H 65°, L 49° | Tomorrow: 
H 60°, L 37°University of Wisconsin Chancellor Biddy Martin’s office announced Friday it will end its apparel contract with Nike after the company’s failure to respond to a series of labor law violations.
The UW Labor Licensing Policy Committee announced the end of the partnership at its meeting Friday.
The partnership allowed Nike to manufacture and sell goods with the UW colors and logo. UW spokesperson John Lucas said UW made $49,000 per year on the agreement. He speculated Nike probably made around $490,000 from the partnership.
After Nike closed several of its factories in Honduras in January 2009 without paying severance to its workers, the LLPC recommended Martin end the apparel partnership. Committee chair Dawn Crim said Martin wanted to engage Nike and offer it time to find a solution. She offered the company 120 days to fix the problem. The 120th day was last Thursday.
Crim said Martin had exchanged written correspondence as well as phone and face-to-face conversations with Nike representatives during the 120-day period, trying to get them to compensate their workers. Because they could not come to an agreement, Martin decided to end the partnership for now.
“She says for now because we feel that in order to change the industry, to help workers, we need to engage companies,” Crim said.
Crim added the chancellor’s office does not see ending the contract as a solution to the problem. She said the true solution would be better conditions and workers working.
Lucas said the end to the partnership means Nike will no longer be allowed to produce UW goods effective immediately, and it has a small window of time to clear its inventories. He added stores that currently sell UW Nike apparel would be allowed to finish selling what they have bought.
Student Labor Action Coalition member and UW sophomore Jonah Zinn, who actively campaigned for an end to the contract, said he was very happy with Martin’s choice, and she made the right decision. He added he thinks it is significant UW is the first school in the country to end a licensing contract with Nike because of the violations.
LLPC member Lydia Zepeda said of the other universities she has contacted about the potential of cutting the contract, many have been supportive. Georgetown, the University of Montana and the University of Washington have all expressed an interest in talking with Martin on this issue. Only Purdue has said it disagrees and will continue to work with Nike.
After discussing Martin’s decision, the committee put two of the workers from Honduras on speakerphone and asked for their stories.
Gina Cano was one of 1,200 workers who had been fired. She said when the factory closed, she and other employees who were members of a union tried to negotiate with the manager of the factory and were told he would not negotiate with workers who were organized.
She said because of her history of unionizing, she has been unable to find and keep another job since being fired in 2009. If Nike were to pay her severance, she said, she would be able to get out of debt and back on her feet. However, when the workers contacted Nike they were only offered more training in apparel manufacturing.
“What good is training going to do us? It’s not going to alleviate our debt. It’s not going to put food on our table… we already know how to do the job we’ve been doing for many years. The solution is our severance,” she said. “I can’t survive off these trainings.”
Another fired employee, Lowlee Urquia had a similar story. She too was fired, refused severance and only offered further training from Nike. When the women learned of UW’s end to the contract, they offered their tearful thanks to the committee.
“You are making our words louder, so that Nike can no longer ignore us,” Cano said.
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SLAC just took food off the table for more families. Now that Nike does not have the contract with UW, then they will need to let go of employees who were making the UW apparel. So its unfortunate that the Honduras employees didnt get severance (not sure if they were actually entitled to it, since article doesnt specify) but now the workers that did make UW apparel wont have jobs either. Good work SLAC.
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SLAC is amazing and unstoppable! The first comment is as old as the antisweatshop movement. Since actions speak louder than words, here’s the best response one could possibly imagine http://www.nytimes.com/2009/11/18/business/18labor.html?_r=1
UW-Madison, along with over 100 colleges and universities throughout the world cut ties with Russell Athletic last year, which proppelled Russell to reopen its closed plant, rehire all displaced workers, and recognize workers right to unionize in all of its 8 plants in Honduras. Case in point.
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This article makes it sound like Nike did something wrong (other than not abiding by the UW’s bizarre rules). It gives the impression that Nike failed to pay its workers, but this is not the case.
Nike did not close any factories without paying workers. And the severance in question is not part of an employee-employer contract; it is forced upon Honduras companies by the Honduran government. These onerous mandates don’t make economic sense, leaving the companies with no choice but to try to run their businesses in spite of them.
The closing of the Honduras company and dissolution of its assets was settled in a Honduras court of law as it should have been. The UW would love to force Nike to provide charity to workers in other countries, but it would be charity.
If the UW cared about real productivity and jobs they would petition the Honduras government to remove their economic restrictions so that companies there could freely scale their workforce up and down without costly mandates which leave them no choice but to close shop.
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You know everything about everything. Teach us. (Not really)
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100% Agree.
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A voice of reason!
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$490,000 in revenue is chump change. If this starts an landslide of Nike schools getting out/demanding different practices from Nike then things could get interesting but when an Adidas school like Wisconsin cancels their tiny contract I doubt Phil Knight even raises an eyebrow.
