I. Introduction
In recent years, Italy’s fashion manufacturing sector has faced intensified judicial scrutiny due to persistent patterns of labour exploitation within subcontracting networks, often involving migrants, both as entrepreneurs and workers.Footnote 1 This scrutiny has culminated in a series of judicial administrations ordered in 2024–2025 by the Court of Milan against leading luxury brands and recently by the Court of Florence against a fashion retail brand, marking a significant shift in how corporate responsibility for human rights impacts is translated into practice (see Table 1). These cases offer a rare enforcement-based perspective on how Human Rights Due Diligence (HRDD) is interpreted and operationalized by courts, rather than solely designed by legislators or companies themselves. They also complement EU regulatory developments on corporate accountability, including the Corporate Sustainability Reporting Directive (CSRD),Footnote 2 the Corporate Sustainability Due Diligence Directive (CSDDD)Footnote 3 and the Forced Labour Regulation.Footnote 4
Fashion brands under judicial administration in Italy (2024–2026)
Table 1. Long description
The table consists of four columns: Brand, Court decree, Current status, and Additional note.
* Alviero Martini: Milan Court Decree Number 1 of 15 January 2024. Status: Revoked early in October 2024 following implementation of compliance and monitoring systems.
* Armani: Milan Court Decree Number 10 of 3 April 2024. Status: Revoked early in February 2025. Additional note: 3.5 million Euro fine for misleading sustainability claims by the Italian Competition Authority.
* Dior: Milan Court Decree Number 12 of 5 June 2024. Status: Revoked early in February 2025. Additional note: Investigation closed with binding commitments including enhanced supplier oversight and 2 million Euro for labor exploitation victims.
* Valentino: Milan Court Decree Number 10 of 13 May 2025. Status: Revoked early in April 2026.
* Loro Piana: Milan Court Decree of 8 July 2025. Status: Revoked early in April 2026.
* Tod’s: Request for judicial administration dismissed by the Court of Cassation in November 2025. Status: Ongoing investigation for labor exploitation and corporate liability under Legislative Decree Number 2 3 1 / 2 0 0 1. Additional note: Six-month advertising ban imposed.
* Piazza Italia: Florence Court Decree of 21 January 2026. Status: Ongoing.
The Italian experience suggests that HRDD is progressively evolving from a primarily procedural and disclosure-oriented obligation into an enforcement-driven governance mechanism capable of reshaping internal corporate structures, commercial practices and supply-chain oversight. Importantly, these cases concern domestic production within Italy, often close to the brands’ headquarters or operational offices.
This piece analyses how judicial interventions have influenced supply-chain governance in the Italian fashion industry and situates judicial administration within broader European debates on enforcement-based HRDD. It also identifies persisting gaps in the protection of migrant workers, underlining the importance of integrating Diversity, Equity and Inclusion (DE&I) considerations into HRDD frameworks.
Notably, judicial administration under Article 34, Legislative Decree No. 159/2011 (the so-called Italian Anti-Mafia Code), alongside criminal proceedings against suppliers, has created an environment in which companies are compelled to reconsider due diligence processes, audit methodologies, recruitment practices and subcontracting arrangements. Under judicial administration, a criminal court may appoint judicial administrators to supervise and guide corporate reforms when the court finds that the company’s commercial practices and inadequate controls expose it to the risk of facilitating criminal offences by third parties, including labour exploitation by suppliers and subcontractors, even in the absence of direct criminal liability of the company itself. The measure is grounded in the assessment that deficiencies in corporate organization, controls and commercial practices may have facilitated or failed to prevent unlawful conduct.
These judicial measures build on Legislative Decree No. 231/2001, which establishes corporate liability for certain offences committed ‘in the interest or to the advantage’ of the company.Footnote 5 Under this framework, companies may avoid liability if they demonstrate that they adopted and effectively implemented adequate Organizational, Management and Control Models designed to prevent the commission of relevant offences. Although Legislative Decree No. 231/2001 does not formally establish a standalone HRDD obligation, its preventive logic resembles a failure-to-prevent model, insofar as liability may depend on the adequacy of governance structures, risk assessment procedures, monitoring systems and preventive measures.
Judicial administration under Article 34 of the Anti-Mafia Code and corporate liability under Legislative Decree No. 231/2001 are distinct legal mechanisms. In the Milan fashion cases, however, both mechanisms have directed attention to the adequacy of companies’ organizational, monitoring and supply-chain governance systems in preventing labour exploitation risks. Rather than targeting isolated unlawful conduct, Italian judicial authorities have focused on the organizational and commercial structures that enable exploitation to persist along fashion supply chains. Judicial administration therefore emerges as an enforcement tool that operationalizes corporate responsibility through court-supervised organizational reform.
