Labor Issues Cost Adidas Licensing Contracts

Apparel Company Accused Of Labor Rights Violations Overseas

AdidasFollowing outcries from students who allege that Adidas violated the labor rights of overseas workers, colleges from New Jersey to Washington have decided to sever their sports-apparel licensing contracts with the multinational clothing corporation. Analysts say the backlash against Adidas highlights how consumers are increasingly concerned about the human and environmental impact of the apparel industry, suggesting companies should be making every effort to source and produce ethically.

Of late, the University of Washington, Rutgers University, Cornell University and Oberlin College elected to terminate or not continue licensing agreements with Adidas. The contracts had allowed the Germany-headquartered company to make and sell sports apparel decorated with those schools' logos. According to reports, the University of Michigan's $60 million contract with Adidas is also under review.

Student activism was a powerful force behind influencing the colleges' decisions to cut ties with Adidas. The backlash against Adidas was fueled by United Students Against Sweatshops (USAS), which says that Adidas owes $1.8 million in severance to about 2,800 workers from the PT Kizone factory in Indonesia. The facility was shuttered in January 2011.

In a letter to the Rutgers chapter of USAS, the university's President Robert L. Barchi said the students' hard work and dedication to bringing up concerns about Adidas – which included a protest in a university bookstore on November 18 – played an important role in the New Jersey college's decision to discontinue working with the athletic wear brand. "We expect the companies with which the university has a trademark license agreement to respect and uphold the labor and legal rights of workers producing Rutgers-branded products," Barchi said in the letter. "Adidas's actions are not in keeping with this expectation."

At the University of Washington, the local USAS waged a yearlong campaign against Adidas, an effort that included confronting executives from the sportswear company when they visited the campus in October. During Halloween, UW students staged a mock funeral for the factory and raised concerns with university President Michael Young while dressed as zombies. In a statement, Young said: "Whatever technical or legal arguments Adidas may rely on to support its position in this case, the bottom line is that its handling of the situation does not meet our expectations for the humane and ethical treatment of workers who produce UW licensed products."