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adidas lawsuit (re University of Wisconsin)

Plaintiffs are the University of Wisconsin trustees who allege Adidas failed to comply with contractual provisions regarding severance pay in their Indonesian factory. Defendants argue while benefits are owed to the workers, they are not obligated to pay. The case settled, with defendants agreeing to pay severance to the workers.

 

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

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