II. Structural vulnerabilities in the Italian fashion sector
The Italian fashion sector heavily relies on subcontracting, characterized by short production deadlines, intense cost pressures and complex organizational structures in which fragmented governance and siloed decision-making undermine effective control over outsourced and subcontracted production.Footnote 6 This supply chain structure is commonly described as an ‘industrial district’,Footnote 7 referring to a geographically concentrated area of small enterprises, often employing fewer than ten workers on average, interacting through dense local supply networks and production clusters. The dispersion of production across numerous small enterprises may create forms of ‘systemic’ vulnerability by hindering effective oversight and enforcement of labour standards.Footnote 8
These dynamics disproportionately affect migrant workers, whose legal, linguistic and social marginalization increases their exposure to labour exploitation. While exploitation is not intrinsic to migrant labour, the interaction between precarious migration status, informal employment arrangements and weak oversight of subcontracting chains often creates an environment conducive to violations of labour and human rights. Indeed, labour inspections and judicial investigations have documented repeated cases of underpayment, excessive working hours, unsafe workplaces and the blurring of boundaries between work and private life, particularly when workplaces coincide with workers’ accommodation.Footnote 9 While suppliers are directly responsible for these practices, court decisions have emphasized how brand-level decisions—particularly pricing, scheduling and quality requirements—may exacerbate the risks downstream.Footnote 10 Research highlights the role of aggressive cost-reduction strategies, last-minute order modifications and just-in-time delivery models adopted by lead brands, which often cascade pressure onto subcontractors, creating incentives for exploitative labour practices.Footnote 11
Against this backdrop, Italian judicial authorities have expanded oversight beyond individual suppliers, targeting the broader organizational environment that enables exploitation to occur. This shift reflects an emerging understanding of labour exploitation as a systemic outcome of supply-chain governance failures, rather than a series of isolated infringements, thereby positioning HRDD not merely as a reporting obligation or a formal compliance exercise, but as a central governance tool for proactively addressing structural risks and power asymmetries along fashion value chains.
III. Judicial administration and effects on Corporate Due Diligence
Court-ordered judicial administration has been applied, in Italy, to major fashion companies on the basis that deficiencies in their organizational structures, purchasing practices and supply-chain management forged systemic conditions that enabled corporate criminal conduct, including labour exploitation under Article 603 bis of the Italian Criminal Code.Footnote 12 Corrective rather than punitive, the measure aims to preserve business continuity while mandating deep organizational changes, including the restructuring of internal audit and control systems, due diligence processes and managerial practices. In practice, judicial administration has required companies to translate abstract HRDD commitments—often declared in codes of ethics, codes of conduct, sustainability reports or, in some cases, DE&I policies—into consistent and operational changes, directly supervised by court-appointed administrators.
Court-appointed administrators, indeed, are tasked with redesigning due diligence processes, comprehensively mapping subcontracting networks, implementing rigorous and quality-focused audits and adjusting purchasing practices where necessary. These measures include, inter alia, the creation of certified supplier registers to enhance traceability, targeted capacity-building programmes for subcontractors to ensure adherence to ethical and labour standards and the revision of purchasing and sourcing practices to reduce undue pressure on suppliers. While these measures represent important steps towards operationalizing HRDD, challenges remain—such as aligning supplier capabilities with brand expectations and ensuring the sustainability of monitoring and compliance mechanisms beyond the period of judicial oversight. At the same time, public information on the specific measures implemented under judicial administration remains limited, as the operational activities of court-appointed administrators are only partially reflected in publicly available judicial decisions and corporate disclosures.
These judicial interventions demonstrate how law enforcement may operationalize principles reflected in international standards such as the UN Guiding Principles on Business and Human Rights (2011). Judicial administration bridges voluntary HRDD commitments and enforceable corporate accountability, accelerating the internalization of due diligence obligations across governance and operational functions.
IV. Gaps and the role of inclusion
Despite the significant progress triggered by recent judicial interventions, migrant workers largely remain background figures in enforcement-driven processes. Available information does not clearly indicate whether affected workers have accessed remedies envisaged under Italian law, such as residence permits linked to cooperation with authorities or tailored victim-support measures, nor whether remediation processes have resulted in sustained improvement in working and living conditions.Footnote 13 Similarly, limited public attention has been devoted to workers’ participation in remediation pathways, access to information in languages they understand, or long-term empowerment measures. This highlights a critical gap: judicial measures and HRDD reforms are largely compliance-driven, potentially leaving the most vulnerable groups under-protected.
For HRDD to be fully effective, companies should integrate a DE&I perspective, acknowledging that structural inequalities—such as vertical and horizontal segregation that often involve migrant workers,Footnote 14 sometimes referred to as the ‘canvas ceiling’Footnote 15—constitute organizational and socio-cultural factors that increase the risk of labour exploitation. These inequalities are embedded in organizational cultures and management practices, and may contribute to the ethnicization and marginalization of migrant workers within specific labour market segments. Integrating a DE&I lens into organizational governance requires language-inclusive communication, fair recruitment practices, intercultural sensitivity training and meaningful engagement with diverse employees and their representatives. It also requires systematic attention to occupational health and safety conditions, power imbalances within supply chains and trusted grievance mechanisms protected against retaliation.
