Employment Discrimination and Sexual Harassment-Case of Nike

Employment Discrimination and Sexual Harassment-Case of Nike

In 2018, a class-action lawsuit was filed against Nike, a leading sportswear and apparel company. The complainants were four ex-workers of Nike who worked in the company’s headquarters in Oregon. They claimed that Nike discriminated against them in terms of payment and ignored widespread sexual harassment against women within the company (Campbell, 2018). The four ex-employees noted that women working for Nike received less pay for doing the same kind of job as their male counterparts. They also observed that women were paid smaller bonuses and had little chance of getting promotions compared to men. In the lawsuit, the four women accused Nike of allowing a demeaning and abusive working environment for women. Following the allegations, most top executives left the company while the company’s CEO, Mark Parker, issued a statement to assure the employees that the company would do a complete overhaul of its hiring and compensation policy.

The four women followed the footsteps of women who have sued body corporate, such as Uber and Nike, over gender-based discrimination. However, Nike’s lawsuit was unique as the plaintiff went further and demanded court-monitored structural changes to the company’s hiring and compensation policy. They complained that they had reported cases of discrimination and sexual harassment to the human resource manager, but no action had been taken against the male supervisors. The current hiring and compensation policy excluded women from better pay and promotions to leadership positions (Thom, 2018). Three female executives had left the company the previous year, citing frustration in the company and a culture that favored men over women. One of the complainants claimed that she had reported to the HR manager about a supervisor who had body-shamed her. She added that only a verbal warning had been issued to that supervisor and that she continued reporting to him, which she could not stand. Two of the four women ex-workers had also complained about a manager who allegedly scolded them in front of their colleagues.

The lawsuit highlighted the frustrations of thousands of women who had attempted to climb Nike’s corporate ladder. One complainant, who held the position of a brand marketing director, demonstrated that she received $20,000 less than what a male colleague doing the same kind of work received (Lauren, 2018). She added that her career ended after filing several complaints internally, including complaining of sexual advances from male co-workers, but no action was taken. In the lawsuit, the women questioned the company’s capacity to prevent discrimination against women and sexual harassment. The lawsuit also pointed out that women were massively underrepresented in the company’s executive positions, as only 29% of Nike’s top positions were held by women across the world (Thom, 2018). Among the many demands, the four women sought compensation from the company for harming their careers and their chances of receiving promotions. Furthermore, they demanded that the company be compelled to change its discriminative hiring and compensation policy. They wanted the court to compel the company to put in place a reliable and verifiable policy for performance assessment, compensation, and promotion.

In February 2019, the company moved to block the four ex-workers from proceeding with the case collectively on behalf of other female employees. However, a federal magistrate judge ruled that it was too early to limit the number of plaintiffs covered in the case. In its submission, Nike had requested the court to dismiss the lawsuit for being too broad, claiming that it brought together thousands of women under different job groups and under different salary groups. The judge ruled that the plaintiffs demonstrated collective harm caused by the company against the multiple job categories. This was the initial step in what could become a long and complicated labor-related litigation. The lawsuit is a lesson to body corporates and employers in general that conducting a regular pay audit is inevitable to ensure that the compensation system can withstand legal scrutiny (Yusoof et al., 2017). Nike’s current pay patterns and policy perpetuates pay disparities as it utilizes salary history in determining employees’ current compensation brackets and levels.

As a result of this case, Nike’s CEO, Mark Parker, announced in a company’s executives’ meeting that the company would revamp its compensation policy and alter the management training programs to match its goals of ensuring equal pay for all workforce diversity. The changes were part of the company’s efforts to restore the corporate culture where every employee feels empowered and included. The company’s decision to alter its hiring and compensation policy came after the lawsuit filed by the four women ex-workers on behalf of other female workers. It was also in response to a survey released four months ago showing pay disparities at Nike. Besides doing a complete overhaul to its hiring and compensation policy, Nike further announced that it was increasing the salaries of over 7,400 employees from its pool of over 74,000 employees worldwide (Thom, 2018). Through an internal memo, the CEO also issued an apology on behalf of the company for cultivating a culture of exclusion and one that did not take employees’ complaints seriously.

Although Nike lost in blocking the four women ex-workers from proceeding with the lawsuit collectively, no determination has been made as of today. However, if the plaintiffs are successful, they hope that the company will compensate them for harming their career growth. Furthermore, this case has not influenced the change of any national legislation, but it resulted in massive reforms in Nike’s internal policy on hiring and compensation. As Thom (2018) notes, the lawsuit also forced the company to announce a pay rise to over 7,000 employees across the world.

References

Campbell, A. (2018). Why the gender discrimination lawsuit against Nike is so significant. Retrieved from https://www.vox.com/2018/8/15/17683484/nike-women-gender-pay-discrimination-lawsuit

Lauren, T. (2018). Nike is about to give 7,000 employees raises. Retrieved from https://www.cnbc.com/2018/07/23/nike-to-adjust-salaries-bonuses-for-employees-to-address-pay-equity.html

Thom, F. (2018). Nike revamps compensation policy, gives raises to 10%. Retrieved from https://www.mediapost.com/publications/article/322636/nike-revamps-compensation-policy-gives-raises-to.html?edition=110143

Yusoof, S., Zuber, F., Mansur, H., Zamziba, N., & Toriry, S. (2017). Wages of Labour Discrimination: Case Study on Nike Company Indonesia. International Journal of Academic Research in Public Policy and Governance, 4(1), 2312-4040.