Kasky v. Nike Inc. Settled
Participants Pleased, Many Activists Inflamed
September 12, 2003
Editors' Note: When we first issued a press release on this page on the day of the settlement, it was rushed and we presented the settlement in overly positive terms. The updated report here is a more informed analysis that reflects more thorough information (though there is still much we do not know).
Kasky v. Nike, a lawsuit that began with a false advertising claim and went on to become a U.S. Supreme Court case that explored a corporation's claim to a constitutional right to lie, has concluded.
On September 12, Marc Kasky and Nike Inc. announced a settlement stipulating that Nike will pay $1.5 million (about half of one day's advertising budget) to the Washington, D.C.-based Fair Labor Association (FLA) for "program operations and worker development programs focused on education and economic opportunity." Nike and other corporations accused of "sweatshop" practives hold several seats on the board of directors and wield effective veto power over any organizational activity.
Neither party would confirm that Nike paid Kasky's legal team for their five years of work on the case, but a settlement that did not compensate them is unlikely, given Nike's loss at the U.S. Supreme Court in June. While the Court did not issue a substantive ruling on Nike's constitutional claims, it rejected Nike's pre-emptive appeal and remanded the case to a trial court on the merits of Kasky's complaint--that Nike lied to the public about its "sweatshop" practices in the course of a major PR campaign.
So what's our view? Well, there was little chance of Nike willingly going back to trial without making a major effort to settle, due to continuing bad publicity that Nike has received, both from labor groups criticizing its worker treatment and from ReclaimDemocracy.org and others assailing its attempts to subvert our Constitution to serve corporate ends.
In light of this, the settlement amount is surprisingly low. For a company with $10.7 billion in annual sales, it's a pittance. After 5 years of litigation, Marc Kasky and his legal team doubtless were eager to move on, but the settlement seems lopsided.
More disturbing to many people than the amount, however, is the recipient, and the fact that Nike now escapes the discovery process, which many human rights activists have long seen as their golden opportunity to gain critical information about Nike's practices.
Despite an unsatisfying conclusion, the Kasky v. Nike case had many positive impacts in its 5-year lifespan. While we share many labor advocates frustration with the settlement and we pushed for the unlikely scenario of the U.S. Supreme Court making a landmark ruling against corporate claims to Bill of Rights protections, we feared a negative (for us) ruling was more likely, and were pleased to have the Supreme Court let the case go to (the averted) trial.
The tough California law requiring truth in communications from corporations doing business in the state was upheld by the state Supreme Court and Nike's attempts to challenge the law failed.
ReclaimDemocracy.org played a prominent role in publicizing this case nationally and was party to an amicus brief to the U.S. Supreme Court on behalf of Marc Kasky. We joined with numerous public interest groups and other parties in bringing light to this case, including Educating for Justice, Press for Change, Global Exchange, Citizen Works, Domini Social Investments, several U.S. Representatives.
Perhaps most importantly, the case served as a valuable tool for us and several of our allies to reach a national audience with challenges to corporate claims on constitutional rights.
Kasky v. Nike is gone, but the case illuminated a growing conflict that only will escalate in the months and years ahead. Within weeks, you'll be hearing more from us about a related case involving a lawsuit by the Monsanto Corporation. The struggle goes on.