About six months after German Federal Minister for Economic Development and Cooperation Gerd Muller launched a multistakeholder initiative, comprising fashion companies, retailers, trade unions, and the civil society, to improve working conditions and labor rights in the textile industry, the industry suddenly walked out on him. After months of discussions, negotiations, and expert meetings, the majority of industry representatives refused to become members of the Partnership for Sustainable Textiles (hereafter Textiles Partnership for short). The initial idea behind this partnership was to tackle the poor working conditions in the ready-made garment (RMG) industry in developing countries such as Bangladesh. But after many controversies over the partnership’s goals and the processes it involved, just one day before the inaugural act various trade and commerce associations, as well as many retailers, announced that they would not sign the agreement. The case of the Textiles Partnership illustrates how initiatives of collective action may be suited to tackle ethical problems in business practice. It sheds light on the problems that hamper the emergence and effectiveness of such initiatives and contributes to a debate on their feasibility. The report on this case has been based on material drawn from public sources and from interviews with people who were involved in the formation of the Textiles Partnership.