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Why the gender discrimination lawsuit against Nike is so significant

Women who worked at Nike are suing over pay discrimination. Their demands are critical in a broader fight.

Nike’s headquarters in Beaverton, Oregon.
Don Ryan/AP

The women’s revolt at Nike has moved from the company’s corporate offices in Oregon to the federal courts.

Four women who worked in the corporate headquarters at the sports apparel company filed a class-action lawsuit at a federal court in Oregon last week, claiming that Nike violated the Equal Pay Act by engaging in systemic gender pay discrimination and ignoring rampant sexual harassment. The former employees said that women who work for the company are paid less for doing the same work as their male colleagues, receive smaller bonuses, and are less likely to get promoted, according to the complaint.

The lawsuit is the first attempt by former female employees at Nike to take legal action against the company since a New York Times investigation published in April described an abusive and demeaning work environment for women. The allegations have led to a staff shakeup and the departure of nearly a dozen top executives at Nike, and a commitment from CEO Mark Parker to revamp the company’s hiring and compensation practices.

But the lawsuit shows that some female workers aren’t satisfied with vague promises. The plaintiffs are seeking back pay for current and former female employees who believe their careers suffered from pervasive sexism at Nike’s corporate headquarters. They are following the footsteps of women who have filed lawsuits against Google and Uber over similar claims of sexism. But the Nike lawsuit goes even farther. The women are demanding court-ordered structural reform of the company’s hiring and compensation practices under the supervision of a court-appointed monitor.

If the Nike lawsuit is succeeds, it would represent a landmark moment in the push for gender equality at the world’s largest sport-footwear company.

Women at Nike banded together to address alleged sexism

Women working at Nike’s headquarters in Beaverton, Oregon, said they complained to human resources managers for years about demeaning treatment and sexual harassment. They reported male supervisors who called them vulgar names and discussed their bodies, and even one who threw his keys at a subordinate and called her a “stupid bitch.” The women said their complaints to human resources didn’t change anything.

The Times report, which included interviews with 50 current and former Nike employees, described a toxic work environment for women at Nike, a boys’ club culture that excluded them from promotions and leadership opportunities.

About 10,800 people work at Nike’s corporate headquarters.

Female employees at Nike — alarmed over the departure last year of three high-level female executives — decided to distribute an internal survey to see if women at the company had experienced sexual harassment and other forms of gender discrimination, including pay discrimination.

On March 5, the survey ended up in Parker’s hands. Though the details of the survey have not been made public, the allegations were serious enough to trigger an internal investigation and a major shake-up in the company’s top ranks. Since then, at least 11 top male executives have left or said they were planning to leave the company, including the president of the Nike brand, Trevor Edwards, and Jayme Martin, the general manager of global categories.

A spokesperson for Nike downplayed the severity of the allegations against male executives, telling the Times that the problem did not reflect the company’s work culture — that it was limited to a small group of high-level managers who protected each other “and looked the other way.”

Women who talked to the Times spoke about their frustration with inappropriate behavior and a culture that rewarded men over women. In one instance, a female employee said she complained to HR about a work-related email from her supervisor in which he made a comment about her breasts. The supervisor was given a verbal warning, and the employee continued reporting to him.

Another woman complained that her supervisor had magazines of scantily clad women on his desk even after he was asked to remove them. She reported him to HR and was admonished for not confronting him about it first.

At least three women had also complained about one manager, Daniel Tawiah, for allegedly berating them in front of their colleagues. Tawiah was promoted to vice president in 2017 and was among the executives who left suddenly in March.

Aside from the staff shakeup, Nike said it has reviewed all of the company’s human resources practices and the internal complaint process.

“We created a mandatory manager training that reinforces the role of respect, inclusion, and accountability that will roll out to people managers globally in 2018. We also increased our investment in leadership training and accountability, our diversity and inclusion teams and programs, and all-employee focused programming and training on our culture,” according to the company’s most recent corporate sustainability report.

The New York Times credited women’s forceful demands at Nike for prompting such swift, sweeping changes that are rare in the corporate world, but it also prompted some cynicism about the company’s ability to address systemic problems.

