Nike to Pay $1.5MM To Assist Laid off Honduran Workers

“Nike and CGT are concerned for the workers in Honduras
and have agreed to take important steps to support former employees of
Hugger and Vision Tex,” the statement said. “Through this agreement, Nike will contribute
to a workers relief fund of $1.5 million to be administered jointly by
CGT, the Solidarity Center, the Worker Rights Consortium and
supervised by professor Lance Compa of Cornell University.”

Nike will said it will work with its Honduran suppliers to
offer vocational training programs and to prioritize hiring of former
Hugger and Vision Tex 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, whichever comes first.

“Nike and CGT are pleased to have worked together to
create a resolution that helps the former Hugger and Vision Tex workers
in Honduras to receive needed financial and medical support,” the statement concluded. “Nike and
CGT are committed to working together, in conjunction with other
stakeholders in Honduras, to develop long-term, sustainable approaches
to providing workers with social protection when facing unemployment.”

A Nike spokeswoman, Kate Meyers, said the $1.5 million was
for “a worker relief fund” and not for severance.

“This is certainly one of the most significant successes of
universities in their labor rights efforts,” Scott Nova, executive
director of the Worker Rights Consortium, a group of 186 universities that
monitors factories that make college-logo apparel, told The New York Times. “This may be a watershed
moment. Up until now, major apparel brands have steadfastly refused to take any
direct financial responsibility for the obligation to the workers in their
contractors' factories. Now the most high-profile sports apparel firm has done
just that.”

After worker complaints, the Workers Rights Consortium
prepared a report for more than 100 American universities that found that the
subcontractors had failed to pay more than $2 million in severance owed under
Honduran law.

United Students Against Sweatshops
launching a
campaign adopting the slogan, “Just Pay It” and held protests at dozens of Niketown stores and Nike
retailers. Alleged laid-off Honduran workers were brought to rallies on
campuses. Similar actions let Russell Athletic to  reopen a closed plant in Honduras early last year.

The University of Wisconsin in early April canceled its licensing agreement
with Nike, becoming the first university to take that step over
concerns over a Nike contractor's treatment of workers in Honduras.

On April
20, Nike issued a statement saying that it was disappointed that the
subcontractors had not paid the severance, but added that “it remains Nike's
position that factories which directly employ workers are responsible for
ensuring that their employees receive their correct entitlements, and as such
Nike will not be paying severance to workers that were employed by Hugger and
Vision Tex.”

Cornell University vowed in early July that without “significant
progress” in resolving an ongoing labor dispute in
Honduras, it would end its licensing agreement
with Nike by the close of the year. The University of Washington was also exploring the issue but never gave an ultimatum.

United Students Against Sweatshops estimated that Nike's
total payments, including those for health coverage and worker training, would
exceed $2 million.