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Michigan unhappy with how Adidas handled worker’s rights in Indonesian factory dispute

May 1, 2013, 12:12 PM EDT

Michigan Media Day Basketball

A number of college and universities that have apparel contracts with Adidas, including two of their most well-known clients in Michigan and Wisconsin, have taken issue with the clothing company, according to a report from Kristi Dosh of ESPN.com.

The issues centers around the closing of an Indonesian factory called PT Kizone, and the Workers Rights Consortium (WRC) has gotten involved.

According to a report that the WRC produced, in September of 2010, the violations committed by PT Kizone began when they stopped making compensation payments to employees after they left the factory. Three months later, in December, the factory failed to pay their current employees. The owner of the factory then fled the country, and after another company purchased the factory in March of 2011, it was finally closed and declared bankrupt that April.

Here’s where Adidas, who, along with the Cowboys and Nike, had a contract with the factory, comes into the equation:

The WRC, United Students Against Sweatshops (USAS) and other worker rights advocacy groups claimed adidas was refusing to pay $1.8 million in legally mandated severance owed to the 2,800 workers of PT Kizone. Total severance and other pay due under Indonesian law to the workers, who had no advance notice of the factory’s closure, totaled $3.3 million. Both Nike and the Dallas Cowboys contributed partial severance, but for nearly two years, adidas has maintained it does not owe any of the monies.

Michigan, who is as big of a brand name as there is in collegiate athletics, is in the middle of a 10-year, $60 million contact with Adidas signed in 2007. They threatened to reexamine their contract if this situation wasn’t handled, and on April 24th, Adidas reached a settlement with PT Kizone.

Adidas has made waves over the course of the past two college basketball postseasons by giving the programs that they sponsor fancy new uniforms to wear.

It started last March when they gave the likes of Baylor and Louisville fluorescent uniforms to wear during their conference tournaments. It continued this season, as the apparel company gave their six biggest accounts new uniforms to wear during the season that looked an awful lot like zubaz.

You can find Rob on twitter @RobDauster.

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