Chicago Niketown employees allege racial discrimination in lawsuit

By Ameet Sachdev
Chicago Tribune
(March 24, 2006) A race discrimination lawsuit brought by 18 current and former African-American employees of the Niketown store on Michigan Avenue has been granted class-action status, creating a potentially damaging public relations problem for the shoe giant.

In an order unveiled Thursday, a federal judge in Chicago expanded the base of plaintiffs in the case to include more than 230 African-Americans who have worked at the store since Dec. 17, 1999, which is four years before the case was originally filed.

At issue is whether Niketown systematically discriminated against these workers in hiring, promotions, benefits and workplace discipline, thus subjecting them to a hostile environment.

The suit, filed in 2003, also makes embarrassing allegations that African-American customers, including professional athletes such as the Bulls' Tyson Chandler and three Green Bay Packer football players, were subject to greater scrutiny and monitoring at the Chicago store, which is one of 15 Niketown stores owned by the Beaverton, Ore.-based company.

While the judge did not address the merits of the employees' claims, the longer the case continues and the more publicity it receives could cause distress at Nike Inc., marketing experts said. Its shoes and clothing have a huge following among African-American youth. It also relies on high-profile black athletes, such as Michael Jordan and Kobe Bryant, in its marketing campaigns.

"Minority groups tend to pay more attention to this type of issue than others," said Christie Nordhielm, a clinical associate professor of marketing at the University of Michigan Ross School of Business. "The fact that the Chicago Niketown is a flagship store, it will cause a bigger fuss than most."

Nike appears concerned about potential fallout. Company spokesman Vada Manager said, "We want to communicate to our customers that we don't believe the allegations made in the case are consistent with our culture of inclusion and respect. We don't believe this reflects our corporate philosophy.

Nike, like most companies, has corporate policies addressing discrimination and harassment. But, as Nike corporate representatives said in depositions in this case, the enforcement of such guidelines is left to managers at the store level.

In Chicago, that resulted in African-American employees being singled out for poor treatment, plaintiffs said.

The allegations include:

- Segregating African-Americans into lower-paying stockroom and cashier positions.

- Denying opportunities for promotions to sales positions by failing to post job openings.

- Hiring African-Americans into part-time rather than full-time positions that received benefits, such as health insurance and paid vacation.

- Subjecting African-American employees to searches when leaving the store, while Caucasian employees were free from such searches. Work rules regarding attendance, sick leave and employee discounts also were unequally applied, the suit said.

"The allegations are overwhelming," said Ines Monte, one of the attorneys representing the employees. "They stop you in your tracks to think that this kind of stuff is happening there."

In granting class status, U.S. District Judge Milton Shadur rejected Nike's arguments that the allegations of poor treatment were isolated and random. The Nike spokesman declined to comment on whether the company would seek to appeal the class certification.

Still, there are number of allegations in dispute. The plaintiffs claim that between January 2001 and May 2003, fewer than 25 percent of the commissioned sales specialists, the highest-paid employees, were African-American.

Nike counters that its employment data from 1999 to 2004 show that more than 63 percent of the sales positions were filled by African-Americans, Manager said.

Two former employees who tried to represent themselves filed the complaint. The class is seeking an unspecified amount of damages, including lost wages and benefits.

A status hearing in the case is planned for next week.


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