Ultimately, while judicial administration has prompted brands to reconsider supply-chain practices, the long-term impact on migrant workers’ rights will depend on whether companies move beyond defensive compliance and adopt operational HRDD practices that are inclusive, participatory and intersectional. This highlights the need for a more narrative and relational approach to HRDD, one that integrates structural drivers of risk, operational constraints and the lived experiences of diverse employees, rather than relying on checklist-based compliance tools. Such an approach resonates with emerging critiques of EU corporate sustainability regulation, questioning whether risk-based and enterprise-centred models sufficiently engage with justice, power asymmetries and the voices of affected workers.
V. Lessons learned and emerging trends
The Italian case illustrates how enforcement may reorient HRDD towards its original human rights purpose: preventing harm and strengthening protection for those most exposed within supply chains. Effective prevention, however, cannot rely exclusively on ex post judicial intervention, but requires companies to internalize inclusion, participation and equality into everyday decision-making. The Italian fashion cases offer empirically grounded insights into how enforcement may reshape corporate governance and due diligence practices. Rather than acting as isolated corrective measures, judicial administration has exposed structural drivers of labour exploitation embedded in prevailing business models and supply-chain management. From this experience, several key trends emerge.
First, law enforcement has acted as a catalyst for internal organizational reform. Judicial scrutiny is driving brands to rethink and redesign their purchasing practices, subcontractor selection processes and audit methodologies, demonstrating that legal and reputational pressures may accelerate internal changes in ways that voluntary initiatives alone have often failed to trigger.Footnote 16
Fashion brands requested to provide additional documentation by the Milan Prosecutor’s Office under Article 248 of the Italian Code of Criminal ProcedureFootnote 17—December 2025 (in alphabetical order)
Table 2. Long description
The table contains a vertical bulleted list of fashion brands as follows.
* Adidas
* Alexander McQueen
* Coccinelle
* D & G
* Feragamo
* Givency
* Gucci
* Missoni
* Off White
* Pinko
* Prada
* Versace
* Yves Saint Laurent
Second, the Italian cases reveal the limits of compliance models that remain disconnected from core business operations. In response to judicial administration, brands have been required to integrate legal, audit, procurement and production planning functions, ensuring that human rights risk assessments directly inform commercial decision-making. Court-appointed administrators have overseen the establishment of cross-functional governance mechanisms, reinforcing the idea that due diligence is intertwined with the operational realities of fast-paced fashion production.
Third, judicial oversight has underscored the centrality of employees’ direct engagement. Information gathered through interviews with company employees—particularly migrant workers—during labour inspections and judicial investigations has provided critical insights into real working conditions and human resource management practices. These elements, indeed, cannot be fully captured through document-based audits, suppliers’ self-assessments, or checklist-driven compliance tools. Investigations highlighted that migrant workers often remained invisible in corporate HRDD reports; yet, their testimonies were decisive for uncovering exploitative practices. These findings suggest that effective due diligence requires meaningful mechanisms to listen to diverse employees’ voices and accessible grievance mechanisms (for instance, in-person interviews involving cultural mediators), alongside safeguards against retaliation, including measures to protect anonymity and confidentiality.
Finally, the Italian experience carries relevance beyond its national context, showing how enforcement can translate abstract due diligence obligations into organizational change by attaching legal consequences to governance failures and supply-chain opacity. This experience highlights the complementary role of enforcement-based HRDD alongside EU risk-based approaches, demonstrating how court interventions can operationalize human rights principles and embed them in day-to-day business decision-making. At the same time, they reveal that even well-known brands, which embrace sustainability strategies and are formally committed to ESG KPIs, may overlook critical operational vulnerabilities in the absence of credible enforcement pressure.
Overall, the Italian case suggests that HRDD effectiveness depends less on the proliferation of standards, KPIs and reporting obligations and more on aligning governance structures, commercial practices and ethical commitments. Court-ordered judicial administration has functioned as a stress test for corporate HRDD systems, exposing the gap between formal compliance architectures and the operational realities of subcontracted production. What emerges is that HRDD failures are rarely due to the absence of policies, but rather to their organizational marginalization and disconnection from purchasing practices, supplier management and internal accountability structures. At a time when the European Union is consolidating its sustainability and human rights framework through instruments such as the CSRD, the Forced Labour Regulation and the CSDDD, the Italian experience highlights a complementary enforcement-based pathway capable of compelling companies to internalize and operationalize HRDD obligations in practice.
Financial support
No funding to report on this submission.
Competing interests
Authors A and B declare none.
Open access
