The University of Wisconsin-Madison is ending a licensing agreement with Nike because the university says the company has not addressed labor issues with factories in Honduras that make licensed clothing for colleges.
Nike isn't the major apparel provider for UW sports. Adidas holds a contract that's worth about $1.2 million a year that provides uniforms, athletic equipment and other resources to the school. Nike sells retail apparel, such as hats and T-shirts, which brought the school $49,000 in royalties during the past school year. Adidas also has a contract to sell licensed apparel.
This is the third smaller apparel contract that the university has ended in the past two years. Chancellor Biddy Martin said she was severing ties with Nike amid complaints about two factories in Honduras that were closed in January 2009 by Nike subcontractors.
Workers argued that more than 1,800 employees didn't receive more than $2 million in severance that they were due, according to the university. Martin was the first university chancellor to write Nike, asking for the company to resolve the dispute.
"Nike has not developed, and does not intend to develop, meaningful ways of addressing the plight of displaced workers and their families in Honduras," Martin said in a statement Friday. "It has not presented clear long-range plans to prevent or respond to similar problems in the future. For this combination of reasons, we have decided to end our relationship for now."
In a statement issued Friday evening, Nike said it regrets the university's decision but that the two factories, Hugger and Vision Tex, were subcontractors of two other factories, Anvil and New Holland, which were paid in full for orders taken from Nike.