ACLU & Nike vs. Reason

May 15, 2002
by Jeff Milchen

With political dissent under attack as “unpatriotic” and immigrants’ rights flouted by the federal government, the American Civil Liberties Union has a vital role to fulfill in defending personal freedoms. So why is the ACLU devoting resources to argue that transnational corporations like Nike should enjoy Bill of Rights protections?

For years, human rights advocates have investigated and worked to expose horrid working conditions in the Nike Corporation’s overseas “sweatshops.” Naturally, Nike fought the accusations with a public relations campaign denying the claims and blamed subcontractors while disavowing responsibility for contractors’ conditions.

Marc Kasky sued Nike for fraud under California consumer protection laws for broadcasting misinformation, but his suit initially was thrown out in state courts, which said Nike’s PR was protected “free speech.”

On appeal of Kasky v Nike Inc. to the California Supreme Court, Nike and the ACLU of Northern California argued that because the company’s PR was partially political debate and not purely commercial, it had the “right” to tell its story with full 1st Amendment protection and bore no legal duty to be truthful.

Thankfully, they lost. On May 2, the Court ruled 4-3 that communication need not be an advertisement to be “commercial speech” with less than paramount protection. The court reinstated Kasky’s suit without ruling on the merits of the case, which now can be argued in trial court (pending possible appeal by Nike Inc. to the U.S. Supreme Court).

The ruling clearly was a victory for the public interest and groups taking on powerful corporations, but someday Nike’s argument will be dismissed with a one-sentence explanation: “Corporations are not people and the Bill of Rights does not apply.”

The notion that corporations — entities unmentioned in our Constitution — should enjoy protections created for living human beings is a concept deserving burial deep in the same dark closet as the legal precedents of slavery and “separate but equal.”

But unlike our history regarding slavery, our founders got it right. They despised corporations as they knew them–as tools to drain wealth from the colonists and enrich the English monarchy. When states began chartering (granting permission to exist) some corporations in the late 1700s, all agreed that corporations were tools to serve the public interest. We chartered corporations because they were a useful tool to gather investment and disperse financial liability in order to provide public goods, such as construction of roads, bridges or canals.

Though corporations subsequently were allowed to enter other business realms, for many years state officials ensured they were fully subordinate. State legislatures revoked charters of corporations that exceeded their permitted roles and tightly controlled other aspects of corporate activity. States also forbade corporations to spend money to influence elections, legislation or public opinion.

So where did this concept of “corporate free speech” come from?

Later generations, lacking firsthand experience of corporate exploitation, were less vigilant about keeping them in check. States allowed the number, size and scope of corporations to grow rapidly in the 1800s. As corporations grew in wealth, their economic power bestowed political power to their owners.

Following the Civil War, corporations rapidly completed the transformation from tools to serve the public to tools for consolidating wealth and power for their owners. The culmination of this power grab may have come in 1886, when a U.S. Supreme Court reporter created “corporate personhood.”

Though the court did not rulewhether or not corporations enjoyed protection under the 14th Amendment (and hence the Bill of Rights), the case of Santa Clara County v. Southern Pacific Railroad subsequently was cited as precedent to apply the Bill of Rights to corporations–years before most human beings enjoyed full Constitutional protection!

So how does this relate to civil rights and Nike?

Ultimately, the undeserved privilege and power of corporations comes directly at the expense of our power as individual citizens. If corporations are calling the shots in our Congress and courts, we are not.

Ironically, one dissenting justice in Nike wrote that the decision failed to “account for the realities of the modern world–a world in which personal, political and commercial arenas no longer have sharply defined boundaries.” You can bet that corporations will continue to try blurring those boundaries to usurp personal freedoms.

So long as we accept such absurdities as “corporate free speech,” we preclude the possibility of democracy, for we can never speak as loudly with our own voices as corporations can with the unlimited amplification of money. ACLU supporters should demand that it stop promoting corporate “rights” and recognize that greater corporate privilege occupies the space that citizens’ rights otherwise would.

The Nike case presents a superb provocation to explore our forgotten history and reclaim some of our tools for keeping capital and corporations subordinate to democracy.

Jeff Milchen is the director of