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Nike Must Face Gender Bias Class Action; Shareholders Sue Again

LONDON, ENGLAND - APRIL 24: Eliud Kipchoge and Sir Mo Farah attend the Elite men's photocall ahead of Sunday's London Marathon at The Tower Hotel on April 24, 2019 in London, England. (Photo by Joe Maher/Getty Images)
By Christopher Coble, Esq. on May 23, 2019 3:00 PM

In August last year, female former Nike employees filed a class action lawsuit against the company, alleging sex discrimination, violations of equal pay laws, and fostering a hostile work environment. Nike tried to have the suit dismissed, claiming it could not continue as a class action because it "weaves together thousands of women in hundreds of different job classifications and departments (and across various salary bands and levels), each with different duties, qualifications and experience."

But a federal judge disagreed and is allowing the case to proceed, for now. But that might not be Nike's only legal problem related to allegations of gender bias.

#NikeToo

The class action litigation is massive, involving more than 500 current and former Nike employees. The suit was filed by four female executives alleging, among other things:

  • Women at Nike are paid less than men with substantially equal job duties;
  • Nike policies and practices contribute to and perpetuates sex-based pay disparities, especially by using prior salary to set compensation; and
  • Nike channeled women into less valuable job position and assignments and otherwise intentionally discriminates against them.

And there were more salacious accusations relating to a hostile work environment, including staff outings at strip clubs, supervisors bragging about carrying condoms in backpacks, inappropriate touching and emails, drunk texting, and a general "good ol' boy" corporate culture where alcohol runs freely.

Nike claims it made significant changes to its internal HR practices to address these concerns, but the plaintiffs argue it's too little, too late. And the court ruled the women's allegations and factual support were enough to certify it as a class action. "The allegations that defendant's systemic practices and policies discriminate across all job descriptions against women," wrote Magistrate Judge Jolie Russo, "plausibly alleges that the purported collective members are similarly situated to the named plaintiffs." So the lawsuit isn't going anywhere soon.

A House Divided

And another lawsuit against Nike based on the same underlying facts has resurfaced. Three Nike shareholders had sued the company last year, claiming the company's board knew about the widespread discrimination and harassment and didn't do enough to combat it, causing potential losses to investors. That first suit was dismissed last month, but the same shareholders have re-filed it, adding two new defendants and two new claims of unjust enrichment.

The litigation certainly doesn't bode well a brand known for its socially conscious advertising efforts.

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