-Canada Agreement (USMCA) to determine if Atento violated the labor rights of its workers in one of its call centers in the Mexican state of Hidalgo.

The request follows a probe by Mexico’s Labor Ministry (STPS) into alleged union-busting activities by Atento. This probe was launched following a request by US trade authorities in January of this year.

Mexican labor officials concluded their investigation in late March and communicated that, although they did determine that Atento incurred in “certain actions that could have constituted a denial of said [labor] rights”, the company had done enough to remedy the damage.

The USTR disagreed, though, stating that further action should be taken in the light of the seriousness of the accusations.

“In seventeen RRM [Rapid Response Mechanism] cases to date, the United States and Mexico have been able to cooperate to successfully address labor rights violations at the Mexican facilities in question. We were not able to do so in this matter, however,” stated the USTR in a press release.

“Pursuing a panel in this case indicates the seriousness of the issues involved,” stated Thea Lee, Deputy Undersecretary for International Labor Affairs. ” We welcome working with Mexico to resolve this dispute and provide remedy to Atento’s call center workers.”

Labor rights are one of the more novel and relevant points written into the USMCA. Its “Rapid Response Mechanism” allows for a relatively quick and painless route to resolve labor disputes that can grow into bigger, international clashes. A review panel is one the last steps before the issue explodes into a traditional trade dispute.

The Rapid Response Mechanism has been used 19 times since the USMCA was activated in July of 2020. The parties involved were able to come to an agreement in most of the cases, and almost all of them happened in manufacturing facilities. Atento’s marks only the second instance in which a review panel has been called for and the only case involving a company in the services sector.

Problemas in the office

On December 18, 2023, Mexico’s main union for telecom workers –known as STRM– issued a formal complaint under the USMCA Rapid Response Mechanism, alleging that management at one of Atento’s delivery centers in the state of Hidalgo denied workers the right to choose which union would represent them as a collective.

A year before, Atento’s workers in Hidalgo claimed that management had harassed and unjustly fired a group of employees following the ratification process of a collective bargaining agreement. According to the workers, the company retaliated after they refused to ratify a protection agreement from a specific union, barring them for forming a union of their own.

US trade authorities probed the facility. In January 2024, they claim to have found “egregious employer conduct”, specifically “retaliation against workers for their union activities and interference with union organizing.”

Atento (of Spanish origin) is one of the largest call center operators in the nearshore region. It’s been in Mexico since 2001, becoming one of the major employers in the country’s contact center industry. The company boasts nearly 20,000 employees spread across 15 delivery centers nationwide.

Their clientele spans various industries, including telecom, financial services, insurance, healthcare and retail, plus a select group of government agencies. It’s been reported that the Hidalgo facility provided service in great part to Spanish banking giant BBVA.

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Mexico has a long and troubled history with union activity. The USMCA and a set of national reforms seek to transform Mexico’s labor landscape by eliminating toxic practices by employers.

The country has a long way to go still, but a series of regulatory changes over the past six years and transnational labor cases such as Atento’s point to Mexican authorities being gradually pushed towards stricter rules and a more vigilant stance in regards to labor rights.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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