I feel bad that people who don’t understand the American merchandising world like Lowlee Urquia are getting their hopes up
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Hats off to Biddy Martin for staying true to her word and ending UW Madison�s contract with Nike. UW Madison has gone out on a limb here, and set the bar high for other colleges and universities to reexamine their contracts with Nike. What grabs my attention is Nike�s approach to solve the problem-they have offered Honduras workers more training in apparel manufacturing, instead of paying them their severance. This begs the question- is Nike attempting to offer a greater solution by giving workers the opportunity for job employment in the future, or are they simply avoiding writing a big check by placing a band-aid on the problem? Perhaps Nike�s solution is a hand up, not a hand out, which is to say they are looking towards the future and offering something to the worker that is more valuable than money. The other part of this debate that grabs my attention is Martin�s statement of �for now�. If UW Madison ends up picking Nike back up and allows them once again to sponsor UW athletics after Honduras workers are properly paid, what does that accomplish? We are sending an entirely different message if all we do is essentially threaten Nike, then they fix the problem, and we resign with the tarnished brand. When all is said and done, we will be back to where we started. What is most important is for Martin to hold fast to the pillar of beliefs she has upheld at Madison, Nike should be a business agreement left in the past, with no future to be rekindled.
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Baloney. Global apparel brands exercise due diligence in balancing their sourcing, assessing risks, leveraging suppliers and maintaining, even enforcing, high standards. All Nike did in this case was run their business….and broke no local laws doing so.
Nike’s business model from the time it began to form in Phil Knight’s head was global, global, global. No company in the history of apparel has dictated higher standards for their vendors and for their vendor’s vendors.
But then, if anyone knew that at UW, had done their own diligence, their ‘cause’ would go away. This entire article and decision is phoo phoo. It could only happen on a campus..
Real world, in Central America, its a fight to keep jobs based on forces sophomores, trust me, have no clue exist. Push back - there’s a bigger picture.
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Great, now when are you going after Adidas/Reebok? They’re the ones making the REAL profit from UW
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This article makes me really proud to attend UW. Biddy Martin is definitely taking the high road in ending UW’s partnership with Nike, despite the loss of money. Martin is setting a good precedent for other schools to follow (and they have). It is disappointing however that Purdue is keeping their contract. As this trend catches on, hopefully Nike will clean up their act!
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1) UW’s Labor Code of Conduct explicitly states licensees are responsible for the conduct of their subcontractors, if they choose to subcontract.
2) The Code of Conduct also explicitly states that local labor laws must be followed. Honduran labor law requires the payment of severance. Not paying severance is a violation of the code of conduct.
3) Severance is not charity. In fact it is legally-mandated. Not paying it is not only illegal, but immoral and against UW’s Code of Conduct.
4) Nike had ALREADY shut down the factories. Hence, the need to pay severance. The factory was shut down after workers formed a union to represent their rights. The Labor Code of Conduct also explicitly states that licensees must respect freedom of association and collective bargaining. This was another violation of the code.
5) “When the women learned of UW�s end to the contract, they offered their tearful thanks to the committee.” Should speak for itself concerning Chancellor Martin’s courageous move to stand up for worker rights and the good name of the University of Wisconsin.
Moral of the story: Get the facts straight before commenting on news articles.
Be Proud Badgers! Your university stands up for what is right!
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I agree with (most of) your facts, but not your assessment of them.
Nike did violate the UW’s code of conduct, but the code is unjust.
Nike did not shut down the factories and Nike was no longer contracting with the factories when they closed. To require Nike to be responsible for the conduct and financial responsibilities of their subcontractors including past subcontractors is unjust.
The severance was owed by a Honduras company who went out of business due to a slow economy. Their assets were apportioned according to the laws in that country. Nike has no legal or moral responsibility in the matter.
For the UW to demand that Nike provide severance when they do not owe it legally or morally amounts to asking them to provide charity.
It is also unjust for the Honduras government to dictate the terms of employment for these workers. It is harmful to the ability of these companies to stay in business and detrimental to the ability of workers to find and retain jobs.
The UW should support Nike in its efforts to provide job training and employment instead of condemning them for it.
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SLAC is morally bankrupt. Congrats on impoverishing the third world to make yourselves feel important!
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I am glad that the UW decided to ended its apparal contract with Nike. This company has had a long history of human rights violations and apparently doesn’t plan on putting an end to them soon. They produce their products in sweatshops with unhealthy working conditions and even have children working in them. Furthermore, since 1996 they have been violating minimum wage and overtime laws. Also, they send all of the jobs overseas to these sweatshops, taking away jobs from the US and hurting the economy. Then to top it off, they charge ridiculous prices for products that cost them pennies to make, hurting our economy even more. Maybe the wide-spread support of Nike is due to people’s lack of education about what Nike does (I was one of those people until reading an article for my J201 class which describes these human rights violations). Furthermore, its not just Honduras where Nike has done its workers wrong, its all over the world, from China to Vietnam to Indonesia to Mexico to Cambodia to Pakistan etc. I am glad to say that my University does not contract with a company that has blatant disregard for human rights and seems to not even care.
