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University should sever contract with Adidas
Last week, the Georgetown Licensing and Oversight Committee recommended that the University sever the tennis team’s contract with Adidas. In September, Georgetown Solidarity Committee delivered its second letter to President DeGioia encouraging the University to end the Adidas contract in protest of the company’s treatment of workers. The University should abide by the LOC’s recommendation and continue to be mindful of the labor practices of the companies with which it does business.
GSC inaugurated the campaign last spring, after Adidas made it clear that they would not give severance pay to the workers laid off when the PT Kizone factory in Tangerang, Indonesia, closed. Adidas subcontracted to the factory to produce its university sports apparel, and when it closed, Adidas refused to take financial responsibility for the workers’ severance.
According to GSC’s original letter, this decision violates the University’s Code of Conduct for Licensees—not to mention Indonesian law. The Code of Conduct requires all contractors to pay terminal compensation.
In an email sent to Vice President of Federal Relations Scott Fleming, Adidas representative Gregg Nebel wrote, “At the end of the day, what we intend to do with relief aid through PT Lidi could cost hundreds of thousands but it will be spent for the most relevant and expedient needs.”
It is not company policy to pay severance to workers who are laid off after their contract ends with the factory. However, Adidas has a responsibility to its workers. At a minimum, it should ensure that they are afforded a modicum of financial stability in the wake of an unpredictable, mass termination such as this. It should make no difference that these workers are subcontracted, rather than directly employed by Adidas.
The termination of Georgetown’s Adidas contract could encourage other universities to sever their ties with the company, a domino effect that would exert incredible pressure on the company to change its business practices.
In 2009, the University was one of the first schools to sever its contract with Russell Apparel, pursuant to a similar GSC campaign. Soon after, over 100 universities followed suit. The company ended up rehiring the scores of workers who were laid off after Russell’s Jerzees de Honduras closed its doors.
As a Jesuit institution, Georgetown has a responsibility to pressure its business partners to use fair labor practices and only invest in socially responsible enterprises. That starts with the University increasing transparency in its business dealings and publishing the full contents of its investment portfolio so that potentially unethical practices can be scrutinized. Practicing social justice in its business relationships is the least Georgetown can do to further workers’ rights.