Nike hints at future silence after high court dismissal

WASHINGTON - Nike executives warned last week that they may be forced to further restrict their already curtailed PR activities following the US Supreme Court's June 26 dismissal of the company's free-speech case.

The court decided on technical grounds not to rule on whether Nike can be sued for making misleading statements in its PR materials, effectively allowing the case by California activist Mark Kasky to go forward. Nike and its supporters had long cautioned that allowing the suit would have a chilling effect on corporate spokespeople, who would fear being sued for making general statements about their companies.

Kasky filed suit against Nike in 1998 claiming that the company had issued misleading press releases in order to defend itself against accusations of unfair labor practices. Kasky said that such PR materials should be considered "commercial speech," which, like advertising, is not protected by the First Amendment.

Nike claimed that the suit should be dismissed because the statements were made in the context of a political debate, and should therefore enjoy First Amendment protection.

Vada Manager, director of global issues management, said the case had been negatively impacting Nike PR activities for more than a year, "which strikes at the heart of one of our central arguments: that the public and consumers will be deprived of full transparency and useful information about the companies they do business with.

"We had committed ourselves to issuing an annual corporate-responsibility report, but until the legal situation becomes a little more clarified, we have decided to forgo that," he said. He added that in the past year, Nike has declined inclusion in "key social-responsibility benchmarks such as the Dow Jones sustainability index and a few others that came our way."

Now that the court is allowing Kasky's case to go forward, Manager suggested that Nike may be forced to restrict its communications even further. "We may even become a little stricter because we are now potentially facing a direct trial," he said. "We are trying to determine what additional steps we have to take in order to reduce our litigation risk, but at the same time have meaningful engagement with [the public]."

Until the legal ramifications of the ruling become clear, all media requests, especially those concerning corporate-responsibility issues, will be closely vetted by Manager and legal counsel to determine whether "it would cause us any legal trouble in California."

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