Nike (NKE) Settles Honduras Dispute; ‘An Important Step,’ Says PSU Spokesman

Nike has agreed to pay $1.54 million to 1,500 workers laid off last year from two Honduran factories, the Worker Rights Consortium announced Monday.

The now-defunct factories, known as Hugger De Honduras and Vision Tex, manufactured some Penn State-branded goods and a variety of other branded products. 

Penn State had urged Nike to ‘play a positive role in assisting’ the workers who were axed when the factories closed in 2009, university spokesman Geoff Rushton has said.

Reached Monday, Rushton called the $1.54 million agreement ‘very positive news and an important step.’

‘We will … continue to receive updates on and monitor the implementation of the agreement,’ Rushton wrote in an e-mail message.

Hugger De Honduras and Vision Tex served as subcontractors for Nike before closing about 16 months ago. Under Honduran rules, the workers were owed mandatory severance pay, but the factory operations had failed to compensate them appropriately, according to the Worker Rights Consortium.

Two universities — Cornell and the University of Wisconsin at Madison — elected to end their Nike licensing agreements as a result of the matter, Inside Higher Ed reported.

Like Penn State, the University of Wisconsin is a Big Ten school, and both have had substantial agreements with Nike for years.

‘Apparel brands have long denied any direct financial responsibility to the workers in their contract factories,’ Scott Nova, executive director of the Worker Rights Consortium, said in a prepared statement. ‘Nike’s decision (to pay the Honduran workers) is an important break from that position. It is a turning point for worker rights in the apparel industry.

‘Nike has now charted a course that other brands may increasingly be expected to follow,’ Nova said.

Penn State-branded merchandise and goods are made in dozens of factories around the world, according to the Worker Rights Consortium. The Washington, D.C-based group, of which Penn State is a member, monitors working conditions globally.

Earlier coverage: Nike (NKE) Urged By Penn State To Play ‘Positive Role’ For Honduran Workers