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Why Nike’s Working Double Time to Keep This ‘Embarrassing’ Data Under Wraps

Four years since allegations of harassment and misconduct prompted a months-long shakeup in Nike leadership, a resulting gender-discrimination lawsuit is at a pivotal point in its much-obscured journey.

First filed by former Nike employees Kelly Cahill and Sara Johnston in August 2018, the complaint has come to cover four named plaintiffs. They allege that the sneaker giant’s policies and practices caused them to be compensated and promoted less than male colleagues and that it engaged in an intentional, company-wide and systematic pattern of discrimination affecting starting salary, annual ratings, annual salary increases, bonuses, promotions, job assignments and a hostile work environment.

In January, the plaintiffs filed a motion asking the court to certify a class of 5,000 women—a move that, if approved, could encourage Nike to settle sooner. Though that matter has yet to be settled, a new, related dispute has emerged over exactly how much of that motion should be made public.

Since June 2019, the litigation has proceeded under a protective order, a measure taken to allow legal parties to more freely share confidential information. Effectively, though, this has meant that much of the back and forth between Nike and the plaintiffs has remained hidden from the public.

The day after the plaintiffs filed to make their complaint a class action, they reached out to Nike declaring their desire to make the motion public, according to a March 23 legal filing. They asked Nike to identify which parts of their motion should remain sealed. For a little more than two months, the parties negotiated what to redact.

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After reaching an impasse on a few remaining subjects, Nike filed on March 15 to seal specific content included in the plaintiffs’ January motion. The plaintiffs submitted their response on March 23, to which Nike filed a reply on April 6, a redacted version of which was filed Friday. In its reply, the company persisted in arguing for the redaction of three subjects.

Statistics on the alleged ‘pay gap’

Nike’s filing dedicated the most space to arguing for the redaction of aggregated statistics on employees’ salaries. This information, it contended, “would be of great interest to Nike’s competitors and could be leveraged against Nike to its competitors’ advantage in competing for the same talent.” Disclosing the information, it added, would give other brands “a unique and otherwise unavailable roadmap” to its compensation structure and the skill sets it is emphasizing.

Instead of publishing the dollar figure and percentages of the “alleged shortfalls in pay,” Nike pushed for simply publishing data on the standard deviations—statistical measures used to determine the extent of variation across a set of values—from an expert’s analysis. According to Nike, that expert, economist David Neumark, found no disparity in pay during “nearly the entire putative class period.” Disclosing the shortfall amounts, it added, “only would serve to promote public scandal grounded in misleading analyses.”

The plaintiffs, however, argued “the sizable” dollar amount and percentages of the “pay gap” are “integral” to its claims and its motion for class certification. Unlike Nike, it held that the standard deviations from Neumark’s analysis indicated statistical significance.

“Given the importance of statistics to plaintiffs’ claims, the aggregated statistics will be integral to the court’s ruling on class certification, and the privacy and business interests that justify sealing can be outweighed by the public’s right to access information necessary to understand the basis for the court’s ruling,” the plaintiffs wrote in their March 23 response.

The plaintiffs also countered the footwear brand’s claims that the data would expose proprietary information. According to the filers, the comparative figures only show how much less women are paid, promoted or assigned to higher-level positions than similar men as either a percentage or a difference in actual dollars paid. “The degree to which Nike underpays, underpromotes or assigns women to lower-leveled jobs than men is neither proprietary information nor a trade secret,” it added.

Furthermore, it suggests that Nike’s argument that these numbers would promote scandal reveals that the company “apparently finds these statistical results embarrassing.”

Names of former employees linked to allegations

Nike is also pushing to redact the names of three former employees “where they are alleged to have involvement in or contributed to sexual harassment and/or gender discrimination.” Tying these names to what it says are “unsubstantiated” allegations is irrelevant to the motion for class certification, it argued.

In disclosing these names, it added, “the plaintiffs would only risk harming the reputations of three individuals who were never found to have engaged in gender discrimination or sexual harassment.” By insisting that their identities be revealed, Nike argued the plaintiffs “are trying to promote scandal.” The company held that it is fine allowing “non-identifying descriptions” of allegations to be disclosed.

The plaintiffs, however, say they have agreed to the “majority” of Nike’s proposed redactions where “legitimate privacy interests are implicated,” including for the three disputed individuals. Instead, they say they only oppose redactions related to information that is already public. That plaintiffs made allegations against these three unnamed individuals is a publicly known fact included in their first amended complaint and an Oct. 31, 2019 order issued by the court, they said.

The plaintiffs’ March 23 filing then immediately went on to quote the Oct. 31 order: “With respect to the personnel records of former Nike executives Trevor Edwards, Daniel Tawiah, and David Ayre (RFPs 34-38), the motion is granted to the extent the records contain complaints of sexual harassment/discrimination linked to policies of pay/promotions and job duties either by the named executives themselves or regarding actions these executives may have taken to condone pay/promotion and job duty discrimination decisions of lower level managers.”

