As questions continue to surface about Adidas’s treatment of factory workers overseas, Cornell University has become the first U.S. university in history to sever business ties with the sportswear manufacturer over labor rights. In a letter to Adidas earlier this month, Cornell President David Skorton expressed “great concern” about reports that the company owed more than $3 million in severance pay to 2,800 workers after the illegal closure of a factory in Indonesia in April 2011.

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“We believe that severance is a basic worker’s right, as is a living wage, freedom of association and safe working conditions,” wrote Skorton. “We are calling on the collegiate apparel industry to develop mechanisms whereby brands can be assured that the factories with which they do business have on hand sufficient and secured funds to pay workers what they are owed should a factory close. This gap in the apparel industry’s approach to worker rights is a critical issue that demands immediate attention.”

“We believe that severance is a basic worker’s right, as is a living wage and safe working conditions,” Cornell president David Skorton says.

Skorton added that Cornell is wiling to resume business with Adidas if the company addresses the workers’ severance issues.

Adidas has maintained that the PT Kizone factory was abandoned by its owner, not by Adidas. “We honored all terms of our contract, paying the factory owners every penny owed for the business we did,” Adidas has said. “In turn, we cannot assume the liability for the severance owed by the former owner of PT Kizone who violated Indonesian law and fled.”

Labor-rights campaigners such as the Clean Clothes Campaign argue, however, that Adidas is bound by licensing codes of conduct to ensure the same level of compliance at contracted factories as it does directly owned facilities.

After the factory closed, Adidas worked with PT Lidi, a human resources consultancy, help 1,200 former PT Kizone workers find new jobs over the summer. It also launched a program that distributed $250,000 in food vouchers to former workers, a move that union representatives called “insulting.”

Students at the the University of Wisconsin-Madison have also campaigned for their university to drop its $11 million sponsorship agreement with Adidas.

+ Cornell University