The Bad Boys of Business: Nike
By Steve Reiter Sep 03, 2009 9:40 am
A "just do it" approach on the field and in the boardroom.
With one of the most recognizable slogans in the history of retail, marketing, and, indeed, the world, Nike (NKE) is instantly familiar worldwide. Couple that with the sleek and simple "swoosh," and you have something very close to brand immortality.
Nike's footwear lines the racks of shoe stores, department stores, and even high-fashion retailers. Its headbands are worn by the greatest athletes in the world; its jerseys by professional and college sports teams alike.
But an empire isn’t built without a little bloodshed.
Along the way, Nike has found itself on the wrong side of a number of lawsuits, and has learned the hard way that a “just do it” attitude in business can land you in scalding hot water. Among its high-profile issues: extensive labor violations, copyright infringement, licensing violations, racial discrimination… The list goes on.
Nike didn't respond to requests for comment on the incidents.
In 1998, San Francisco activist Marc Kasky filed a complaint against Nike alleging that the company made false claims about the treatment of workers at some of its overseas factories (the company had stated in a public relations campaign that conditions were compliant with US working standards). Independent studies revealed major flaws in employee safety and health, along with violations of minimum wage and overtime compensation policies.
The case got the attention of the California Supreme Court, which decided the statements made by Nike were “commercial speech” and could fall into the category of false advertising. The suit became a First Amendment issue when Nike appealed to the US Supreme Court, saying its statements were protected under free speech. But when the high court dismissed the case, saying it should never have reached that level, the California ruling stood. In 2003, Nike settled for a paltry $1.5 million. Human rights activists are undoubtedly still reeling.
Just do it.
As Nike says “just do it” to unsavory and sometimes hostile working conditions, it seems to have the same philosophy regarding patents and copyrights.
Back in 2007, Nike collaborated with Apple (AAPL) to create the Nike+iPod Sports Kit, which synced sneakers to iPods and recorded user's speed and distance while running. Sounds good, except for the alleged violations of four US patents held by Utah-based Leaper Footwear. The company claimed Nike began working on this technology in 2006, disregarding the patent which was acquired in 1998. Just do it.
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2009-09-04 12:13:17
Nike
You know we could make the shoes here? But wait that mean paying an American good wages,Medical,Dental,401k,Vac and company car. Well the the Nike Air Force One would no longer cost $80 a pair. But now it will cost $280 a pair....no thanks stay mean Nike. And not to mention what a big cut into profits that would mean for the big wigs @ Nike. Oh Hell no!!!!
2009-09-04 12:48:09
Nike
There is a difference between outsourcing and injustice. They dont have to go hand in hand. Nike could very well continue to outsource without the extremely poor wages, long work hours and poor working conditions. Nike does not have to take advantage of a poorer country to the fullest. Yes, these countries do like to have a job to go to and money to bring home, but does Nike really need to be so ruthless just to make a dime? Capitolism has corrupted this country with greed-making humane treatment a figment of the imagination. Nike needs to get a grip, take an ethics class and just do it right for once. Have some dignity.
2009-09-04 14:08:31
Nike
Jesse Miguel, why would you think that doing the work here would equate to having to pay good wages and benefits. Helloooooo, have you been living under a rock?? MOST americans work here in the good old USofA and don't get all the benefits that you describe. You honestly think that Walmart pays its cashiers GOOD wages and/or benefits. Nike can keep the work here in this country, and frankly, even if the cost of the shoes were $280, guess what--there are fools out there who would pay it. This is corporate greed plain and simple. For these big companies, their advertising budgets are enormous, and the costs are transferred to the customer. A significant portion of the cost of that sneaker is going to single bank account of Tiger Woods and other superstars who endorse. Cut the endorsments, pay the workers more money.
2009-09-04 14:50:15
No Real Visibility To The Truth
You guys should be embarassed by the lack of thorough reporting you provided for this article. The reality is that all manufacturers deal with issues abroad because THEY DON'T OWN THE FACTORIES. Which means that consultative influence and coaching are the best way to get factory owners and leadership to move towards fair and honest treatment of workers. It's simply the best means to achieving success and Nike does this extensively. Nike is also a founding members of FLA and have licensing relationships with FLA-affiliated colleges and universities. Furthermore, with regard to supporting diverse employment--Nike has long supported diversity in the workplace--doesn't mean there won't be individuals along the way who violate the polcies and culture Nike has worked to create over the years for all diverse backgrounds. In 2009 Human Rights Campaign (HRC) named Nike one of the best American companies for glbt workers. This isn't something that a close minded, Mad Men era company wins. And don't get me started on copyright and patent infringement. Because the number of companies who suffer the wrath of Nike's legal team for doing just that with the Nike brand assets and designs is beyond your understanding. Ever heard of a company called Bape? Their entire footwear product line looks exactly like multiple versions of the AF1 line and Nike Air line. Dont any research on their factory conditions? And your Apple/Nike+ example? Were there any real grounds for that suit--the Nike+ product line would not have been permitted to go to market--at least not without some hefty fines. At the end of the day--Nike is a big company. It's not perfect--but it works overtime correcting issues that in the past it clearly has owned up to (read any of their corporate responsibility reports over the last 6 years?), to the point of collaborating with competitors on the very issues spoken to in this article. Yes, Nike gets a bad rap--but do your research and prior to going to print, get a real time understanding of what's current. Because your information isn't. Oh, and by the way--I notice you didn't touch on Nike environmental position...hard to acknowledge when a company is LEADING in an area that so many other large companies are ambigiuous at best about. Go to www.nikeconsidered.com and take a gander.
2009-10-14 19:46:58
No Real Visibility To The Truth
totally agree ..nike lives by "there is no finishline" and some other brands out there cant compete...its always easier to point fingers and find bad things in a company instead of talkin about the good things nike does as of reuse a shoe...yeah a better research would do it next time..
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