Nike to pay 400 Chicago employees $7.6 million to settle discrimination suit

By Ameet Sachdev
Chicago Tribune
(July 31, 2007) Nike Inc. has agreed to pay $7.6 million to settle a race discrimination lawsuit by current and former African-American employees of its Niketown store on Michigan Avenue.

The class-action settlement, filed Monday in U.S. District Court in Chicago, covers about 400 African-American workers employed from Dec. 17, 1999, through the present.

Nike denied any wrongdoing or liability. The company and attorneys for the class said in a joint statement Monday that they settled to "avoid continued and protracted litigation."

The deal eliminates a potentially damaging public-relations problem for the Beaverton, Ore.-based company, one of the world's largest makers of athletic shoes. Nike's shoes and clothing have a huge following among African-American youth. The company also relies on high-profile black athletes, such as Michael Jordan and Kobe Bryant, in its marketing campaigns.
 
The suit, filed in 2003 by two former employees, alleged that African-American customers, including professional athletes such as the Bulls' Tyson Chandler and three Green Bay Packers players, were subject to greater scrutiny and monitoring at the Chicago store.

The suit gained momentum last year when a federal judge in Chicago granted class-action status and expanded the base of plaintiffs to include current and former African-American employees. At issue was whether Niketown systematically discriminated against these workers in hiring, promotions, benefits and workplace discipline, thus subjecting them to a hostile environment.

Nike, like most companies, has corporate policies addressing discrimination and harassment. But, as Nike corporate representatives said in depositions in the 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. Their suit alleged that Niketown Chicago:

*Segregated African-Americans into lower-paying stockroom and cashier positions.

*Denied opportunities for promotions to sales positions by failing to post job openings.

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

*Subjected 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, according to the suit.

Under terms of the proposed settlement and consent decree, the Michigan Avenue store will be monitored by a court-appointed diversity consultant. A compliance officer also will be appointed at Nike's world headquarters.

Other measures include diversity training for supervisors and managers at Niketown Chicago, a mentoring program for African-American employees and the appointment of an ombudsman. Policies will be reviewed to eliminate any disparate treatment.

Tribune staff reporter Barbara Rose contributed to this report

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