Settlement pending in labor dispute that sent UW and Adidas to court

2013-04-24T05:15:00Z Settlement pending in labor dispute that sent UW and Adidas to courtPAT SCHNEIDER | The Capital Times | pschneider@madison.com madison.com

A settlement is reportedly in the works in a dispute between Adidas — which has a $2.5 million licensing and royalties deal with the University of Wisconsin-Madison — and a union representing former workers of an Indonesian factory that produced apparel for the athletic wear giant.

The Workers Rights Consortium informed the university Tuesday that a possible settlement had been reached in a dispute in which workers from the bankrupt Adidas subcontractor — PT Kizone — sought severance wages and other benefits from Adidas.

“The university has spent a great deal of time and effort working on this issue and we’re hopeful that a positive conclusion is near,” UW interim Chancellor David Ward said in a statement Tuesday.

“It has been a long road and not everyone has agreed at every step of the way. But what matters the most was the deliberative process and engagement with our licensee, community members and shared governance,” said Ward.

He went on to recognize the work of the community and faculty and students on the Labor Codes Licensing Compliance Committee (formerly the Labor Licensing Policy Committee).

That committee in December 2011 called for the UW to move to terminate its contract with Adidas for failure to meet the university’s code of conduct governing conditions under which licensed products are produced.

The company claimed that it was not liable for benefits not paid to employees of a subcontractor. Instead of terminating the contract, UW turned to the courts, asking Dane County Judge John Albert to rule on whether Adidas is obligated to compensate the former PT Kizone workers under its contract with UW-Madison.

Vice Chancellor Vince Sweeney told me Tuesday he could not say if the settlement included payments from Adidas to the workers. “WRC indicated there was a pending settlement and all parties were happy,” Sweeney said.

He could not say what impact the settlement might have on the university’s lawsuit. “We’re still in litigation,” he said.

WRC said details of the settlement announced by the union have not been disclosed.

"We assume that the agreement achieves what the union has long sought and what university labor codes require: making the workers whole for the severance they legally earned but have long been denied," WRC executive director Scott Nova said in an email.

Lingran Kong, a student member and vice chairman of the LCLCC, said UW was one of the first U.S. colleges that lease licensing rights to Adidas to take up the cause of the PT Kizone workers, laying the groundwork for other universities to join in. “Now (many) universities have cut their contracts with Adidas,” she said. “It sounds like it will be over soon.”

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