BEAVERTON, OR: Nike is preparing its response to a decision by the California Supreme Court concerning statements made about its business practices."(We have) great concern over the impact the ruling has on our ability to be engaged in the discussion of what is going on in our business," said Jim Carter, Nike general counsel. "The ruling adds an element of concern about public statements."
Last week, the court ruled on a lawsuit brought by Marc Kasky, which alleged that Nike was violating California's laws against false advertising because it lied about its factory conditions overseas. The issue was Nike's response to activist claims about these conditions.
In a 4-3 decision, the court ruled that Nike's public communications on this issue were not protected by the First Amendment. Under the California statute, such speech is branded commercial speech.
The ruling could have a chilling affect on the company's PR strategy.
Nike now faces a lawsuit by Kasky, who claims the company lied in press releases and editorial letters.
"For consumers, (the ruling) means a lot,
said plaintiff's attorney Alan Caplan of Bushnell Caplan & Fielding. "Now if a company is going to offer up any information regarding specifics of their products, they have to tell the truth."
But Nike's PR team said nothing will change from a tactical or strategic PR perspective. "From a purely operational point of view, there won't be any change in that function for us,
said Vada Manager, Nike's director of global issues.
Nike's PR and legal teams say the ruling violates the First Amendment, and are preparing editorial responses. The Northern California chapter of the American Civil Liberties Union has come out in support of Nike.
PR pros see far-reaching implications. "Companies are going to be less willing to talk and go on record,
said Julius Turman, VP of litigation communications with Ketchum, an agency that has worked for Nike.
See Paul Holmes, p.7.