Nike has agreed to provide more than $1.5 million in pay and benefits to 1,800 workers at two apparel factories in Honduras. Employees there lost their jobs when two subcontractors closed the factories in January 2009 and failed to pay severance. The company's action comes after several universities ended or threatened to end their licensing relationships with Nike, and as pressure was building from the nationwide group United Students Against Sweatshops.
According to The New York Times, a Nike spokeswoman says the $1.54 million is for "a worker relief fund" and not severance pay. Nike also agreed to provide vocational training and finance health coverage for laid-off workers.
"This may be a watershed moment," Scott Nova, executive director of the Worker Rights Consortium, a group of 186 universities that monitors factories that make college-logo apparel, told The Times. "Up until now, major apparel brands have steadfastly refused to take any direct financial responsibility for the obligations to the workers in their contractors' factories. Now the most high-profile sports apparel firm has done just that."
Nike's controversial treatment of overseas workers has been an issue for years.