Material Breach in UW and Adidas Exclusive Contract

The University of Wisconsin, Madison has an exclusive relationship with adidas worth $1.2 million annually to provide uniforms to all UW sports teams. Adidas is also a university licensee and has the right to produce UW apparel. In signing the contract with the UW, adidas agreed to a code of conduct that stipulated its responsibilities in dealing with workers, factories, and suppliers. Due to workers rights violations by adidas, there has been a material breach*** in the contract, as well as other questionable practices. Specifics are laid out at the bottom of this post.

According to reports issued by both the Worker Rights Consortium and the Fair Labor Association, workers in the Hermosa factory have not only been blacklisted for union activity, but are owed $825,000 in unpaid wages and health care. In addition to the Hermosa case, this recommendation was based on three other cases of sweatshop abuse within Adidas’ supply chain: at the BJ&B factory in the Dominican Republic, where Adidas pulled out all of its orders as soon as workers formed a union and demanded a wage increase, and PT Panarub and PT Tong Yang in Indonesia, where workers have also been denied their right to form a union.

Yesterday, March 14th, the Chancellor came out with a statement saying he will engage with brands to fix the problem, but that the UW will not cut the contract. Though I commend the Chancellor for taking a step in the right direction, this is not enough. Cutting the contract and engaging brands to resolve the problem are not mutually exclusive. Both must happen. Therehas been a material breach in the contract because of adidas' blatant disregard for workers' rights. This is precendent setting and the UW needs to stand up to adidas and honor the terms of the contract.

The UW men’s basketball team, formerly #1 in the nation, now still #3, play in uniforms supplied by adidas. The players wear these clothes with confidence, but if they were told the truth of the conditions in which the apparel was made instead of being lead to believe they are only alleged claims, I presume this confidence would diminish and detract from their game. This would be a loss for everyone, so to make it easier on their conscience, let alone support the Hermosa, BJ&B, and PT workers and all other workers affected by this bad agreement between the UW and adidas and demand that the contract is cut immediately.

The Labor Licensing Policy Committee unanimously recommended that the Chancellor cut the contract with adidas. Not only did they vote to cut the exclusive sideline contract, but due to the insistence of Professor Dresang, also the licensing agreement. If the former director of the La Follette School of Public Affairs proposed and Jane Collins, a world renowned expert on the global garment industry agreed, then why would the Chancellor not heed their advice?

Workers have been struggling to find new jobs, and have called on us because changes need to be made now. The UW can no longer justify their exclusive relationship with adidas, not only due to the breach of contract, but also with values they claim to uphold.

UW leads the way in sports, now they need to lead the way in sustaining workers rights.

The Student Labor Action Coalition (SLAC) and it's national counterpart, United Students Against Sweatshops (USAS) are currently working to pressure the UW administration to take action. Efforts will continue until the contract is cut and workers receive justice.


***Material Breach:

1) Workers blacklisted for union activity in the Hermosa case, El Salvador, a clear violation of the Code of Conduct’s freedom of association provision: No employee shall be subject to harassment, intimidation or retaliationin their efforts to freely associate or bargain collectively.

2) Workers at Hermosa are owed $825,000 in back wages and compensation. Adidas' failure to ensure that subcontractors comply with the laws of the country in which they operate. In this case, adidas Group failed to ensure that workers’ legally mandated social security was paid for 9 of 10 years: The term “Licensee” shall for purposes of the Code, and unless otherwise specified in the Code, encompass all of Licensees’ contractors, subcontractors or manufacturers which produce, assemble or package finished Licensed Articles for the consumer. … Licensees must comply with all applicable legal requirements of the country(ies) of manufacture in conducting business related to or involving the production or sale of Licensed Articles.

Two of many other violations:
1) Moving orders out of a factory that just signed a collective bargaining agreement in the BJ&B case, the Dominican republic
2) Violating worker’s freedom of association and right to collective bargaining in PT Tong Yang and PT Panarub, Indonesia. The Workers Rights Consortium, and independent monitoring body has confirmed all of these violations. The Labor Licensing Policy Committee at the UW unanimously voted to strongly recommend that Chancellor Wiley immediately cut the contract with Adidas. The University of Wisconsin knows the truth and must act now to sever their ties with adidas. They have both a legal and moral obligation to do so.