Illinois Discrimination Costs Nike $7.6 Million

August 6th, 2007 Posted by Amelia

Athletic-shoe manufacturer Nike recently announced that it will pay $7.6 million to settle a discrimination suit brought by African-American employees at the Niketown store on Michigan Avenue in Chicago.

The accusations are especially ironic, considering that one of Nike’s primary markets for shoes and clothing is young African-Americans, especially young men between the ages of 13 and 25. Nike has relied on prominent black athletes, such as Michael Jordon and Kobe Bryant, to market its products.

This is just the latest example of a major retailer biting the hand that feeds them. Earlier this year, Motherhood Maternity, a retail giant employing 5,000 people, paid $375,000 to settle an EEOC pregnancy discrimination lawsuit.

The Chicago Niketown is located on “the Magnificent Mile,” Chicago’s landmark downtown destination shopping district.

According to the lawsuit, Nike segregated African-Americans into lower paying jobs as stockroom attendants and cashiers at the posh store. Nike failed to post job openings for higher-paying sales positions, denying those opportunities to black employees. Many African-American employees were hired as part-time workers, while others were given full-time positions. This resulted in the African-American workers not receiving benefits including health insurance and paid vacations.

In even more serious allegations, the suit claims that African-American employees were subject to searches when leaving the store, while Caucasian employees were not searched. The store also gave discounts to other employees, while denying them to African-American workers.

The store management also allegedly applied company policies differently, resulting in many black employees being disciplined for problems in attendance and sick leave, while other employees were not punished for similar behavior.

As a part of the settlement, Nike also will submit to independent monitoring of the store.  A compliance officer will be installed in the Nike corporate headquarters in Beaverton, Oregon, under a settlement reached with the EEOC, or Equal Employment Opportunity Commission. In a statement, the retail powerhouse said that it reached the settlement to avoid “lengthy and protracted litigation.”

The suit made headlines last year, when a Chicago judge granted class-action status to the more than 400 current and former African-American employees. The suit, originally filed in 2003, charges that Nike systematically discriminated against black workers in hiring, promotions, benefits and discipline. The suit charges that these actions created a hostile working environment.

Like nearly every major corporation, Nike has policies that address discrimination in the workplace. But, corporate officers admit that the enforcement of these policies is left entirely to the discretion of the individual store manager.  According to the plaintiffs, that resulted in African-American employees being singled out by management.

In a similar suit earlier this year, the EEOC alleged that the parent company of Motherhood Maternity, Mothers Work, Inc. refused to hire female applicants who were pregnant. The suit also alleges that when LaShonda Burns, complained, she was unfairly disciplined. Burns was an assistant manager who was fired because supervisors believed that she was pregnant, and because she objected to the company’s policy of discriminating against pregnant women.

Motherhood Maternity operates more than 1,000 retail stores including Mimi Maternity, A Pea in the Pod and Maternitymall.com. The suit alleges that the company committed systematic discrimination by implementing a policy not to hire pregnant women.

Under the Pregnancy Discrimination Act, employers cannot legally refuse to hire an employee, or fire her, simply because she is pregnant.

Motherhood Maternity was founded in 1982 and employs over 5,000 people. It is the leading designer and retailer of maternity clothes in the U.S. with more than 1,000 stores nationwide and a large internet retail operation.

Under the three-year consent decree agreement, Motherhood will pay Burns $135,000 in damages, $50,000 in back pay and $130,000 to her attorney. In addition, three women who were denied employment because they were pregnant will each receive $20,000.

The company also agreed to train all of its current and future Florida employees on the new anti-discrimination policy and federal law. Motherhood will also report all pregnancy discrimination complaints to the EEOC twice per year.

“It is shocking that a corporation whose market is pregnant women would refuse to employ them and then retaliate against a woman who complained about the practice,” said Nora Curtin, supervisory trial attorney of the Miami District Office. “We are pleased that this settlement will steer this important company to better treatment of pregnant employees.”

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1 Comments >> Posted in Discrimination,Employment Laws,Equal Employment Opportunity,Federal Labor Laws,Hostile Enviroment,Illinois,Regulations

  1. Posted by: Major 2007 Racial Harassment Settlements - Labor Law Center Blog

    [...] In August, Nike settled a race discrimination suit for its Chicago, Illinois Niketown location. The company paid $7.6 million to about 400 African-American employees. The EEOC alleged that Nike hired African-American employees only for part-time jobs as stock clerks and cashiers, and systematically denied them the opportunity to be promoted into higher-paying management and sales positions. [...]