Nike reins in California PR following �1m settlement

BEAVERTON, OR: Sportswear giant Nike intends to curtail some of its corporate PR efforts after it reached an out-of-court settlement with a consumer activist.

BEAVERTON, OR: Sportswear giant Nike intends to curtail some of its corporate PR efforts after it reached an out-of-court settlement with a consumer activist.

Mark Kasky had sued the firm under a Californian law on unfair competition and false advertising, claiming its statements about overseas factory conditions in letters, pamphlets and public statements were misleading.

Nike admitted no liability, but agreed to spend an extra ?1m on its workplace-related programmes over the next three years.

Now Nike, based in Beaverton, Oregon, has announced that it will cut back on a number of PR efforts in California, where the case was first brought in April 1998. For example, it will not release its corporate social responsibility report externally for the fiscal year 2002, and will limit its participation in public events and media engagements in the West Coast state.

Nike?s decision to settle the suit left unresolved the core legal issue: whether free-speech protections extend to corporate statements. Last month?s settlement followed a June decision by the US Supreme Court not to rule on the issue and to send the case back to the Californian courts.

Nike said the suit should be dismissed on the grounds that the PR effort enjoyed free-speech protection under the First Amendment.

Kasky?s lawyers argued, however, that the words of the firm?s spokespeople should be considered ?commercial speech?, like advertising, and should not be protected by the constitution.

Nike V-P of corporate comms Kirk Stewart said: ?We will have to be more restrictive surrounding communications ? as will every other company that does business in California.?

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