New York City is jumping feet first into a business deal with the sneaker and apparel giant Nike, licensing NYC logos in exchange for a cut of sales — and a promise to be good to its workforce around the world.
The city Franchise and Concession Review Committee approved a two-year licensing agreement Aug. 14 that gives the shoe giant permission to brand their apparel with signature New York City iconography.
The license agreement gives 5% of Nike’s annual revenue on the branded merchandise to NYC & Company, the city’s tourism bureau, with a guaranteed minimum of $20,000 over the next two years.
Portland-based Nike can choose among logos of the NYPD, FDNY, Staten Island Ferry and many more — even the NYPD bomb squad. The company declined to comment about what NYC-branded products it envisions or when those items might hit store shelves.
NYC & Company will receive an unspecified quantity of NYC-branded Nike product to give away for promotional purposes. Nike approached the city with the idea, said Jane Meyer, a spokesperson for Mayor Bill de Blasio, who added that revenue will go toward the “cost of maintaining the licensing program.”
She also praised Nike as “a positive partner, recently donating a new turf field and a skate park to the Parks Department.” Those are located in Williamsburg and on the Lower East Side.
Tough Labor Rules
Nike — No. 90 on the Fortune 500 list — could make for an odd fit, and not just because de Blasio at a June Democratic presidential candidate debate said: “For all the American citizens out there who feel you’re falling behind…immigrants didn’t do that to you. The big corporations did that to you.”
Companies that contract with city government and its affiliates must follow stringently pro-labor rules.
Though it has rebranded itself in recent years as an ally of social justice movements, notably by signing on Colin Kaepernick as a pitchman, Nike has in the past come under fire for alleged unfair labor practices at international factories.
NYC & Company licensing partners must sign on to “Ethical Standards of the City of New York,” which include a requirement that “Vendors treat their employees with respect and dignity.” There’s also a union-friendly directive: “Employees should not be subject to intimidation or harassment as a result of the peaceful exercise of their legal right to join or to refrain from joining any organization.”
A leading watchdog of the footwear and apparel industry has found practices in the company’s factories that could clash with those requirements.
In the Fair Labor Association’s 2019 re-accreditation report on Nike, fair compensation and workers’ right to air grievances without retaliation topped the group’s list of concerns.
Past Protests in New York
The otherwise laudatory report cited issues like “prevalent violations of recruitment fees and other forced labor indicators” in Malaysia. It noted that Nike is working to remedy these issues with measures, including conducting internal investigations.
Labor organizers launched global protests against Nike two years ago, from New York to Honduras to Bangladesh. The campaign demanded that Nike reinstate production in a Honduras plant it pulled out of when workers unionized, address labor violations in a factory in Vietnam, and commit to independent inspectors, Labor Notes reported.
In April, New York University students protested the school’s ties to Nike, which makes university apparel, according to Washington Square News.
“At Nike, we’re committed to creating a better, more sustainable future for our people the planet and communities around the world. Ethical manufacturing has been at the core of our business model for nearly three decades. Over that time we’ve progressively raised expectations of our factory partners through our Code of Conduct and Code Leadership Standards,” a spokesperson for the company told THE CITY.
The license agreement gives NYC & Company the right to “inspect [Nike] facilities and warehouses and those of its suppliers and manufacturers.”
Meyer, said the administration is prepared to step in if need be.
“If questions are raised about their labor practices, the city will initiate an investigation and hire a third party in-country inspection team. If the licensee is in breach of contract, the city can terminate the contract or seek other recourse.”
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