Penn State resumes Adidas pact for apparel

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Though the amount was not disclosed, a deal struck over severance pay owed to Indonesian workers by a former Adidas subcontractor was enough for Penn State University to allow the apparel maker to resume producing products bearing the school's logo.

Penn State had suspended its contract with Adidas on March 13, citing issues related to a factory closure in 2011 that included what Penn State said was the subcontractor's failure to give about 2,600 workers severance pay owed to them under Indonesian law.

At the time, Penn State president Rodney Erickson said Adidas had 60 days to resolve the matter or the contract would be terminated. But he and other campus officials now say the matter was effectively resolved by the deal covering workers laid off from the PT Kizone factory.

"We are pleased that Adidas has recognized the former workers' plight, heard our concerns, and the concerns of others," Mr. Erickson said in a statement posted on the university's website.

Via email Wednesday, he said his understanding was the workers were owed $1.8 million, and that while terms were not disclosed, the agreement involved a "substantial" payment.

Katja Schreiber, a Portland, Ore., spokeswoman for Adidas Group, one of several firms licensed to produce Penn State products, said her company had ended its relationship with the subcontractor by the time the factory closed. The firm said the settlement is in addition to $525,000 in aid earlier provided.

Worker advocates said the Penn State moves were part of a larger effort by groups including universities to pressure the manufacturer.

Scott Nova, executive director for the Washington, D.C.-based Worker Rights Consortium, called the deal a substantial step forward but added, "We can not opine definitively on it because the information is not available."

Mr. Erickson said campus employees and students hold limited sway over garment worker conditions abroad. Nevertheless, he said, "We will continue to work together, as a university community, to help ensure that the workers who produce apparel in our name do so under fair conditions and with fair compensation."

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Bill Schackner:, 412-263-1977 and on Twitter: @BschacknerPG.


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