Largely on the periphery of the Wisconsin sports world, ongoing issues have been persisting for more than two years between the university and adidas over alleged labor issues in an Indonesian factory. 2,700 former workers were denied $1.8 million in legally mandated severance pay and $3.3 million in total pay under Indonesian law after the PT Kizone factory closed in 2011, and the conflict has spawned relentless issues for the past couple years.
Last week, Wisconsin appeared to be nearing closure on the issue, as Interim Chancellor David Ward released a statement saying adidas had reached a deal with a union representing the workers. If the conflict ends there, it would mark the resolution of months-long mediation that followed a July 2012 lawsuit against adidas, who has exclusive rights to reproduce UW sideline gear and use official logos on merchandise for all 23 varsity teams. Wisconsin has held a non-exclusive contract with adidas since 2001, and the exclusive agreement was reached in August 2010 for a five-year duration.
Per Dosh, Wisconsin's case against adidas is still pending in the Dane County Circuit Court. The Indonesian district labor union intends to ask for a dismissal of the lawsuit, and that seems to be the latest update from the Wisconsin angle.
The fact remains, though, that 17 schools have dropped or suspended their contracts with adidas over the past year, as a recent article from ESPN.com's Kristi Dosh lays out. Schools such as Georgetown, Cornell, Rutgers and Washington began terminating their contracts last fall after PT Kizone declared bankruptcy and closed in April 2011. In mid-March, Penn State suspended its contract and gave adidas 60 days to develop a solution.
Joining Wisconsin and those other schools in threatening termination of its contract is Michigan, and you can understand that's why this is still a legitimate issue.
University of Michigan currently enjoys the most lucrative adidas contract in college athletics, a deal worth $60 million. A chapter of USAS on the Ann Arbor campus has been engaged in dialog with university president Mary Sue Coleman since April 2012 regarding the PT Kizone situation. Coleman began written correspondence with both adidas' president and head of social and environmental affairs in September 2012, requesting the company send monthly updates on the situation and efforts adidas was engaging in to aid workers and resolve any legal issues in Indonesia.
Michigan left Nike for adidas in 2007, signing a $60 million deal that is set to expire in 2017. While the resolution seems to have cooled the disagreements, the pending lawsuit and apparent instability of the situation bear watching. Gripes about terrible uniform designs aside, should Wisconsin continue its agreement with adidas despite the apparent violation of fair labor practices?
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