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Annual Report of the Committee on Manufacturer Responsibility
September 8, 2009, Volume 56, No. 02

The following report was sent on May 14, 2009 to President Amy Gutmann from Dr. Karl Ulrich, Chair of the Committee on Manufacturer Responsibility (CMR) in accordance with the Code of Workplace Conduct for University of Pennsylvania Apparel Licensees. As outlined in the Code, the CMR will review the Code annually; review the effectiveness of monitoring; review the state of compliance of the apparel licensees and review any alleged violations of the Code.

The Code of Workplace Conduct for University of Pennsylvania Apparel Licensees can be found online at www.upenn.edu/almanac/volumes/v55/n02/apparel.html

Annual Report of the Committee on Manufacturer Responsibility

This is a report of the Committee on Manufacturer Responsibility (CMR) for academic year 2008-2009. The committee was established in accord with the University’s Code of Workplace Conduct (the Code) for manufacturers licensed to provide apparel with the Penn logo or identification. Its purpose is to ensure compliance with the Code by manufacturers through monitoring and oversight. It has now completed its ninth year of operation.

The members of the committee this year were:

Ryan Burg, GAPSA
Peter Cappelli, Faculty (Wharton)
Nicole Dillard, CHAC
Grant Dubler, Undergraduate Assembly
Nick Eng, CHAC
Steven Hauber, WPSA
Robin Leidner, Faculty (SAS)
Tina-Marie Ranalli, GAPSA
Colleen Becht Rotindo, PPSA
Karl Ulrich, Faculty (Wharton), Chair
Christopher Bradie, Business Services (Ex Officio)
Ilene Wilder, Business Services (Ex Officio)
Pierce Buller, Office of General Counsel (Ex Officio)
Leo Charney, Provost’s Office (Ex Officio)
Leah Popowich, President’s Office (Ex Officio)
Jackie Miraglia, Center for Technology Transfer (Staff Support)
Andrew Schlossberg (Intern)

We held five meetings in the course of the year; four are required by the Code. Meetings took place on October 29, 2008; December 8, 2008; February 23, 2009; March 23, 2009 and April 22, 2009. 

As part of its monitoring efforts, the CMR works with two organizations: the Worker Rights Consortium (WRC), an independent labor rights organization sponsored by a coalition of 175 universities and colleges, and the Fair Labor Association (FLA), an independent monitoring organization sponsored by both industry and universities. The University of Pennsylvania is a member of both, and the CMR sends representatives to meetings of these organizations.  This year our representatives attended meetings of the WRC University Caucus on June 5, 2008 and of the FLA (CAMEX) on March 15, 2009.

 In addition to participating in these organizations, the CMR endeavors to directly monitor its licensees annually by sending out a License Compliance Questionnaire (LCQ) to each of our licensees. In 2008-2009, we sent out 35 LCQs as part of the license renewal process for the year July 1, 2009 through June 30, 2010. Of the 35, 29 licensees have responded affirmatively and 2 have terminated the agreement. The remaining 4 licensees are being contacted to determine their reasons for not responding. If any of them does not re-certify by signing the LCQ, their license will not be renewed.

In the winter, the WRC notified the CMR that it had determined that one of the University’s suppliers, Russell Athletics, had violated the Code in relation to its closure of a company-owned manufacturing facility in Honduras (Jerzees de Honduras). The CMR conducted conference calls with the WRC and the FLA to discuss this matter. A member of the committee, Chris Bradie, attended the FLA annual meeting as part of the CAMEX conference in Orange County, California on March 15, 2009 where a senior executive of Russell Athletics gave a presentation. Subsequently, he spoke with the Russell executive in a phone conversation to gain further clarification and understanding of Russell’s position. The CMR held a special meeting (March 23, 2009) focused exclusively on this matter. As a result of these deliberations, the CMR voted on and approved the following recommendation. There were seven voting members present, including at least one faculty member, staff member, and student. The vote was unanimous.

The Committee on Manufacturer Responsibility has reviewed information—including documents provided by the Workers’ Rights Consortium (WRC) and the Fair Labor Association (FLA)—relative to Russell Athletics’ alleged violations of the Code of Workplace Conduct for Penn Apparel Licensees. We find that the WRC and the FLA are largely in agreement that there were several areas of non-compliance with the Code which require Russell to engage in significant remediation. Russell has agreed to a set of actions outlined by the FLA and is making progress towards completing them.

We also believe that Russell Athletics was not sufficiently forthright in disclosing, in the annual Licensee Compliance Questionnaire, difficulties encountered in implementing and enforcing the Code as is required by its license agreement with the University.

We recommend as an appropriate course of action that Penn’s Center for Technology Transfer not renew Russell’s license, which will expire June 30, 2009. We further recommend that the University continue to communicate with the WRC and FLA as they monitor Russell’s efforts to improve its workplaces. The Committee welcomes Russell to submit a new application for a license at some point in the future, when the actions outlined by the FLA have been substantially addressed, and looks forward to a continued dialogue with Russell, the WRC, and the FLA.

Given the number of supplying factories and their distribution around the globe, the monitoring and oversight responsibilities of the CMR are daunting. As a result of our experience with the Russell matter, we concluded that the Licensee Compliance Questionnaire is not sufficient to ensure compliance of our licensees. We reaffirmed the need to rely on the WRC and FLA for monitoring. We also recognized the need to amend the Questionnaire somewhat to more directly ask suppliers to disclose any difficulties they have encountered in the past year related to the Code.

––Karl Ulrich, CIBC Professor
Operations and Information Management Department, The Wharton School

The following response from the president was sent on May 26, 2009.

Response to the Chair from President Gutmann

Thank you for writing on behalf of the 2008-2009 Committee on Manufacturer Responsibility (CMR). I greatly appreciate the time and energy spent by each member of the Committee this year, under your able leadership as chair. I especially want to applaud the Committee for the deliberative process in which its members engaged surrounding reported violations of the University’s Code of Workplace Conduct for Penn Apparel Licensees. I support your recommendations and I am grateful for the diligent process that resulted in your conclusions.

Thank you for your terrific leadership on this important committee and please accept my best wishes for the summer.



Almanac - September 8, 2009, Volume 56, No. 02