Nike Inc. has agreed to pay $7.6 million to settle a race discrimination lawsuit brought by current and former African-American employees at its Niketown store on Michigan Ave, the athletic-shoe giant said Monday.
Nike also submitted to independent monitoring of the store and the appointment of a compliance officer at its corporate headquarters in Beaverton, Ore. Under the consent decree, the company admitted no wrongdoing.
In a statement, Nike said it reached a legal settlement to "avoid continued and protracted litigation."
The deal eliminates a potentially damaging public relations problem for Nike. 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.
The suit, filed in 2003, gained momentum last year when a federal judge in Chicago granted the case class-action status, expanding the base of plaintiffs to include 400 current and former African-American employees. At issue is 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.
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.
Attorneys for the class could not be reached immediately for comment.
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