Statement of Interim Chancellor David Ward on adidas

It has been several weeks since my last update to you on our pursuit of workers’ rights issues involving adidas.

During that time, I have been engaged in discussions with several shared governance groups, including today, (Friday, March 9) with the Labor Licensing Policy Committee and recent sessions with the University Committee, the Academic Staff Executive Committee and the Associated Students of Madison Coordinating Council.

UW-Madison and adidas have a relationship in which adidas is both a licensee of our logos, but also an exclusive sponsor of our athletic teams.

Through a subcontract, adidas was one of many firms that sourced products at the former PT Kizone factory in Indonesia. The owner of the factory closed it without paying millions of dollars in wages, in violation of Indonesian law. Adidas has argued that it should not be solely responsible for payment to those workers.

My approach to this issue has been very simple: I believe that UW–Madison is in the best position to create meaningful progress if we work directly with adidas to attempt to contribute to the well-being of displaced Indonesian workers. I do not believe that the termination of our relationship is productive at this point, since it does not provide resolution to the severance issue and may put the university in difficult legal footing in the future.

I have initiated mediation in this situation both because it has the potential to be successful, but it is also contractually required in our sponsorship agreement when a dispute arises. By nature, the mediation process is confidential, but I will continue to provide updates and be as transparent as possible. We are attempting to expedite the timing of this process over the next month, but the timeline hinges on the availability of a mutually agreeable mediator.

Mediation occurs at a location and date fixed by mutual agreement, and attorneys from the state Department of Justice will provide legal counsel for university, help select a neutral arbitrator and write the mediation brief. They will participate in mediation and negotiations. Through mediation, we are attempting to maintain our Code of Conduct  as a useful tool in these situations. An adverse outcome in a lawsuit could actually put our code at risk.

I respect the advice of the Labor Licensing Policy Committee, as one of the shared governance committees that care deeply about this issue. I have consistently reviewed governance recommendations and believe that we all want a positive outcome. I invite the LLPC to engage in the mediation process by sharing a document that will be used as part of the process and participating to the extent allowable by the DOJ.

I want to reiterate that my goal in this issue is to see redress for the impacted workers, while simultaneously mitigating financial harm to our institution by means of a required process of mediation.

– Interim Chancellor David Ward