Cornell University, an Ivy League school in Ithaca, N.Y., has become the first institution to sever ties with Adidas due to allegations of sweatshop abuses at a factory the apparel giant subcontracted with in Indonesia.
On Thursday, Cornell President David Skorton sent a letter to an Adidas licensing manager noting “great concern” about the company’s “position on its severance responsibilities” linked to the closing of the PT Kizone factory. Skorton says Cornell is “severing its business relationship” with Adidas on Oct. 1.
This is noteworthy locally because UW-Madison has been pondering a similar move for the past nine months.
“I commend Cornell President Skorton on his leadership to support the rights of the ex-PT Kizone workers and to insist that Adidas uphold its licensing agreement with Cornell University to ensure that the workers receive all wages and benefits that they are legally due,” Lydia Zepeda, a UW-Madison professor of consumer science who chairs the university’s Labor Licensing Policy Committee (LLPC), writes to the Cap Times in an email. “We know from past experience that brands will uphold their licensing agreements if they are held accountable. This is why the UW LLPC has recommended since last December 2011 that the UW give notice to Adidas. The LLPC wants our athletes and fans to be able to wear sweat-free apparel.”
It’ll be interesting to see whether other institutions follow Cornell’s lead. Because, as Zepeda notes, colleges and universities have had some success in joining forces to make large apparel companies change their practices.
In April 2010, UW-Madison ended its apparel contract with Nike Inc. -- becoming the first school to cut ties with the world's leading supplier of athletic shoes and apparel -- due to alleged labor rights abuses at two factories overseas. In July of that year, Nike surprised many by reversing course and agreeing to take significant steps to rectify the situation. And in November 2009, UW-Madison teamed with nearly 100 colleges and universities to take action to cut ties with Russell Athletic after the company shuttered a factory in Honduras shortly after workers unionized. That move pushed Russell to rehire 1,200 workers who had lost their jobs.
As for the current situation involving Adidas, it has been nearly eight months now since the Worker Rights Consortium released a report detailing sweatshop allegations against Adidas and others. The labor rights monitoring organization accused the owners of the PT Kizone factory of shutting down the facility and fleeing in January 2011 without paying 2,700 workers about $3.4 million in legally mandated severance pay.
Although some companies, including Nike, that were associated with this factory at the time have paid the workers about half of the total owed, the WRC reported again in May that “Adidas is the only university-connected buyer at PT Kizone that has refused to pay funds toward making the workers whole.”
Adidas has continually argued that it has no responsibility for giving the workers severance pay because that is the factory owner's responsibility.
The UW System’s Board of Regents filed a lawsuit against Adidas in Dane County Circuit Court back on July 13 in order to get a court’s legal opinion on whether or not Adidas is in compliance with its contract with the Regents and UW-Madison. Brands and suppliers that sign deals with the university are mandated to follow its code of conduct -- which dictates workers' wages and working hours, severance compensation, health and safety issues, freedom of association and the like.
The sides are next due in court for a status conference on Oct. 11.
It also must be pointed out that it appears the deal Cornell had signed with Adidas was a relatively small licensing agreement that gave the company the right to produce and sell Cornell-logoed apparel. The Adidas deal with UW-Madison, however, is both a licensing agreement and a sponsorship contract in which Adidas provides all 23 Badgers sports teams with shoes, uniforms and equipment in an arrangement that's worth about $2.5 million annually to the university in both sports gear and royalties.
In his letter, Skorton says Cornell is willing to do business with Adidas in the future if the company addresses the severance pay concerns.