UW asks court to clarify whether adidas violated terms of contract

The University of Wisconsin Board of Regents is asking a court to decide whether adidas has met the terms of its contract with UW–Madison and the Labor Code of Conduct.

At issue are the actions by a subcontractor of adidas, which produced goods at the former PT Kizone factory in Indonesia. The factory’s owner closed it without paying millions of dollars in wages and benefits to Indonesian workers. The displaced workers are still owed $1.8 million in severance payments.

Adidas has a license to place UW–Madison logos on apparel and is an exclusive shoe and apparel sponsor of the university’s athletic teams.

UW-Madison Vice Chancellor for Administration Darrell Bazzell told the Labor Licensing Policy Committee Friday that by asking for the court’s opinion, the university had the best chance of ensuring the workers are paid, as well as protecting and maintaining the integrity of the university’s code of conduct as a useful tool in such situations.

“It’s not just the campus saying, ‘We think you should comply,’” Bazzell said of a potential court judgment in the university’s favor. “We would now have the legal system saying, ‘You need to do this.’”

Members of the committee questioned whether the action was the right approach, arguing the contract is clear and that lengthy court proceedings will only delay the goal of getting pay into the hands of the workers.

“The university is associating itself with a company that is doing harm to the people who manufacture a product for them,” said Lydia Zepeda, chair of the committee and a consumer science professor in the School of Human Ecology. “I’m really deeply, deeply saddened for the 2,686 people who are not being paid and now are being faced with months – years – more procrastination in terms of ever being paid.”

Adhering to the Code of Conduct is a contract requirement for brands and suppliers to the university. The code addresses workers’ wages, working hours, overtime compensation, child labor, forced labor, health and safety, nondiscrimination, harassment or abuse, women’s rights, freedom of association and full public disclosure of factory locations.

The university’s current sponsorship with adidas runs through June 2016 and is worth about $2.5 million a year in royalties and equipment. In addition, licensing royalties paid by adidas to UW–Madison since 2004 have funded hundreds of thousands of dollars in need-based scholarships to UW–Madison students outside athletics