Labor Alerts: a service of Campaign for Labor Rights

NIKE SUED OVER SWEATSHOP CONDITIONS !!!

April 20, 1998
[The following press statement was released today by Communications Works: (415) 255-1946, works@igc.org. Staff at Communications Works, a progressive news service, emphasized that the law firms involved have the track record, the resources and the will to pursue this suit vigorously. This lawsuit could be tremendously important in pressuring Nike to undertake a systematic reform of its labor practices. Michael Shellenberger of Communications Works emphasized that this suit is not about money but about getting Nike to correct the discrepancy between its public rhetoric and its actual labor practices overseas. Shellenberger agreed with the assessment that the object is not to have Nike bring its claims down to the level of its practices but instead to force the company to bring its labor practices up to the level of its claims.]

Nike Misrepresented Working Conditions in Asian Factories, Violated California Fair Business Laws, New Lawsuit Charges

Lawsuit to be filed at San Francisco Superior Court, Monday, April 20 Press Conference: 10:00 A.M., San Francisco City Club, 155 Sansome (at Pine)

Speakers:

* Alan M. Caplan, Bushnell, Caplan & Fielding, LLP
* Patrick J. Coughlin, Milberg Weiss Bershad Hynes & Lerach LLP
* Marc Kasky, Plaintiff on behalf of the General Public of the State of California
* Dara O'Rourke, Corporate Watch

San Francisco, CA - Nike has illegally misled and deceived California consumers about working conditions and wages in its overseas factories, charges a lawsuit to be filed Monday April 20. The Beaverton, OR, company is being sued in a private attorney general action for "unlawful and unfair business practices" that violate California's Business and Professions Code.

Attorneys for the plaintiff, fresh from a settlement in the high-profile lawsuit that outlawed Joe Camel, the cigarette marketing figure, include Bushnell, Caplan & Fielding, LLP, of San Francisco, and Milberg Weiss Bershad Hynes & Lerach LLP of San Diego.

"Nike has failed to tell Californians the truth about their business practices," said Alan M. Caplan, lead attorney in the suit. "They misrepresented the conditions in their factories and the wages they paid to protect their profits, and that's illegal."

Although Nike has come under close public scrutiny in recent years for alleged sweatshop abuses in its Asian factories, this is the first time the shoe giant has faced legal action over its labor policies. The suit contends that Nike's advertising and public statements present a deceptive image of the company, and that Nike falsely claimed to protect workers through a Code of Conduct and Memorandum of Understanding.

The most damning evidence against the company is contained in a 1997 Ernst & Young internal audit. Despite Nike's claims in a January 1996 letter that its Memorandum of Understanding certifies compliance with "applicable government regulations regarding occupational health and safety [ and ] environmental regulations," Ernst & Young's inspection of a Vietnamese Nike shoe plant found evidence of widespread health and safety violations. These included the exposure of workers - most of whom are young women aged 18-24 - to reproductive toxins like toluene at levels up to 177 times the legal limit.

The Ernst & Young report was completed on January 13, 1997, but Nike did not disclose its findings. The audit was leaked by a disgruntled employee, landing on the front page of the New York Times in November 1997.

The lawsuit to be filed Monday charges that Nike "made the following misrepresentations by the use of false statement and/or omissions of fact:"

false claims that workers who make NIKE products are protected from and not subjected to corporal punishment;

false claims that NIKE products are made in accordance with applicable governmental laws and regulations governing wage and hours;

false claims that NIKE products are made in accordance with applicable laws and regulations governing health and safety conditions;

false claims that NIKE pays average line workers twice the minimum wage in Southeast Asia;

false claims that workers who produce NIKE products receive free meals and health care;

false claims that the Good Works International (Andrew Young) report proves that NIKE is doing a good job and "operating morally;" and

false claims that NIKE guarantees a "living wage" for all workers who make NIKE products.

Plaintiff in the suit on behalf of the General Public of the State of California is Marc Kasky, Executive Director of the Fort Mason Foundation, San Francisco.

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