In the "first legal challenge of its kind against
Nike," consumer lawyers are suing the company saying "it has
lied about working conditions in the Asian factories where
its shoes and apparel are made," according to Aurelio Rojas
of the S.F. CHRONICLE. The suit, filed yesterday in San
Francisco Superior Court, accuses Nike of violating CA's
consumer laws by "willfully misleading the public about the
well-being of hundreds of thousands" of overseas workers.
The suit alleges that Nike subcontractors expose their
workers "to dangerous toxins and suspected carcinogens," and
that "workers are not paid living wages, are forced to work
overtime in violation of applicable laws, and are subjected
to corporal punishment and abuse." The suit also claims
that Nike "has repeatedly assured the public, in both
advertisement and policy statements, that it protects" its
workers, calling those claims "false" and in violation of
CA's unfair business practices law (S.F. CHRONICLE, 4/21).
WHAT THEY SEEK: The suit says that CA customers "are
entitled to a refund of all profits earned by Nike from
those intentionally misleading statements." The consumer
group's lead attorney Alan Caplan said Nike "misrepresented
the conditions in their factories and the wages they pay to
protect their profits, and that's illegal" (S.F. CHRONICLE,
4/21). In L.A., Henry Weinstein reports that lawyers filed
suit under CA's Business & Professions Code, the same
statute used by Caplan in a lawsuit against R.J. Reynolds'
Joe Camel ad campaign. Caplan eventually reached a $10M
settlement with R.J. Reynolds. The current lawsuit "seeks
to compel Nike to change its advertising practices,
undertake a court-approved public information campaign to
correct alleged misstatements and pay back four years of
profit." The money would go to the CA treasury. Among the
evidence cited is a '97 internal audit of Nike, by Ernst &
Young, which "describes widespread health and safety
violations" at a Nike factory in Vietnam (L.A. TIMES, 4/21).
NIKE'S RESPONSE: Nike issued a statement yesterday,
saying, "Out of respect to the California courts, our
shareholders, consumers and employees, we will treat this
matter seriously. However, upon initial review, the action
as filed appears to be more of a press release dressed up
like a lawsuit. The lawsuit raises no new claims" (Nike).
