WASHINGTON - Last week, Nike awarded a widely sought-after contract for what was supposed to be a corporate social responsibility campaign to APCO Worldwide.
But in the light of last month's unfavorable ruling by the California Supreme Court, the company is reconsidering the size, intent, and feasibility of the campaign.
The original request for proposals outlined an initiative to combat perceptions of Nike as a poor global citizen, stemming largely from accusations of running "sweatshops" in third-world countries. But as the process unfolded, the nature of the campaign was cast into doubt after a ruling by the California Supreme Court allowed a lawsuit against the company to proceed.
That lawsuit contends that comments made by Nike in press releases should be subject to the same laws as statements made in advertising. The plaintiff, San Francisco activist Mark Kasky, claims that the company lied several years ago regarding working conditions in overseas factories. Nike has appealed the lawsuit, and is confident it will go to the US Supreme Court.
With the increased scrutiny on all its corporate communications, Nike is apparently hesitant to launch any major campaigns that make claims about its work practices. Furthermore, with a high-profile case likely headed for the Supreme Court, the company believes it will need as many friends in Washington as it can get. APCO, largely staffed by former members of Congress and other political operatives, is well-regarded for its aptitude in making connections between politicians and its clients.
The price tag attached to the contract is placed somewhere between $500,000 (?338,000) and $1m. A source close to the negotiations said no decision had been made yet, but that the lawsuit would undoubtedly alter the resulting campaign and its budget from what was originally intended.
At contention in the potential lawsuit are statements made by Nike in letters to newspaper editors, university presidents and athletic directors, as well as in press releases. The company claimed that all its employees in China, Indonesia, and Vietnam were paid double the minimum wage, received free meals and healthcare, and worked in an environment consistent with local health and safety regulations.
In his lawsuit, Kasky claims Nike violated laws prohibiting false or misleading statements in commercial speech. The ruling by the California Supreme Court deemed only that Kasky's lawsuit could go to trial. It made no judgment as to the truth of Nike's statements.
Nike contends that "commercial speech" does not include press releases or letters to editors and universities.
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