Who Got OSU’s Monopoly Apparel Contract?

November 19, 2012

More than 18 months after OSU began contemplating signing a consolidated licensed apparel contract, the deal has finally been signed. But it’s not with Adidas, Nike, Champion or even Silver Star Merchandising, which the university was originally wooing.

J. America, Inc., the single apparel producer in the 10-year contract, is an existing OSU licensee based in Michigan. The retail and distribution side of the contract was awarded to Fanatics, Inc. with which OSU also has an existing contract.

With dozens of protests staged by United Students Against Sweatshops (USAS), it’s little wonder the university decided to skip over Silver Star Merchandising, a Dallas Cowboys-owned company that has a documented history of labor rights abuses. J. America, however, may not be much better – and with a company claiming just $6.5 million in revenues each year, is it possible that the company doesn’t have the infrastructure or resources necessary to enforce a code of conduct to prevent human rights abuses?

Company Background

J. America was founded “20 years ago,” according to OSU’s press release on the matter, and is based out of Webberville, Michigan. It is also an apparel licensee for Ohio University, Duke, Cornell, Emory, and dozens of other schools. Relative to other big-name brands such as Nike, it has remained a relatively low-key player in the college apparel scene.

J. America has donated to the NACS Foundation, the 501 (c) 3 philanthropic arm of the National Association of College Stores. It doesn’t appear to engage in other charitable activities, though, nor does it seem to participate in lobbying or other political activities in Ohio or Michigan, or at the national level.

LexisNexis shows the company has around 75 employees, but that’s obviously only direct employees – its manufacturing operations are subcontracted out to dozens of factory owners, which is common practice for the industry. OSU’s press release claims that J. America will utilize Ohio labor for embroidery and similar tasks as much as possible, but we have yet to see exactly how many people would be hired for that.

With last year’s scandal surrounding Silver Star Merchandising’s Chief Operating Officer Bill Priakos, one would hope J. America’s top executives had managed to keep their noses clean. It looks like they were successful at that, with no known ethical issues for any of the top eight.  James McCollough, J. America’s national sales director, even wrote a piece for the International Collegiate Licensing Association’s December 2009 newsletter on the importance of social responsibility in the apparel industry.

Since J. America is a privately-held company, however, which makes it hard to ascertain the depth of its operations or its specialities. Some standard business databases have no data on the company, and LexisNexis even has minimal information available. Fortunately, the Workers’ Rights Consortium (WRC) has a listing of factories that reveal where J. America does business.

More Sweatshop Allegations?

Unfortunately for the university, however, J. America is a contractor in a factory with a long and well-documented chain of human rights abuses, with issues from 2007 that are unresolved as of October 2012.

A WRC report claims that the management of Star, S.A., an apparel factory in Honduras, repeatedly and deliberately violated workers’ collective bargaining agreements and allowed favored workers to make death threats against union leaders. Star makes apparel for adidas, Nike, J. America and three other companies, but WRC records do not contain evidence of the factory making OSU apparel.

Star factory management claims to be taking some steps to prevent future abuses, but also outright lied to the WRC, claiming to not be aware of the abuses at all; WRC responded by soundly refuting management’s claims of ignorance, based on letters sent by the factory’s union representatives and other evidence.

The allegations violate J. America’s own code of conduct, which reads, in part: “No employee shall be subject to any physical, sexual, psychological or verbal harassment or abuse,” and: “Employers shall recognize and respect the right of employees to freedom of association and collective bargaining.”

So far, no other current J. America factories have been subject to any WRC investigations. With additional factories in Honduras, India, China, Pakistan, Mexico, however, USAS members have begun to express concerns that the Star factory findings may only be the tip of the iceberg.

“We plan on following up to make sure OSU’s new apparel supplier, J. America, will respect its workers rights across the globe,” said OSU USAS organizer Danya Contractor in a statement.

The Pulse has put in public records requests with the university for J. America’s financials and other data, which they were likely required to release to the university during the bidding process. We will post those findings when we receive them.

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