In the most recent development since February, the University of Wisconsin is taking Adidas to court over a labor code conflict that began last December.
According to a UW statement, the university is “asking a court to decide” whether the apparel giant broke the Code of Conduct or Terms of Contract stemming from a situation last year in which the owner of an Adidas subcontracted factory in Indonesia fled without paying 2,800 workers $1.8 million in legally mandated severance pay.
UW and Adidas have a deal that runs through June 2016 that is worth about $2.5 million a year, according to the statement, and in addition to this the company is licensed to be the sole shoe and apparel sponsor of UW’s athletic teams.
Prior to this most recent decision by the UW administration, Interim Chancellor David Ward had decided to move into a mediation period with Adidas when disagreement arose over whether the company is liable and must pay the workers.
Throughout the ongoing conflict, Adidas has maintained it is not responsible, while Ward’s advising committee on the topic, the Labor Licensing Policy Committee, has recommended Ward put the company on notice for termination of contract since last December.
LLPC Chair Lydia Zepeda said the most recent step concerns her because it seems to be stalling and asking for more information rather than coming to any decision.
“This could now take years, and in the meantime these people are out of money, they can’t pay bills and can’t buy food and some have even died and can’t get death benefits for their family,” she said.
She said the LLPC has been making its repeated recommendations to put Adidas on notice based on two previous similar cases in which both apparel companies ended up paying back the workers in full.
Zepeda added during this conflict Ward has asked for more information multiple times, both from Adidas and from a third party monitoring and investigative group, Worker Rights Consortium, which indicated violations of the Code of Conduct occurred.
“Each time he’s asked for more information to make the decision … It makes one wonder if the information he gets is not what he wants to hear,” she said. “I’m not certain, but it seems that they’re more concerned with money than ethics — but that’s just my speculation.”
Ward has previously expressed concern Adidas has not been taking responsibility but has stated he worries breaking the contract with Adidas could lead to the company suing the UW Board of Regents.
Zepeda questioned this reasoning and said she maintains the language in the Code of Conduct is “in clear, plain English” and that she does not understand what basis Adidas would have to sue since a violation was committed.
In a statement from Adidas, the group again said it has always adhered to the spirit and letter of UW’s Code of Conduct and that the company has continued to provide clarifying information and is confident in a favorable judgment by the court.
“We welcome the legal review process and the court’s decision so we can move forward with our partnership,” the statement said.