UW-Madison statement regarding dismissal of adidas suit

The University of Wisconsin–Madison has agreed to dismiss its lawsuit against adidas seeking declaratory relief over the company’s obligation to pay severance to Indonesian factory workers.

The university’s decision is based on the results of the settlement agreement reached last month between adidas and the labor union representing the PT Kizone. 

Representatives of the labor union have expressed unequivocal support for the settlement. The Worker Rights Consortium (WRC), of which the university is an affiliate, has welcomed the settlement and expressed optimism that it fully resolves the issues.

Heading into the litigation last July, UW–Madison Interim Chancellor David Ward identified two goals – convincing adidas to contribute direct monetary compensation to the workers, and defending the integrity of the Labor Code of Conduct – as the key outcomes of the suit.  “Both of these objectives have been accomplished through the settlement with adidas,” says Ward, who has overseen the university’s involvement in the dispute during his two-year term as interim chancellor.

Ward also noted that the result validates the university’s chosen process. When presented with a recommendation to terminate the university’s contracts with adidas, a university sponsor and licensee, Ward opted instead to engage with adidas in order to elicit a response from the business partner that would remediate the situation and meet the university’s expectations.  While noting the university’s significant contributions in the area of socially responsible manufacturing, Ward adds that “As a matter of contract and business practice, the university ought not move presumptively toward termination of contracts for breaches of material conditions, but rather work with the partner to cure the identified failures in performance.”