[corp-focus] Nike Gets a Pass

[Robert Weissman]

Nike Gets a Pass
By Russell Mokhiber and Robert Weissman

Why did Marc Kasky settle his case against Nike for a $1.5 million
payment to the Fair Labor Association, a group controlled by Nike and
other major shoe manufacturers?

Kasky, described in various press reports as a "labor activist" and
"gadfly," certainly deserves credit for filing a daring suit against
Nike in a California state court, alleging that the company lied about
its operations overseas and how its contractors treat workers.

In 2002, the California Supreme Court rejected claims by Nike's lawyers
that the First Amendment immunized the company from being sued under
state consumer protection laws.

Nike appealed to the U.S. Supreme Court, and in a victory for Kasky
earlier this year, the Court sent the case to trial in California.

But earlier this month, Kasky settled his claims against the shoe giant.

Under the terms of the settlement, Nike agreed to make a payment of $1.5
million to the Fair Labor Association (FLA) in Washington, D.C.

A joint press release issued by Kasky and Nike says that "Mr. Kasky is
satisfied that this settlement reflects Nike's commitment to positive
change where factory workers are concerned."

Sweatshop activists last week expressed outrage at the settlement,
pointing out that the FLA is controlled by Nike and the shoe and apparel industry.

"Nike and its corporate buddies basically run the FLA," said Andy Eisen,
a student at Lake Forest College and a member of United Students Against
Sweatshops (USAS). "It's governed by and for the corporations that it's
supposed to monitor."

Corporations are given six of the seats on the FLA board, and the FLA
charter states that all major decisions require a super-majority of the
corporations on the board to be approved.

Students also attacked the FLA's operations as secretive and
ineffective, saying that most important information is being kept from
the public.

"This an organization that has been around for years, and yet has
virtually no concrete accomplishments that it can point to," said Julia
Plascencia, a student at the University of California Los Angeles. "It's
not like we're asking the impossible -- a truly independent monitoring
organization like the Worker Rights Consortium regularly releases full
reports about specific factories to the public, while the FLA took years
to release a single report that didn't even include the addresses of factories."

Kasky, who works at the San Diego Naval Training Center Foundation in
San Diego, California, did not return calls seeking comment.

He has filed similar lawsuits against other companies, including one in
1997 against Tarrant Apparel Group. That case was dismissed by a
California state court.

Kasky's lawyer, Alan Caplan, of Caplan & Fielding in San Francisco, did
not return calls seeking comment.

The New York Times reported earlier this month that "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."

Jeffrey Ballinger, executive director of Press for Change, the group
that initiated the corporate campaign against Nike in the 1990s, said
that he met with Kasky's lawyers Alan Caplan and Phil Neumark in Italy
in July of this year to discuss discovery for the upcoming trial.

Ballinger said that lawyers mentioned nothing about a possible
settlement -- they just spoke of the upcoming discovery and trial.

After hearing of the settlement, Ballinger called Caplan to try and get
an explanation, but Caplan did not return his call, either.

"The terms of the settlement were totally set by Nike," Ballinger said.
"If any money is going to come out of Nike to settle this kind of case,
it should go to workers who were cheated by Nike. End of story. Nike has
never been forced to pay for the cheating that has taken place at their
contract factories -- cheating that has been documented at their
Indonesian factories for several years. Tens of thousands of workers
being paid an illegal training wage. Nike admitted it in 1996."

Ballinger estimates that Nike owes Indonesian workers somewhere between
$8 million and $12 million, "just for the wage cheating."

"You can talk about the sexual harassment," he said. "Some sort of
compensation ought to be paid there. By Nike's own admission, there was
widespread sexual harassment. There was a report in 2001 that came from
a Nike-funded faux NGO -- the Global Alliance."

Ballinger points out that Nike has spread its wealth around to various
public interest groups -- to Jesse Jackson's Rainbow Coalition, to The
Robert F. Kennedy Center for Human Rights -- in a largely successful
effort to buy silence on the issue of the abuse of Nike's workers.

Discovery in the Kasky case had the potential to open the Nike files to
public scrutiny, to document the mistreatment of workers throughout the
world, and the flow of money from Nike to public interest groups.

And Kasky and his lawyers settle this potential historic case for a $1.5
million donation to a group controlled by the shoe and apparel industry.
And now they won't talk about it.

End of story?

We don't think so.



Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
Reporter, http://www.corporatecrimereporter.com. Robert Weissman is
editor of the Washington, D.C.-based Multinational Monitor,
http://www.multinationalmonitor.org. They are co-authors of Corporate
Predators: The Hunt for MegaProfits and the Attack on Democracy (Monroe,
Maine: Common Courage Press; http://www.corporatepredators.org).

(c) Russell Mokhiber and Robert Weissman

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