Nike lawsuit (Kasky v Nike, re denial of labour abuses)

Nike shoe by Jorge CR7Marc Kasky filed suit against Nike in California state court in 1998 suing the company for unfair and deceptive practices under California’s Unfair Competition Law and False Advertising Law.  Prior to the lawsuit, various news reports alleged poor working conditions at Nike’s overseas supplier factories.  In response, Nike issued press releases and other public statements rebutting the allegations.  Kasky alleged that Nike’s public statements regarding the working conditions in its overseas suppliers’ factories contained false information and material omissions of fact.  Specifically, Kasky took issue with Nike’s statements regarding the following: that workers who make Nike products are protected from physical and sexual abuse, they are paid in accordance with applicable local laws and regulations governing wages and hours, they are paid on average double the applicable local minimum wage, they receive a “living wage”, they receive free meals and health care, and their working conditions are in accordance with applicable local laws and regulations regarding occupational health and safety.  Nike claimed that the lawsuit was barred by the US Constitution’s First Amendment guarantee of free speech.

The trial court agreed with Nike and dismissed the claim.  Kasky appealed, and the California Court of Appeals affirmed the lower court’s ruling.  Kasky appealed further to the California Supreme Court, which reversed the lower courts’ rulings and held that Nike’s statements were commercial speech which is entitled to less constitutional protection than non-commercial speech.  Following the California Supreme Court’s ruling, Nike appealed (petitioned for certiorari) to the US Supreme Court, which agreed to hear the appeal.  In 2003, the US Supreme Court issued a decision in this case stating that it had granted certiorari improvidently and dismissed the case, which effectively let stand the California Supreme Court’s ruling.  Several months after the US Supreme Court decision, Nike and Kasky agreed to settle the case for $1.5 million.  The settlement involved investments by Nike to strengthen workplace monitoring and factory worker programmes.

- “Nike's Big Ticking-Off”, Duncan Campbell, Guardian [UK], 17 Nov 2003

- “Nike Settles Speech Case”, William McCall, Associated Press, 13 Sep 2003

- “Supreme Court Won't Rule in Case About Nike and Anti-Globalization”, Anne Gearan, Associated Press, 26 Jun 2003

- Nike: NIKE, Inc. and Kasky Announce Settlement of Kasky v. Nike First Amendment Case, 12 Sep 2003

- ReclaimDemocracy.org: Kasky v. Nike [background on case and links to legal documents]

- US Supreme Court: Nike v. Kasky, 26 Jun 2003

- Supreme Court of California: [PDF] Kasky v. Nike , 2 May 2002

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Article
14 July 2005

Company lawyers get a wider role

Author: Sarah Murray, Financial Times

As corporate liability expands to include issues from breaches of labour practice codes in developing countries to concerns over obesity in the west, senior lawyers are regular participants in meetings to discuss them...one-third of senior executives said that while the chief executive has overall responsibility for corporate social responsibility, in-house lawyers come second...In some quarters, however, it is the risk-averse approach of legal departments that appears to be hampering corporate efforts to tackle social and environmental impacts. [refers to Liz Claiborne, Nike, Pfizer]

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Article
20 April 2005

Nike ushers in a new age of corporate responsibility

Author: Michael Skapinker, Financial Times

Scepticism is usually in order when companies boast how socially responsible they are, but Nike's decision to publish its entire list of contract manufacturers on the internet is harder to dismiss. Nike's move opens a new front in companies' efforts to engage with their critics...The first age [of corporate responsibility] was corporate philanthropy...Second-age corporate responsibility advocates say knowing what is on campaigners' minds is as important to a company's health as protecting it from fraud...Nike is now trying to go a stage further. The company says it sees corporate responsibility as a way of improving its performance rather than just protecting its reputation. [also refers to Wal-Mart, Monsanto]

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Article
16 April 2005

The ethical revolution sweeping through the world's sweatshops

Author: Maxine Frith, Independent [UK]

...after a decade of denying any wrongdoing, companies such as Nike and Gap are now admitting that their workers have been exploited and abused, and have pledged to improve the conditions [refers to steps taken by Nike, Gap, Levi Strauss]...despite some companies' repentance and reforms, other top-name brands are still using sweatshops. Among those on the target list of campaigners are Tommy Hilfiger, Umbro and Fila [part of Sport Brands International].

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Article
13 April 2005

Nike makes the step to transparency

Author: Sarah Murray, Financial Times

Today Nike breaks a three-year silence on social reporting as it publishes its 2004 corporate responsibility report. This is Nike's first report since a 2002 California supreme court ruling that the company could be sued by Mark Kasky, a labour rights activist, over statements it made about its labour practices. But that is not all: the sports equipment company has also broken new ground in transparency by publishing a complete list of suppliers on its website.

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Article
12 April 2005

Nike Issues FY04 Corporate Responsibility Report Highlighting Multi-Stakeholder Engagement and New Levels of Transparency

Author: Nike

...the company became the first in its industry to voluntarily disclose the names and locations of the more than 700 active contract factories that currently make Nike-branded products worldwide.

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Article
1 April 2005

Nike - FY04 Corporate Responsbility Report

Author: Nike

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Article
3 February 2005

Ethical reporting and the law [USA]

Author: Phillip H Rudolph, corporate social responsibility partner, Foley Hoag LLP, in the Washington DC office, in Ethical Corporation

Within the past few years, pressures have increased on companies to disclose and discuss publicly their social and environmental impacts and activities. At the same time, the risks associated with public dialogue and discourse – principally legal risks – have also evolved. [refers to Kasky v. Nike lawsuit]

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Article
1 December 2004

[PDF] The Changing Landscape of Liability - A Director’s Guide to Trends in Corporate Environmental, Social and Economic Liability

Author: SustainAbility

[refers to Phillip Morris (part of Altria), McDonald's, Nestlé, Nike, Unocal, Ford, Shell, Monsanto, ExxonMobil, Dow Chemical, Union Carbide (part of Dow Chemical), Talisman, Walt Disney, Swiss Re, General Motors, General Electric, Texaco (part of ChevronTexaco), Chevron (part of ChevronTexaco), Gap, Southern Peru Copper (joint venture Grupo México, Cerro Trading, Phelps Dodge), Coca-Cola, Rio Tinto, Freeport McMoRan, Del Monte (Fresh Del Monte Produce), Dyncorp (part of Computer Sciences), Barclays, Cape plc, Mitsubishi, Total, Burger King, KFC (part of YUM!), Kraft Foods (part of Altria), PepsiCo]

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Article
1 October 2004

[PDF] Social Impact Update - Third Quarter 2004

Author: Domini Social Investments

We engage the companies held in our portfolio by writing letters, filing shareholder resolutions, and meeting directly with corporate management to discuss issues of concern...Below are updates on ongoing conversations that took place during the past quarter. [refers to Coca-Cola, Devon Energy, Dell, HP (Hewlett-Packard), Procter & Gamble, PepsiCo, Target, Emerson Electric, Sears, Gap, Avon, Nike, McDonald's, Walt Disney]

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Article
4 July 2004

[Reading list for "Human Rights in the Marketplace" course]

Author: Professor Margaret Bedggood

[course taught at Summer School in Intl. Human Rights Law, Oxford Univ. & George Washington Univ. Law School, 2004]

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