College Tells Nike ‘Just Pay It’
By Tom Ryan
On Friday, the University of Wisconsin canceled its licensing agreement
with Nike Inc. over the non-payment of more than $2 million in severance due
workers of two plants that closed in Honduras. Nike claims it has a limited
obligation to the workers since it only subcontracted apparel production from
In December, UW Chancellor Biddy Martin gave Nike 120 days to rectify the
situation involving the layoff of 1,800 employees at the factories, Hugger
and Vision Tex, in January 2009. On Friday, she concluded that Nike hadn’t
“[Nike] has not presented clear long-range plans to prevent or respond
to similar problems in the future. For this combination of reasons, we have
decided to end our relationship for now,” said Ms. Martin, in a statement.
Wisconsin’s code of conduct requires the 500 companies that make products
bearing its name or logos to take responsibility for its subcontractors’ actions.
Its contract with Nike generated $49,000 in royalty income for the university
last year. Martin’s decision came after student activists held several rallies
on UW’s campus over the situation.
She added, “We remain hopeful that Nike — which has had a positive
impact on working conditions in the industry overall over the past several
years — will
ultimately decide that it is in everyone’s best interest to ensure that the
workers receive severance or to establish a meaningful alternative plan.”
In response, Nike said that while it regretted UW’s decision, it sees the
factory’s owners, Anvil and New Holland, as responsible for the compensation.
“It remains Nike’s position that factories which directly employ
workers are responsible for ensuring that their employees receive their correct
entitlements and, as such, Nike will not be paying severance to workers that
were employed by Hugger and Vision Tex,” said Nike in a statement. “Hugger
and Vision Tex were subcontracted factories to two factories, Anvil and New
Holland, that took orders from Nike. Nike paid in full for all products ordered
from Anvil and New Holland and we understand that those factories, in turn,
paid in full to Vision Tex and Hugger.”
Nonetheless, Nike said it is working with Anvil and New Holland in developing
job training and placement for the displaced workers. It also touted its past
record around labor standards and said it is undertaking a “deeper review” to
further improve oversight of its subcontractor factories.
UW’s decision to cut Nike’s contract comes after anti-sweatshop groups scored
by a landmark victory last fall when Russell Athletic agreed to rehire 1,200
Honduran workers who had lost their jobs in a factory closing. Nearly 100 universities
had cancelled their Russell contracts over alleged anti-unionizing efforts
that Russell has refuted. The major difference is that Russell owned the factory
while Nike only subtracted production.
Under the ‘Just Pay It’ slogan, Cornell University, Purdue University and
the University of Maryland have also seen campus protests over the Nike/Honduras
Discussion Questions: Do you agree with Nike’s statement that the “factories
which directly employ workers are responsible for ensuring that their employees
receive their correct entitlements”? How should Nike respond to any
future student activism over the Honduran plants closings?
- Badgers cut ties with Nike over labor concerns – The Associated
- Wisconsin Slashes the Nike Swoosh – The Oregonian