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Rutgers cancels Adidas contract sighting overseas conflict

ADIDAS12212_optBY BOB HOLT
NEWJERSEYNEWSROOM.COM

Rutgers University President Robert L. Barchi has announced the cancellation of the school’s contract with Adidas because of allegations that the company denied severance pay to overseas workers.

The PT Kizone plant in Indonesia was closed down in 2011, and more than 2,800 employees lost their jobs.

According to philly.com, Adidas owes $1.8 million in severance pay to the workers. Nike and the Dallas Cowboys had also been involved with the factory, and have paid severance to the employees.

Students representing the Rutgers United Students Against Sweatshops had been protesting in the University bookstore for about ten days before Barchi responded. His letter said, according to The Daily Targum, “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, and Adidas’s actions are not in keeping with this expectation.”

Barchi said the school’s Trademark Licensing Office would work with the Collegiate Licensing Company to end Rutgers’ licensing agreement with Adidas.

Adidas had their own opinion of the situation. They said the factory had been “unethically closed and abandoned by its owner, not the by the Adidas Group” months after Adidas stopped placing orders there.

“We honored all terms of our contract, paying the factory owners every penny owed for the business we did,” Adidas said, according to NorthJersey.com. “We cannot assume the liability for the severance owed by the former owner of PT Kizone who violated Indonesian law and fled.”

Rutgers took in about $11,000 in fees from Adidas last year for its school apparel.

The Seattle Times reported that the University of Washington has also severed their agreement with the company, becoming the fourth university to take such action. Cornell University will also not be renewing with Adidas, along with Oberlin College. And the University of Michigan is reviewing their $60 million contract with Adidas.

 

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