“Why did it take an anonymous survey to make change?” Amanda Shebiel, a Nike employee who left in September after five years at the company, told the Times. “Many of my peers and I reported incidences and a culture that were uncomfortable, disturbing, threatening, unfair, gender-biased and sexist — hoping that something would change that would make us believe in Nike again.”

In light of their experiences with Nike’s leadership, it’s no surprise that some women are going to court to seek meaningful reform.

How an informal survey led to a lawsuit

The lawsuit filed last week captures the frustration of multiple women who tried to climb the corporate ladder at Nike, which employs more than 67,000 workers in the United States and around the globe.

“At Nike, the numbers tell a story of a company where women are devalued and demeaned. For many women at Nike, the company hierarchy is an unclimbable pyramid — the more senior the job title, the smaller the percentage of women. The inequity for women at Nike starts before they do, with decisions about starting pay,” they wrote in their complaint.

One plaintiff, Kelly Cahill, is a former brand marketing director, who said she was paid $20,000 less than the salary of a male colleague who did the same work. Cahill left the company in 2017 to work for Adidas after filing several internal complaints. Another plaintiff, Sarah Johnston, worked as a business systems analyst at the company for six years, and said her career suffered after she rebuffed sexual advances from a male co-worker. Johnston quit in 2016 after filing multiple internal complaints.

In their complaint, the women question the company’s ability to police itself and reform its practices.

They pointed out that the former head of human resources sent an email to employees in 2017 saying that the company was going to review potential pay disparities between men and women at the company.

“About one month later, Mr. Ayre sent another companywide email stating that Nike had reviewed whether there was gender discrimination, that any issues that had been identified were corrected, and that there were no remaining gender discrimination issues. Absent from Mr. Ayre’s email was any data or other support for his assertions that there were no remaining gender discrimination issues,” the plaintiffs wrote in their complaint.

The lawsuit does not give details about specific pay disparities across the company, but it cites the informal survey of female employees as evidence that it remains a problem.

They also point out that women and people of color remain vastly underrepresented in the company’s top ranks, with women in only 29 percent of the company’s VP positions across the globe.

They want to take their case to a jury.

Nike lawsuit goes farther than similar claims against Google, Uber

The challenges women described at Nike are hardly unique. Women have recently filed similar class-action lawsuits against some of America’s most successful companies, including pending cases against Google and Uber.

But the lawsuit against Nike seeks goes beyond others in its demands. Like the others, it demands that the company compensate women financially for reportedly harming their careers, and to stop the illegal practice of paying women less than men for doing similar work.

But plaintiffs in the Nike case want something even more specific. They want the court to force Nike “to develop and institute reliable, validated, and job-related standards for evaluating performance, determining pay, and making promotion decisions.” They also want a court-appointed monitor to make sure Nike complies with the plan, and they want Nike to offer back jobs to the women who left because of the alleged discrimination.

This kind of multipronged demand is known as a “structural reform mandate,” and it could involve a variety of reforms, such as making sure hiring managers don’t ask job candidates about their salary history (one culprit in perpetuating the gender pay gap), or it could involve implementing a leadership mentoring program for women at the company. These kinds of mandates are rare, but research shows they are far more effective in addressing workplace inequality than monetary damages alone.

A 2017 study by sociologists at Indiana University and the University of British Columbia analyzed the outcome of 500 major workplace discrimination lawsuits filed in federal court between 1996 and 2008. They found that court-mandated bias training and educational efforts were the least effective in addressing inequality. The most effective were the type of structural mandates listed in the Nike lawsuit: specific plans to promote the recruitment, hiring, and advancement of women or people of color who work at a company, together with a monitoring plan to make sure the company meets their goals.

“In short, specificity and oversight are key ... and prove successful in increasing managerial diversity in the wake of litigation,” the authors wrote.

None of this means it will be easy for women to hold Nike accountable if the company did violate the law. The federal courts are hostile to workplace discrimination lawsuits, as I’ve explained. And the federal courts have generally held a narrow view of what jobs can be analyzed for illegal pay gaps under the Equal Pay Act, though a recent court ruling in California broadened the Ninth Circuit’s interpretation of the law in favor of employees.

But if the Nike lawsuit is successful, the demand for structural reform at the company could become a model for other workers who want an equal opportunity to succeed.

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