Adidas pledges new efforts for Hermosa workers

In response to a request from UW–Madison Chancellor John Wiley, the adidas Group is pledging new efforts to curb labor "blacklisting" and to help secure jobs for the former workers of one of its subcontractors.

Over the past month, Wiley has engaged in continuing discussions with the company in an effort to resolve outstanding issues of back pay and new employment for former workers of the now-closed Hermosa Manufacturing, an apparel producer located in Apopa, El Salvador.

When the factory, which contracted with adidas between 2000-02, was closed in 2005, 260 workers were dismissed without receiving $825,000 in back pay or severance. During its time contracting with Hermosa, adidas paid its obligations to workers, but the funds were embezzled by the local factory owner, who is currently being prosecuted in El Salvador.

Additionally, the 63 workers who associated with a union at the plant may have been put on a "black list" for their activism and denied new employment in the region.

Upon completion of an April on-site review by UW–Madison acting director of community relations Dawn Crim, Wiley and the university’s Labor Licensing Policy Committee, (LLPC) called on the company to show new progress addressing those issues.

In response, adidas North America President Patrik Nilsson and Gregg Nebel, director of Social and Environmental Affairs, have agreed to relaunch a rehiring effort for the workers affected by the Hermosa closing by sending them a letter encouraging them to reapply to nearby Partex and Chi Fung factories, or other factories in which adidas has subcontracting work.

Adidas will ask that factories place a priority on rehiring competitively qualified former Hermosa workers due to possible black listing and the length of their unemployment. Adidas has also committed to re-communicating with each of its local suppliers in El Salvador that it will not tolerate black listing of any job candidates.

To prevent future abuses, the company plans to set up a local hotline which workers can confidentially report issues of blacklisting and other labor discrimination or abuse to an independent monitoring organization.

To address wage and pay issues, adidas has intervened with the El Salvadoran government and is pursuing additional discussions with the United States government on the matter. UW–Madison will lend its voice to that effort, Crim says.

"We’re grateful to adidas for providing an appreciable, detailed reemployment plan for the former Hermosa workers, as well as a long term strategy to curtail blacklisting with its local suppliers," says Crim. "Our continued engagement with this company has been productive. We will continue to monitor progress on this issue in the future."

At its May 18 meeting, members of the LLPC asked Crim to continue to work with adidas over the summer in an effort to set benchmarks for progress on rehiring and recovery of back and severance pay.

UW-Madison has pursued the Hermosa issue on multiple levels, including Crim’s trip and recent discussions between Wiley, Crim, Nebel and Paul Ehrlich, adidas vice president of business affairs and general counsel North America. In addition, Wiley and Crim have been directly engaged with Nilsson over the past month.

UW-Madison contracts with adidas to provide uniforms and athletic equipment, and the company is a university licensee. The current deal runs through 2011 and is worth approximately $1.2 million annually, mostly coming in the form of clothing and equipment.