For years, Nike Inc. has been under pressure for the labor
practices of its contractors in developing countries. Now, the
world's largest athletic-footwear company - known for its swoosh
icon and high-priced pitchmen - has gone to the Supreme Court to
argue for its right to free speech.
The case, to be heard Wednesday, centers on Nike's ability to
participate in public debate over its foreign business operations -
which critics call dangerous and immoral - without being held liable
for any false or misleading statements. The question is whether Nike
is engaging in commercial speech, which is subject to civil charges
if found to be false, or political speech, which enjoys greater
protection under the First Amendment.
"This case is extremely important, because the court has never
really tackled the difficult issue of how you draw the line between
commercial speech ... and what we think of as traditional First
Amendment expression," says Ann Brick, a lawyer for the American
Civil Liberties Union Foundation of Northern California. Aside from
its corporate impact, she notes, the outcome could affect labor
unions and advocacy groups, whose public statements can have a
The Nike case also reflects the difficulty of overseeing social
and environmental practices of multinational corporations -
important to some investors - in an increasingly globalized economy.
Corporate America and free-speech advocates have sounded alarm bells
over the case, warning that if Nike loses, the decision could have a
chilling effect on public discourse over matters of public concern.
Nike says it should have the same speech rights as its opponents
when participating in a debate over its factories. Critics argue
that Nike shouldn't have a constitutional right to lie.
"There are plenty of critics of Nike out there presenting their
side of the argument for citizens and consumers to evaluate," says
Walter Dellinger, a lawyer for Nike and a constitutional scholar at
Duke University. "The First Amendment leaves the resolution of that
debate up to the marketplace of ideas, not to courts or other
Medea Benjamin, founding director of the social-justice
organization Global Exchange, disagrees. Nike makes claims about
factory conditions aimed at easing concern over how its products are
made and thus, "this is commercial speech," she says. "It's supposed
to be the truth."
A test for advertising's boundaries
The Beaverton, Ore.-based company contracts out production to
some 900 factories in 51 countries with more than 600,000 employees.
Several years ago, Nike began to suffer negative publicity over
allegations that conditions in its Asian factories were dangerous
and that workers there were badly treated and underpaid.
The Supreme Court case stems from a 1998 lawsuit, in which San
Francisco activist Marc Kasky asserted that Nike made false
statements about sweatshop conditions in its Asian factories. Mr.
Kasky - saying that Nike's statements violated California's unfair-
competition and false-advertising laws - sought a court order to
financially penalize Nike. …