September 16, 2012

Citing Labor Abuses, Cornell Severs Contract With Adidas

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Cornell became the first university to sever its business contract with retail giant Adidas because of recent allegations of labor abuses.

President David Skorton sent a letter to Adidas Team, Inc., on Thursday, stating that due to the company’s refusal to give severance pay to the 2,800 workers it displaced upon the 2011 closing of an Indonesian factory it worked with, the University will terminate its contract with the company, effective Oct. 1.

“We believe that severance is a basic worker’s right as are a living wage, freedom of association and safe working conditions,” Skorton said in the letter.

Karen Li ’15 –– a member of the Cornell Licensing Oversight Committee, which was formed in 2010 to ensure that companies the University does business with uphold workplace standards –– said that she was pleased by Skorton’s letter.

On Sept. 6, the LOC recommended to Skorton that the University cease business with Adidas altogether. Li said that Cornell’s termination of the contract signals that the University is committed to taking a stance on the issue of labor rights.

“I’m really happy that President Skorton listened to students, faculty and professors after a year and a half of campaigning,” she said. In addition to ending the business contract with Adidas, Skorton also announced Friday that the University will officially become a part of the Designated Suppliers Program. The program — administered by an independent labor rights monitoring organization, the Workers Rights Consortium — requires University licensees to buy apparel from supplier factories that are “in compliance with their obligation to respect the rights of their employees,” DSP’s website states.The program also requires colleges that participate to ensure that the companies that design their apparel do so in factories that pay a “living wage” and “maintain long-term relationships with suppliers” according to DSP’s website.“The University has been a leader in advocating for worker rights and we see this as a significant step in eliminating sweatshop conditions from collegiate supply chains,” Skorton said in a University press release.As far as is known, Cornell is the second university to officially join DSP, Li said. Rutgers University, the first school to join DSP, became a member of the group a few months ago.Cornell expressed its support for DSP’s principles in 2006, but did not officially join the organization because it was “fraught with logistical and legal programs,” according to Mike Powers, licensing director of University Communications and chair of the LOC. It was not until December 2011 that the U.S. Department of Justice announced that it had reviewed the program and found that there were no antitrust issues with the program. That is when joining the program became a viable plan for Cornell, Powers said. Cornell’s contract with Adidas was a licensing contract, which gave the company the right to produce and sell apparel that bore the University logo in retail stores and online.But the effects of the University severing ties with Adidas may not be visible on campus, since no Adidas products are currently being sold at the Cornell store, according to Patricia Ann Wynn, director of the Cornell Store.Wynn said that, at the Cornell Store, “we fully support the decision [to sever ties with Adidas].”“For many years, we have worked closely with the University and student groups on these issues,” she added. The end of Cornell’s relationship with Adidas will also not have an economic impact on Cornell, Powers said, adding, “it won’t cost the University anything — but it does call attention to [Adidas’] stance on the severance issue and their refusal to budge on it.” Li said that, as of Sunday evening, there has been no response from Adidas. Among brands that are sold in the Cornell Store –– including Russell Athletic, Under Armour, Champion and Nike –– Russell Athletic and Nike have been accused of similar labor rights violations in the past, according to Powers. The University announced that it was ending its contract with Russell Athletic in February 2009, when the company abruptly closed its Honduran factory reportedly because its workers attempted to unionize. In November of that year, however, Russell announced that it would begin complying with the University’s labor standards and rehire the 1,200 workers it fired, according to a University press release.Cornell later re-signed the Russell contract. Since then, the company has been one of the University’s prominent business partners, according to Powers. “We like to reward [Russell] with even more business due to the way they’re doing things now,” Powers said. He said the Cornell Store now buys clothing from Russell Athletics to sell on campus.Similarly, in 2010, the University threatened not to renew its contract with Nike when it failed to pay severance to workers in Honduran factories. When Nike paid its fired employees, the University renewed that contract as well.To successfully work with DSP, Cornell must communicate and negotitate with the company, Powers said.“It’s going to require an incredible amount of cooperation between the licensees and the [University],” Powers said. “Universities have to acknowledge the business realities that the companies face and the companies have to have to acknowledge our goals in a worker rights’ agreement.”Skorton said he hopes cutting Cornell’s contract with Adidas will serve as a sign to the company that it must change its ways and take responsibility for its workers. “We sincerely hope Adidas, as an industry leader, will acknowledge this need and assume a leadership role in rectifying the problems,” Skorton said in his letter. “When that happens, we will be happy to consider re-establishing our relationship.”

Correction: A previous version of this story incorrectly reported that Mike Powers, licensing director of University Communications, said that it will take Cornell an “incredible amount of cooperation” to work successfully with Adidas. In fact, Powers made the statement in reference to the Designated Supplies Program.

Original Author: Sarah Sassoon