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Does Honduran law mandate that employees be paid severance for termination of employment? If so, is severance pay required for termination for any reason, or only termination without cause? It would be helpful for this information to be included in the article. It isn’t clear what the “series of labor law violations” were without a reference to the law on point. This should probably be rephrased to say, “allegations of labor law violations” unless you have substantiated documentation of the alleged violations.
Simply failing to provide a severance pay is not a labor law violation in the United States. Under the Fair Labor Standards Act, employees are not entitled to severance pay; severance is a contract provision between the employer and the employee. Perhaps the law is different in Honduras.
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I agree that this cancellation of Nike’s contract is not necessarily as impressive of a step as the article makes it sound. $490,000 is nothing to a huge corporation like Nike. However, I think those people who are writing this step off as insignificant are also wrong. At least UW is doing something. They are taking a step to show Nike that what they are doing is wrong. Nike’s sweatshop scandal started in 1996 and it’s about time that some major steps were taken against it. And perhaps UW’s termination of contract will persuade other universities to do the same. The main idea here is that UW is recognizing the problem with Nike and reacting to it, whether it will be effective or what changes it will bring are secondary to the dignity of the University.
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I believe that what Biddy and the university has done with ending the contract with Nike is a very important step in the beginning to fix the problem of poor working conditions and low pay, in which Nike products are produced. By allowing Nike a time period to fix the problem was more than generous considering workers continue to work in unhealthy and dangerous conditions without pay. I am glad that the given time period was not extended, showing Nike that there is no lenience here at the university for that type of conduct; they had their chance to improve and they did not, and have had to paid the consequences. However, I do not think that this, by any means, solves the industry’s problems, as Biddy suggests in the article, since an actual improvement would be to make sure that workers were receiving a decent wage and working in safe and sanitary conditions. It is devastating to hear that a big company such as Nike would rather lose contracts with big universities than pay their workers, but hopefully, by losing this contract, the company will be motivated to finally begin to change the way their company produces its products.
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I think we should remember that this is not Nike’s first run in with sweatshops and injustice. We all remember the “Just don’t do it” and Nike, Do it Just” campaigns that have been appearing since the nineties. Clearly, the charity work to cover the up the scandels is not working, and Nike has not learned much from these issues. I applaude Biddy and the SLAC for making a stand, even though it probably wont make much of an impact for Nike, but hopefully others will follow. This company is making enough of a profit to appropriatly pay their employees.
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Wow, cutting more jobs when there isn’t enough already! I agree with 10:04, we have now lost all of the jobs of employees who made clothing for UW. Its only a matter of time before UW cuts more brands we use (Reebok/Adidas) because I’m SURE they are perfect. Businesses are being reprimanded for being successful, and for any of these companies to be successful you HAVE to outsource workers. How about we just start producing in the USA, then you can pay $350 for your Nike shoes :)
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These moronic hippees should be exterminated, just like the bugs in their hair. The shout “union busting is disguisting,” but do not think before they speak. Nike would not be outsourcing to other countries for these “sweat-shop wages” if we did not have unions in this country. Unions, along with numerous other legislative restrictions, are the reason that massive companies move thousands of jobs to foreign countries. Now I agree that Nike should pay the workers that rightfully worked for them. However, screaming and moaning that Nike pays these people too little is truly the outragous thing. If these people don’t like working for Nike, they do not have to. No one is putting a gun to their head. I agree that working may be circumstantial, but that is not Nike’s responsibility.
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Despite the fact that the actions taken by Biddy aren’t going to solve the problem at hand, it’s certainly moving in the right direction. Why stand behind and support a company that violates law after law? The fact that UW is one of the first in the nation to step up to the plate and cut off Nike as a manufacturer is quite a bold statement that should only be applauded. As one comment noted earlier, the actions taken may not take a blow directly to Nike, but it can certainly get the ball rolling to eventually make a significant impact on the company. In my opinion, the violation of labor laws should be the main focus and quite frankly, there is nothing positive that can be said about them.
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Like Crim stated in the article, ending this contract isn’t a solution to the problem, but it is a start. If just by UW cutting its ties with Nike, several other school’s have also considered doing the same, that could start to have an impact. Someone else commented on this article that “$490,000 is chump change” and yes, to Nike this may not be a lot of money. Although UW is making an initiative for change and it is about the principle of what Nike does. If enough schools or groups continue to go against Nike, hopefully they will make a change.