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Nike’s Busy November Included Big Wins in Texas and Oregon

For Nike, November was the best of times, and it was the worst of times.

The world’s biggest shoe brand suffered through embarrassing separations with sports star ambassadors and saw its stores and supply ravaged by organized retail crime, but it won a huge victory in an Oregon courtroom and another in the chambers of a suburban Dallas commission.

Nike avoided a potentially colossal mess in a U.S. District Court in Oregon when on Nov. 29 Judge Magistrate Jolie Russo ruled that a sex discrimination lawsuit, which has been fomenting for four years, could not be tried as a class action, due to what she determined to be failure to prove that practices at the company affected the “entire putative class of 5,200 female employees.”

The judge ruled that the list of plaintiffs could run only 14 deep, drastically reducing the impact that a massive class action suit could have had on the sneaker giant.

Attorneys for the plaintiffs had contended that female employees at Nike were paid an average of $11,000 less annually, and that a toxic culture that included repeated acts of sexual harassment and bullying.

It wasn’t a total win for Nike, however, as plaintiffs have vowed to appeal the decision, which, as oregonlive.com reports, is made easier by the fact that Russo is not a full federal judge, meaning they can have the same argument heard by the Hon. Marco Hernandez, the chief U.S. District Court judge in the District of Oregon.

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That development came on the heels of great news for the Just Do It company, when the Dallas County Commissioners office finally granted the 10 years of tax breaks Nike had been looking for when it opens its new $60 million warehouse in Wilmer, Texas.

The commissioners had been holding up approval for months over concerns about what it perceived as Nike’s lack of diversity, but on Nov. 1 the commission gave the go-ahead on a four-to-zero vote with Dr. Elba Garcia the sole commissioner abstaining from the vote.

“I appreciate that [Nike] came back for a second round of scrutiny,” commissioner John Wiley Price said after a nine-person delegation finished outlining the sneaker brand’s diversity, equity and inclusion priorities and progress. He suggested that the close review was warranted as “I know who’s buying their products” and “who was still spending” during Covid when federal stimulus payout padded the coffers of many discretionary retailers.

The tax breaks will cost the city of barely 5,000 residents, 22 miles southeast of Dallas, $68,000 per year, but in return it will get at least 500 jobs paying an average of $37,000 per year. Garcia, however, thinks Nike can “do better.”

“Especially’s in today’s economic environment, $37,000 doesn’t cut it for me,” she said.

In September, with its 50 percent tax break still in doubt in a county of 2.5 million where two thirds of the population is Black or Latino, Nike made a groundbreaking appointment of Latina Monica Gil to its board. Garcia again took issue with the development. “I challenged you and you brought one person [to the board],” she said, suggesting that the addition of a single Latinx member fell short of meaningfully diversifying Nike’s leadership ranks.

Garcia hopes Nike takes the commission’s feedback “to heart.” “I really think…have a long way to go when it comes to diversity and inclusion,” she said.

Meanwhile, the recent scourge of organized retail crime hit Nike as hard as any company last month.

Roughly 20 suspects broke into a Memphis boutique in mid-November and absconded with $100,000 worth of Nike sneakers, along with toys meant for a toy drive. This came after thieves in the southern city stole $800,000 in Nike goods after ransacking a pair of storage trailers two month ago, prompting StockX to temporarily halt sales of a particular shoe style.

In Portland, near the birthplace of the Nike empire, stealing became so prevalent at the brand’s original factory storefront that it had to close down for several weeks after rampant thefts. The outlet mall housing the store said police had been called for shoplifting at the store 437 times since 2019.

A Dick’s Sporting Goods in Kansas was the target of more Nike theft in October with more than $4,100 worth of merchandise leaving the shelves. Last month, thieves in Southern California made off with more than $17,000 of Nike merchandise in a pair of break-ins. Smash-and-grabs have become so commonplace and predictable for Nike product that earlier this month employees got ahead of the problem by leaving just one shoe in each shoebox in a store room at an indie boutique in Texas.

Sometimes thefts are just inside jobs within the supply chain, which happened last month in Michigan when a FedEx driver, tasked with delivering $96,000 in merchandise—much of it Nike—decided to keep it for himself.

And when folks weren’t stealing Nike’s shoes in November, they were stealing the brand’s iconic shoe designs.

Twice last month, Nike found itself having to take shoe designers to court for copyright infringement.

At month’s end it was in a New York courtroom filing suit against a pair of YouTube celebrities known as Kiy and Omi for allegedly copying the design for the Air Jordan 1 and Dunk sneakers and passing them off as their own.

On Dec. 2, a California District Court received Nike’s writ for trademark infringement against the rapper Lil’ Gnar and his line of apparel by the name of Gnarcotic. Nike complained that Gnar’s latest brand stole from its Dunk model and that the company continued to promote and sell the shoe even after it had told Nike officials it would cease and desist.

In the PR department, November was an singular disaster for the Swoosh with free agent NFL wide receiver Odell Beckham Jr. filing a $20 million lawsuit against the company for breach of contract.

Beckham argued he was unfairly docked for payment because he didn’t wear the right shoes and gloves, but that he only did so because Nike did not provide him with the right attire when he joined the Los Angeles Rams in the middle of the 2021 season. He also said he was owed because the company agreed to pay him the matching deal he would have gotten from Adidas in 2017, after he decided to remain loyal to Nike as a sponsor.

“Today, I’m taking a stand not just for me, but to set a precedent for all athletes who have dedicated their life to the sport they love—especially those who don’t have the means to stand up for themselves,” Beckham tweeted. “We are held responsible for fulfilling our obligations under our contracts, but we also have to hold powerful companies like Nike accountable for honoring their commitments too.”

The worst of it though had to be Kyrie Irving saga, which saw Nike shelve all of its highly anticipated Kyrie 8 series shoes and finally cut ties with the Brooklyn Nets guard after he promoted an antisemitic film on social media.

Irving, who goes by Hélà on Twitter and Instagram, was suspended by the NBA for five games after he initially refused to apologize for the post and Nike found itself in a no-win situation, especially after Adidas cut ties with Kanye West after his antisemitic tirade.

As November gave way to December, Nike cut ties with Irving, prompting the former Duke star to take the floor in a Dec. 7 game against the Charlotte Hornets with the Nike logo on his shoes covered in black tape. On one side of the tape, Irving wrote “I am free, thank you God… I am,” and on the other, “Logo here.”