Cornell University has decided to cut ties with Adidas due to reports that the company was refusing severance pay to workers after closing a sweatshop in Indonesia, which could have implications for the ongoing conflict the University of Wisconsin has with the company over the issue.
Cornell University President David J. Skorton announced the university’s decision in a letter to the company last Thursday. In the letter, Skorton said severance pay is a basic worker’s right just as much as a living wage, freedom of association and safe working conditions.
Cornell’s decision will be effective Oct. 1 this year, Skorton said in the letter.
In July, UW announced it would be “asking a court to decide” whether Adidas broke UW’s code of conduct stemming from a situation last year where an Adidas subcontracted factory owner fled the factory without paying about 2,800 workers $1.8 million in legally mandated severance pay.
Adidas has maintained it is not responsible for the actions taken by a subcontracted factory owner.
Interim Chancellor David Ward had previously decided to move into a mediation period with Adidas over the dispute, and the UW System Board of Regents decided to file a lawsuit against Adidas in a Dane County circuit court when mediation did not produce results.
Student Labor Action Coalition member and Labor Licensing Policy Committee member Lingran Kong said LLPC voted unanimously for UW cutting ties with Adidas last December.
Kong said when corporations sign a contract with UW, they are agreeing to follow the university’s code of conduct and UW has a certain labor standard that Adidas is not in compliance with.
This is not the first time UW has faced labor issues with big companies, Kong said. In 2010, the university terminated its contract with Nike because of similar problems, she added.
“In 2010 Nike owed 1800 workers $2 million,” Kong said, “UW became the first university to cut our contract with Nike, followed by Cornell and Brown University.”
Kong said now the situation is in reverse as Cornell has taken action against Adidas first, and that now UW and other universities should follow suit.
Kong said UW has a responsibility to show companies like Adidas they cannot disregard contracts and that there are consequences for their actions.
UW professor and LLPC Chair Lydia Zepeda said Cornell’s decision has major implications at UW since over the past nine months the university has expressed its concerns about Adidas’s treatment of their workers.
“This is having a very adverse effect on our athletes because we’re forcing them to wear uniforms that were produced with sweat,” Zepeda said. “If I were an athlete or a fan, I would object to that.”
Zepeda also said the company has not denied the claims their workers are owed money and added Adidas claims it is not in their company policy to pay severance.
Zepeda said if Adidas shows they can reform its ways, UW would be open to signing with them again.
“Part of the issue is that Adidas has become a hollow corporation,” Zepeda said, “They have a business model where they contract everything out to factories. The idea is then they’re not responsible for what happens in those factories. This is why we have a code of conduct.”