Nike Move Ends Case Over Firms’ Free Speech
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A lawsuit that only months ago was expected to produce a landmark ruling on the free speech rights of corporations ended with a whimper yesterday. Nike Inc., the athletic shoe and clothing company, agreed to pay $1.5 million to settle the case, in which it had been accused of making misleading statements about its global labor practices. In June, despite hearing arguments and considering three dozen briefs, the Supreme Court decided not to decide the case after all. Some justices suggested that after a trial, the court might be willing to return to the case, which had reached them after only preliminary rulings from California courts. The lawsuit was brought by Marc Kasky, a labor activist in San Francisco, who said that statements Nike had made about employee pay and working conditions had violated a California law on false advertising. But the statements, in news releases and in letters to the editor of The New York Times, to university presidents and athletic directors, were not advertising in the usual sense. Nike argued that its statements did not fit the United States Supreme Court’s definition of commercial speech — speech that ”does no more than propose a commercial transaction” — and so should receive the constitutional protection the same statements would get if made by individuals. The California Supreme Court, in a 4-to-3 decision in 2002, ruled that Nike’s statements were commercial speech subject to the advertising law because Nike was ”engaged in commerce” and its statements were ”likely to influence consumers in their commercial decisions.” Nike has not conceded that the statements were false or misleading, and no court has addressed that issue. Under the settlement, Nike will donate $1.5 million to the Fair Labor Association, a Washington group that monitors corporate labor practices abroad and helps educate workers. In a joint statement, Mr. Kasky and Nike said supporting those programs was preferable to litigation. Adele Simmons, the chairwoman of the board of the association, applauded the settlement. ”This money will be used, clearly, to contribute to our work on workers’ rights,” Ms. Simmons said. Other terms of the settlement were not disclosed, and lawyers on both sides declined to say whether Nike had paid Mr. Kasky’s legal fees or made other payments. Jim Carter, general counsel for Nike, expressed concern about the California ruling. Nike had stopped making public its annual ”corporate responsibility report,” Mr. Carter said, and would limit its public statements. The company chose to settle, he said, because the Supreme Court’s decision not to rule ”left us with no satisfactory comfort that we could get back to the Supreme Court.” To do so, the company would have had to go to trial under the California Supreme Court standards, lose, appeal through the state courts and then persuade the United States Supreme Court to hear the case again. Jeff Milchen, who is the director of the antiglobalization organization ReclaimDemocracy.org said the California Supreme Court was right to place additional limits on corporate speech. ”Corporations have a legitimate role to play in society by doing business,” Mr. Milchen said. ”But they do not have a legitimate role in influencing public policy. Corporations do not have any claim to the protection of our Bill of Rights.” More : query.nytimes.com |