Garment Unions Urge Adidas to Dedicate Some Yeezy Proceeds to ‘Harmed’ Workers

Jasmin Malik Chua
·7 min read
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As Adidas prepares to divest itself of shoes from its scuppered Yeezy partnership with the rapper formerly known as Kanye West, funneling some of the proceeds to organizations battling the type of racist rhetoric he espoused, labor campaigners urge it not to forget the workers in its supply chain who suffered wage loss during the pandemic.

“We, the undersigned unions, have read your recent announcement regarding Adidas’ decision to sell Yeezy shoes and donate the profits to organizations combating discrimination and hate,” wrote the Bangladesh Garment and Industrial Workers Federation, the Coalition of Cambodian Apparel Workers Democratic Union, Sri Lanka’s Free Trade Zones & General Service Employees Union and North America’s Workers United, on behalf of the Pay Your Workers–Respect Labour Rights (PYW-RLR) union committee, in an open letter to Adidas CEO Bjørn Gulden on Tuesday. “We welcome this decision, but knowing the high value that the Yeezy shoes represent, we urge you to also consider dedicating a small amount of the proceeds to the workers harmed in the process of producing these shoes.”

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The German sportswear giant had cut ties with West, who now goes by Ye, in October after the artist made a deluge of antisemitic rants and donned a shirt bearing a white supremacist slogan identified as hate speech. This left Adidas with $1.3 billion in tainted Yeezy inventory, a major dent in its bottom line, a class-action lawsuit and no clear course of action. Earlier this month, the Stan Smith maker said that it would sell off the shoes and donate a “significant amount” of the proceeds to the Anti-Defamation League; the Philonise & Keeta Floyd Institute for Social Change, which was founded by George Floyd’s family after his murder; and projects “aimed at combating discrimination and hate through sports.”

While Ye will still receive previously agreed commissions of up to 15 percent per shoe sale, according to media reports, meaning he could reap roughly $143 million when all is said and done, Gulden called this the “best solution” because it “respects the created designs and the produced shoes, it works for our people, resolves an inventory problem, and will have a positive impact in our communities.” He said that there is “no place in sport or society for hate of any kind” and that Adidas remains “committed to fighting against it.”

Activists have demonstrated tirelessly for months, marching in picket lines, disrupting events, and, on one memorable occasion, spoofing the brand on the runway at Berlin Fashion Week, to call on Adidas to take responsibility for rights violations by its suppliers. They say that one Cambodia manufacturer laid off 1,000 workers without paying them the $3.6 million they were owed in 2020, while another eight deprived more than 40,000 workers of $11.7 million during the April-May 2021 national lockdown. In Indonesia, they add, hundreds of PT Panarub employees who churned out World Cup gear received only half their wages between June and August 2020 as a result of falling orders.

“Workers, including those producing shoes for Adidas, have suffered greatly during the Covid pandemic,” the letter said. “We tried to negotiate with our employers to receive our back wages and owed severance, but on top of everything, repression of basic trade union rights is also increasing.”

Adidas did not respond to a request for comment, though it previously told Sourcing Journal that it rejects the allegations.

“Throughout the pandemic, Adidas has been committed to ensuring fair labor practices, fair wages and safe working conditions throughout our global supply chain,” a spokesperson said in March. “We continued to uphold our standard manufacturing terms, including worker rights protection. Ensuring business continuity and a functioning supply chain has kept workers in jobs. We continued to be committed to ensuring legal compliance in terms of pay and benefits for all workers and tracked the working conditions in each and every factory.”

#PayYourWorkers, the widely endorsed activist campaign that the PYW-RLR union committee sits under, wants Adidas to funnel part of the Yeezy shoe sales to a 10-year commitment to the legally binding Pay Your Workers—Respect Labour Rights agreement, which includes signing onto a severance guarantee fund that ensures no worker is left in limbo. If the shoes are indeed valued at roughly $1.3 billion, Adidas’s share of the annual fee estimated for the agreement would amount to less than 3 percent of the sum, it said.

“Severance theft is a long-standing problem in the garment, footwear and textile industry, and the current financial and economic crises in many of our countries mean that workers continue to be at risk of losing their jobs without their legally owed compensation and being driven even further into poverty and debt,” the letter said. “The PYW-RLR agreement would ensure that workers in Adidas’s supply chain are no longer left destitute when their factories shut down or carry out mass layoffs without paying terminal compensation. The agreement also foresees a mechanism to investigate and address violations of the right to organize and bargain collectively, so that we can have stronger and better industrial relations.”

Michelle Gabriel, director of the sustainable graduate program at Glasgow Caledonian New York College, said that the decision to ultimately sell Yeezy goods and be “vaguely charitable” with the money tracks with what she called Adidas’s “ethically grey strategy,” including its decision to partner with Ye despite several red flags about his fractious and impulsive behavior. She said that its brand identity’s alignment with concepts such as “sustainability” and “social good” means that the triple-stripe firm can’t burn the merchandise and take the write-off, or divert them to a global South dumpsite and take a different write-off, without hurting its brand perception.

“However, we should look this move in the face and be direct with our assessment: this is the path with the potentially highest profit potential not just for Adidas but for Ye,” she said. “A few years back, this may not have been the issue it is today for Adidas, largely because the positions many fashion brands are building, including Adidas, are predicated on vague ideas of ‘doing better,’ ‘sustainability,’ and ‘social good.’ In a crowded market with everyone competing for the same pie for essentially the same range of goods, sustainability and social impact sells.”

Experts, such as Kate A. Larsen, founder of the sustainability consultancy SupplyESChange, said that Adidas donating to a severance fund makes sense, given that businesses will soon be expected to contribute to the remediation of rights violations as part of looming mandatory due diligence legislation in the European Union and elsewhere.

“Such contributions would show, publicly and with transparency, that companies responded to the voices of rights-holders, as due diligence expects, and contributed to support the rehabilitation of livelihoods where most needed,” she said.

But whether Adidas will want to do so despite its eagerness to be seen to be “doing something good” with the proceeds, won’t be a straightforward decision, said Neil Saunders, managing director of GlobalData Retail, a retail research agency and consulting firm.

“The slight issue is whether Adidas wants to commit to anything that represents a tacit admission that there are issues within its supply chain,” he said. “Adidas might also have concerns around engaging with the union directly as it is akin to bargaining around conditions and terms within the supply chain.”

Gabriel also wondered if such an agreement, in and of itself, is sufficient, considering that brands have few legally enforceable liabilities to garment workers across a diffuse and fragmented value chain.

“My concern that is without more legally enforceable mechanisms—ideally in the form of a range of necessary global and local legally enforceable policies—the inequity illustrated between Adidas and the garment workers undersigned in the letter will remain endemic with few mechanisms beyond public pressure campaigns to remedy,” she said. “And that just isn’t enough to shift behaviors across one of the largest global industries.”

Even so, the PYW-RLR union committee said that it’s open to ideas, particularly from Adidas, which it called the “decision-maker at the top of the supply chain.” It suggested that previous negotiations have gone nowhere.

“As you know, there have already been three meetings between your company representatives and the PYW-RLR union committee,” the letter said. “We believe the current situation regarding Yeezy shoes provides a unique and crucial opportunity to advance the conversation, and to reach [an] agreement quickly.”

Now, the unions said, it’s time for “the next step” and to “extend the remediation to those who made the products that are now being sold for charity.” Only then, they said, can Adidas ensure that “this gesture to do good is not rooted in another injustice.”