For months, students around the country have been putting pressure on their universities to cut ties with Nike over what they describe as unfair labor practices within the company’s factories.
Last December, 17 Georgetown students took part in a sit-in in the office of the president to demand that the university end its licensing agreement with Nike at the end of 2016, when it was set to expire. One particular sticking point was that Nike would not allow the Worker Rights Consortium (WRC), an independent monitoring group, into its factories. As a result of the protest, Georgetown did not renew the contract which meant it stopped ordering university-branded Nike apparel.
Similar scenarios have been unfolding at universities across the country. Last May, the University of California Berkeley switched its sponsorship from Nike to Under Armour in a 10-year agreement worth $86 million. One condition of the new contract was that licensees “give the University or its Licensing Agent(s) and/or NGOs free and full access to all facilities, materials, and records that may be relevant to such investigation.” And just a few months ago, Northeastern University allowed its licensing contract with Nike to expire until the brand commits to “timely, expeditious, and unrestricted access for the university designated monitor, the Worker’s Rights Consortium.”
But the tide might be turning, with a major concession by Nike as part of a new deal that demonstrates the clout of university athletic systems and the impact of student protests. After months of discussions, Nike and Georgetown have negotiated a new retail licensing agreement that allows the WRC formal access to collegiate licensing factories whenever there are reports of problems. This is a breakthrough, since student protests have often focused on Nike’s resistance to letting independent monitors enter factories.
To settle their differences, Georgetown brought in an expert mediator, Don Edwards, CEO of the Justice and Sustainability Associates, who helped the university, Nike, and the WRC talk everything out and arrive at a new contract. A team led by Nike’s COO, Eric Sprunk, participated in the conversation, and reported directly to CEO Mark Parker.
“I think it’s fair to say that we weren’t in a good place collectively at the beginning of the summer,” says Hannah Jones, Nike’s chief sustainability officer and VP of Nike Innovation Accelerator, who was intimately involved with the negotiation. “There had been a breakdown in trust and communication. We had spent too much time responding to one another by letter, instead of sitting in a room together to reset and talk things out.”
To seal the deal, Nike demanded that the WRC keep ongoing investigations confidential to give the company an opportunity to fix potential problems. The monitoring group also agreed to continue to list of all the brands that are making products at a given factory. “There’s a period of time in which confidentiality is critical,” says Jones. “It is important that when they do talk about it in the public, to remain objective and neutral, rather than conflictual.”
(Update: The WRC disputes some of the ways that Nike characterized the deal. Scott Nova, executive director of the WRC writes: “The protocol calls for us to give Nike “reasonable notice” before publication of findings, but the findings are never kept confidential from workers and their representatives, and the WRC maintains the right to publish at any point we deem necessary, without advance notice, if we conclude that violations are of great urgency.”)
From the WRC’s perspective this is a big win. “We’re obviously pleased with the creation of this protocol because it gives us the access we need inside these collegiate factories,” says Scott Nova, executive director of the WRC. “That’s important because the WRC is the monitor that operates globally entirely independently of the brands. We receive no corporate funding and no governance by the brands.”
The deal also requires Nike to abide by a set of labor code standards laid out by IMG College Licensing, a body that helps many universities manage their licensing agreements. Often universities have their own particular code of conduct for licensees, but Nike has argued that is is not feasible for it to abide by a wide range of labor codes stipulated by dozens of partner institutions across its more than 500 factories worldwide.
This agreement represents a new model, in which a third party–in this case, IMG College Licensing–creates a standard that all parties can work with, one that other universities may emulate. “We hope that this sets a benchmark for how we can operate with colleges across our licensing base,” says Jones. “The protocol gives clarity to everybody, which makes this scalable and repeatable.”
The University of Texas, which has a licensing contract with Nike, has been observing these discussions closely. “These conversations between Georgetown and Nike have helped set up some protocols of how the WRC will work with licensees,” says Jeff Orth, the associate athletics director for strategic relations at the University of Texas. “I think it will help clarify procedure, but don’t want to overstate it’s impact. It’s an evolving scenario, as we look at the challenges we face with the factories, factory owners, the location and access to the factories, and the cultural matters that can come into play.”
Georgetown, for its part, was very committed to breaking through the gridlock. The president’s office led the discussion but it brought in student activists, who sat on a committee that had a voice at the table. “Georgetown has a long relationship with Nike that goes back 35 years,” says Meghan Dubyak, Georgetown’s associate VP for strategic communications and public affairs. “Our position was that if Georgetown just walked away, it would prevent our institution from having influence on the improvement of worker’s conditions.”
Though it represents a step forward, some experts have concerns about the contract. Ellen Staurowsky, a professor of sport management at Drexel University who was not privy to the discussions, is concerned that IMG College Licensing (IMGCL) may not be the best organization to establish a standardized code of conduct for brands to abide by. “The proof is going to be in the details,” says Staurowsky. “IMG has an enormous stake in this game in terms of their corporate interests, so one of the questions that will be raised is whether IMG is really a distinguishable third party.”
Staurowsky point out that IMGCL makes its money from licensing agreements and has been working with Nike for decades, so it is invested in ensuring that Nike is able to continue to work with universities.
That said, the WRC, which has seen IMGCL’s codes, finds them effective. “I can tell you the standards themselves are strong,” says Nova. “IMGCL’s codes are now binding instruments. The model of binding standards coupled with independent monitoring has helped create real improvements for workers at these factories.”
Ultimately, Staurowsky says this agreement has the potential to move the needle in terms of workers rights. “This agreement could potentially address the substantive issues about labor that have been concerns for decades,” she says. “Allowing the WRC to monitor these plants is a significant step forward. The fact that all of these parties are now putting on paper labor expectations that can be reviewed by the public is a big improvement.”
This contract may also have a positive impact on worker’s rights more broadly. “It’s such a mammoth task to get your arms around the constellation of factories around the world producing products for colleges,” says Michael Posner, director of the center of business and human rights at NYU Stern School of Business, and the board chair with the Fair Labor Association. “The fact that Georgetown and the WRC have agreed to this new protocol with Nike is a very useful supplement to what organizations like the Fair Labor Association are doing more broadly to tackle worker’s rights.”
* This story has been updated to include more context from the WRC.