adidas lawsuit (re University of Wisconsin)

Women in garment factoryOn 13 July 2012, the University of Wisconsin trustees filed a lawsuit against adidas in US federal court alleging breach of contract.  The university charges that adidas failed to comply with contractual provisions regarding labour rights in sponsorship and licensing agreements requiring adidas to provide legally mandated benefits to workers who produce goods bearing the university logo.

According to the pleadings, workers at the defendant’s supplier factory in Indonesia – PT Kizone – have been seeking $3 million in severance pay and other benefits since the factory shut down its operations in April 2011.  The Indonesian supplier allegedly failed to pay workers’ wages since September 2010.  The plaintiffs allege that adidas is contractually obliged to pay up to $2 million to the workers.  Adidas does not dispute that benefits are owed to the workers, but it argues that the contract does not require it to provide for unpaid benefits of its contractor. 

In April 2013 adidas announced that it would pay severance to 2700 Indonesian workers.

- "Adidas Agrees to Pay Severance to Workers", Christopher Yates, Cornell Daily Sun [USA], 25 Apr 2013
- “University of Wisconsin Launches Historic Challenge to Adidas over Sweatshop Conditions for College-Branded Apparel”, Jonathan Rosenblum, Center for Media and Democracy's PR Watch, 14 Jul 2012
- “Campus Connection: UW-Madison seeks court’s opinion on Adidas situation, Todd Finkelmeyer”, Capital Times, 13 Jul 2012

- adidas: [PDF] Response to University of Wisconsin re workers in Indonesia, 2 Feb 2012

- [PDF] Board of Regents of the University of Wisconsin System v Adidas America, Inc. [Complaint for Declaratory Judgment], 13 Jul 2012

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Article
9 June 2013

[PDF] Corporate Legal Accountability Quarterly Bulletin – Issue 9, June 2013

Author: Compiled by Business & Human Rights Resource Centre

Welcome to the 9th issue of the Corporate Legal Accountability Quarterly Bulletin. To assist all those following corporate legal accountability issues, we send this bulletin to highlight key developments, new cases profiled on our site, updates to existing profiles, and other news. Our Corporate Legal Accountability Portal is an online information hub providing resources for non-lawyers as well as lawyers – including victims, advocates, NGOs, businesspeople, lawyers bringing lawsuits against companies and lawyers defending companies. The portal provides impartial, concise information about lawsuits against companies in which human rights abuses are alleged – its aim is to demystify these lawsuits. Each case profile includes materials from both the plaintiffs and defendants, to the extent they are available.[Refers to adidas, Agua Mineral Chusmiza, Alstom, Areva, BASF, BP, CACI, Chevron, Chiquita, Drummond, DynCorp, ExxonMobil, HudBay Minerals, Monterrico Metals (part of Zijin), Rio Tinto, Shell, Tate & Lyle, Texaco (part of Chevron), Titan (now L-3), Vedanta Resources, Veolia Transport (part of Veolia Environnement)]

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Article
25 April 2013

Adidas Agrees to Pay Severance to Workers [Indonesia]

Author: Cornell Daily Sun [USA]

After facing mounting pressure from numerous universities...Adidas has agreed to pay severance to 2,700 Indonesian factory workers, the Cornell Organization for Labor Action announced...This marks a significant policy change for Adidas, which previously had refused to pay $1.8 million in severance allegedly owed to the workers of the PT Kizone supplier factory under Indonesian Labor Laws, according to Karen Li ’15, a member of COLA...Though the specifics of the settlement are still confidential, Li described it as “substantial” and said the union representing the workers “are very satisfied with the settlement.” “This is a monumental victory,” Li said. Workers at the factory, which created collegiate apparel, were laid off two years ago and denied severance, according to Li.

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Article
29 October 2012

[PDF] Corporate Legal Accountability Quarterly Bulletin - Issue 7

Author: Business & Human Rights Resource Centre

[Full text of October 2012 issue of the Corporate Legal Accountability Quarterly Bulletin. Refers to lawsuits against adidas, Amesys (part of Bull), Anadarko, Anglo Platinum (part of Anglo American), Areva, Blackwater, BP, CACI, Cameron International, Chevron, Copper Mesa Mining, Curacao Drydock, DynCorp, Esmor Correctional Services (part of Correctional Services Corporation), Ford, Global Horizons, Halliburton, L-3, PA Child Care, Paladin, Shell, SNCF, Texaco (part of Chevron), Transocean.]

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Article
14 July 2012

University of Wisconsin Launches Historic Challenge to Adidas over Sweatshop Conditions for College-Branded Apparel

Author: Jonathan Rosenblum, Center for Media and Democracy's PR Watch

The University of Wisconsin Board of Regents…filed a precedent-setting breach of contract claim against sportswear brand Adidas, after the company failed to comply with anti-sweatshop provisions requiring they provide certain benefits to workers who produce goods that bear the mark of the university. This is the first time a U.S. university has sought to enforce a global anti-sweatshop code of conduct in a U.S. court of law…Workers in an Indonesian factory have been seeking more than $3 million…since a contractor working for several U.S. brands abruptly shut down operations…Adidas does not dispute that benefits are owed but "has asserted that the Contract does not require it to guarantee the unpaid benefits" of a contractor. CMD [Center for Media and Democracy] will publish a more detailed account of the action during the coming days.

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Lawsuit
1 January 2001

adidas lawsuit (re University of Wisconsin)

Author: Business & Human Rights Resource Centre

On 13 July 2012, the University of Wisconsin trustees filed a lawsuit against adidas in US federal court alleging breach of contract.  The university charges that adidas failed to comply with contractual provisions regarding labour rights in sponsorship and licensing agreements requiring adidas to provide legally mandated benefits to workers who produce goods bearing the university logo.

According to the pleadings, workers at the defendant’s supplier factory in Indonesia – PT Kizone – have been seeking $3 million in severance pay and other benefits since the factory shut down its operations in April 2011.  The Indonesian supplier allegedly failed to pay workers’ wages since September 2010.  The plaintiffs allege that adidas is contractually obliged to pay up to $2 million to the workers.  Adidas does not dispute that benefits are owed to the workers, but it argues that the contract does not require it to provide for unpaid benefits of its contractor. 

In April 2013 adidas announced that it would pay severance to 2700 Indonesian workers.

- "Adidas Agrees to Pay Severance to Workers", Christopher Yates, Cornell Daily Sun [USA], 25 Apr 2013
- “University of Wisconsin Launches Historic Challenge to Adidas over Sweatshop Conditions for College-Branded Apparel”, Jonathan Rosenblum, Center for Media and Democracy's PR Watch, 14 Jul 2012
- “Campus Connection: UW-Madison seeks court’s opinion on Adidas situation, Todd Finkelmeyer”, Capital Times, 13 Jul 2012

- adidas: [PDF] Response to University of Wisconsin re workers in Indonesia, 2 Feb 2012

- [PDF] Board of Regents of the University of Wisconsin System v Adidas America, Inc. [Complaint for Declaratory Judgment], 13 Jul 2012