Formerly Nike brand president, Edwards was the first high-level executive to announce his retirement back in March 2018. His announcement came shortly after Nike circulated an internal memo referencing inappropriate workplace behavior. Tawiah was named the following month in an expansive New York Times article detailing Nike’s corporate culture. The Times reported that multiple women had reported Tawiah, formerly a senior director for Nike’s digital brand in North America, to human resources for “berating” them in front of peers. Ayre was formerly the vice president of human resources at Nike until July 2017. In their original complaint, the plaintiffs alleged he “caused and fostered a hostile work environment towards female Nike employees.”

“Nike is incorrect that these proposed redactions do not directly affect the litigation, because the allegations against these executives are important to plaintiffs’ case, as executives had extensive involvement and control over the challenged pay and promotion practices,” the plaintiffs argued in their March 23 filing.

While the plaintiffs hold that they only wish to make the three individuals’ names public in relation to already public information, Nike disagreed. It argued that The New York Times article—which plaintiffs also said already included their claims—did not “state or allege that any of them had engaged in or condoned sexual harassment or discrimination.” The amended complaint, Nike added, “did not explicitly assert that any of these executives condoned pay/promotion or job-duty discrimination decisions of lower-level managers or that they engaged in sexual harassment or gender discrimination.”

The Oct. 31, 2019 order, it continued, only forced Nike to reveal complaints should they exist. “Allowing discovery for such documents does not mean that they exist and thus the references to these executives in the context of the October 31, 2019 order are appropriate and thereby distinct from the references Nike seeks to redact through this motion,” Nike wrote.

Descriptions of Nike’s pay equity and promotional analyses

Nike is additionally seeking to redact “privileged” descriptions of its pay equity analyses. The plaintiffs describe this information as “foundational facts” of these studies. Nike says the redactions “have literally nothing to do with the substance of plaintiffs’ motion for class certification.”

Nike is also looking to redact advice from legal counsel regarding its promotion analysis. This information, it argued, is “a confidential business strategy.”

The plaintiffs provided more information about this study noting that Nike chief human resources officer Monique Matheson had announced to employees that the company would “be studying time-in-job and the pace of promotion across our employee base – with a strong focus on women and [people of color] – to understand how this impacts representation.” Nike allegedly agreed that this information should not be sealed. However, it says Nike has asked the court to seal something—the information is redacted—that it believes “the public and particularly the putative class have a strong interest in knowing.”

Media organizations request to unseal information

On April 8, two days after Nike’s most recent reply on the redactions, Ellen Osoinach with the Reporters Committee for Freedom of the Press filed a motion on behalf of Insider, The Oregonian and the Portland Business Journal to unseal judicial records filed under seal because of the protective order.

“Thousands” of current and former Nike employees and their families will be impacted by how the court rules on the plaintiffs’ request for class certification, Osoinach contended. Nike’s status as “one of the most well-known multinational corporations in the world,” she added, further means that its employment practices are “closely watched by the public.”

“Despite the significant public interest in this case, the parties have filed numerous documents relating to class certification entirely under seal or with significant redaction, leaving the press and the public with scant access to the underlying facts or arguments and limited vantage to understand the details of this important judicial proceeding,” Osoinach wrote. “Media intervenors seek to enforce the public’s common law and First Amendment access rights to these sealed documents.”

Though the filing would seem to take the side of plaintiffs, who are seeking to provide the public with information that Nike wishes to redact, Osoinach argued that neither party had met the “compelling reasons” standard necessary to justify the secrecy of their filings.

Furthermore, she held that public interest at this particular moment is “particularly strong” given that class certifications can determine the legal rights of individuals not currently before the court. “Thus, the public has an interest in knowing the legal basis of the class motion and response to class motion, as well as the facts and arguments applicable to each,” she added.

Return-to-office revisited

In unrelated Nike news, the company reportedly updated its remote-work policy weeks before employees will be required to return to the office at least three days per week.

Earlier this month, Insider reported that a leaked internal email introduced a new benefit allowing office employees to work four weeks fully remote per year. They will be able to use the policy in one-week increments and combine it with time-off and sabbaticals, Insider said. It will go into effect May 1.

“We heard your call for greater work location flexibility,” Matheson reportedly wrote in the email.

Nike announced its most recent return-to-office plan in February. Employees will be required to move to a “3/2 hybrid work” schedule May 3. A so-called “transition month” was scheduled to kick off April 4.

A current executive told Insider in January that Nike, like other major companies, was seeing job departures climb, “especially in the technology workforce.” In an internal February meeting that Insider claimed to obtain a recording of, global chief digital information officer Ratnakar Lavu told employees he was “concerned that attrition is growing.”

In a survey of 1,200 U.S. tech employees, TalentLMS and Workable found that 56 percent see flexibility/remote work options as a top criterion when selecting a company. According to that same study—the pair released their results in October—72 percent were thinking of quitting their job in the next 12 months.