Nike Inc.’s workplace and culture are now coming under the legal microscope.
Two women who used to work at the active brand have sued the company — and are trying to establish class-action status — alleging that they were paid less than their male counterparts and were exposed to a hostile workplace.
A Nike spokeswoman said: “Nike opposes discrimination of any type and has a long-standing commitment to diversity and inclusion. We are committed to competitive pay and benefits for our employees. The vast majority of Nike employees live by our values of dignity and respect for others.”
The company is already under fire for the atmosphere at its home office in Beaverton, Ore.
Trevor Edwards, former Nike brand president and once a likely successor to chief executive officer Mark Parker, resigned under a cloud in March. The sudden move came after women who worked at the company conducted an internal survey on gender discrimination and presented its results to Parker. Edwards will forfeit $7.1 million in compensation when he officially steps away this month.
The suit, filed Thursday in Oregon federal court by former Nike employees Kelly Cahill and Sara Johnston, paints a broader picture of a culture where women are underpaid.
“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,” the suit said. “Women’s career trajectories are blunted because they are marginalized and passed over for promotions. Nike judges women more harshly than men, which means lower salaries, smaller bonuses, and fewer stock options. Women’s complaints to human resources about discrimination and harassment, including sexual assault, are ignored or mishandled. Male bad behavior is rarely penalized. For a woman to succeed at Nike, she must far outshine her male counterparts.”
The suit claims Nike bases starting pay for workers on prior compensation history and also evaluates employees on a curve and leaves many women in the lower-end rating scale with smaller salary increases and lower bonuses.
“Nike has been aware that class/collective members receive less pay and fewer promotions than male employees at Nike headquarters,” the suit said. “Nike is also aware that its work environment is hostile towards women. Numerous women have reported hostility and sexual harassment to Nike’s employee relations department…. Instead of addressing these complaints, HR reinforced and exacerbated the hostile work environment. Regardless of the evidence, HR has regularly found such complaints unsubstantiated, avoided taking any meaningful corrective or preventive actions, and otherwise failed to act to end the hostility towards women in the workplace.”
Johnston worked at Nike for over 10 years and resigned last year as an intermediate business systems analyst due in part to Nike’s failure to “assure a non-hostile work environment that provided equal opportunity.”
When she left, she was making $75,000 annually although she alleges her responsibilities entitled her to a promotion that would have put her into an employment category specifying pay of $85,000 to $135,000. According to the suit, shortly after she left, her job was filled by two men, both of whom were in the higher category.
The suit also claims Johnston “received inappropriate sexual propositions in messages from a male coworker” who contributed to her performance reviews. The coworker also sent her nude photographs and treated her negatively after being rebuffed.
Johnston reported this to her supervisors and according to the suit, “In response, one of the directors said, in effect, that Nike has a culture that revolves around alcohol, that Ms. Johnston should let the incidents go, that the rise of the Internet and cell phones have made drunk messages part of this generation, that she should be less sensitive to these messages, and that people should expect more such messages.”
The suit details other instances of alleged harassment and also notes Cahill worked for Nike for four years, leaving last year in a director position and making $127,000 — which she claims is about $20,000 less than a male director on the same team.