Nike, Inc. pledged to pay $1.5 million to help 1,800 workers in Honduras who lost their jobs when two subcontractors closed their factories. The agreement comes after several universities and a labor group, United Students Against Sweatshops (USAS), pushed Nike to pay some $2 million in severance that the subcontractors had failed to pay. The two factories – Vision Tex and Hugger de Honduras – were closed in January 2009. Nike, at one point, subcontracted apparel production from the facilities but had contended that the factories' owners were responsible for the workers' severance.


In a joint statement with the union representing former employees, Nike said it will contribute $1.5 million to a workers relief fund. Nike will also work with suppliers to offer vocational training programs and to prioritize hiring of former Vision Tex and Hugger workers as jobs become available over the next two years. Nike will also cover worker's enrollment in the Honduran Institute of Social Security (IHSS) to obtain health care coverage for a year or until they find new employment.


After a Workers Rights Consortium report charged that Nike was liable for the severance, USAS last year launched protests on college campuses and at Nike retailers under the “Just Pay It” slogan. The University of Wisconsin in early April became the first university to cancel its licensing agreement with Nike over the issue. Cornell University and the University of Washington also threatened to cancel their contracts.


Nike spokeswoman Kate Meyers said NKE is “certainly conscious as the largest sporting brand that making a statement like this is significant.”  But she contended the payment represents a relief fund donation and does not cover any severance liability.