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Nike Gender Lawsuit: What No One’s Really Talking About

The latest batch of court documents to come out of the lawsuit brought against Nike by past and present female employees, offered salacious details of a toxic male culture and even an account of oral sex being performed by a subordinate on a member of management in a company exercise room.

What any of that means remains to be seen for the world’s biggest shoe company and its list of plaintiffs, whose numbers have dropped significantly from as many as 5,200 after Oregon U.S. District Court Judge Magistrate Jolie Russo ruled on Nov. 29 that class action status couldn’t be applied to this group of plaintiffs. The judge ruled against class action because its side could not “establish a common question of law or fact capable of class-wide resolution for starting pay and their disparate impact claims.”

The ruling reduced the number of plaintiffs to only the 14 who complained of direct discrimination. It also increases the chances of the case, which was originally brought in 2018, of going to trial, as cases with large class action certification tend to be settled beforehand.

Russo’s decision, which attorneys for the plaintiffs say they will appeal, may seem like a victory for Nike. But as employment attorney James Vagnini, from the New York-based firm Valli Kane & Vagnini points out, avoiding a once-and-for-all class action suit might not be the best outcome for a company as big as Nike, left with a huge target on its back.

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“They really have to think about it, tactically, from a cost perspective, that maybe it’s better to pay one class action case,” Vagnini said. “If I’ve got women in 10 states, I can make 10 claims in small class action or individual suits, and I can bring them all as a way to bury them in legal costs and get tremendous amounts of media attention. Once the class action fades, that’s a way of crippling these companies publicly… Time’s up, and when you have this evidence that exposes employers, it helps bring out witnesses.”

Vagnini, who back in 1996 was part of the litigation team that sued Smith Barney for its practices of sexual harassment, much of which took place in the investment firm’s infamous “boom boom room,” and who is currently the lead attorney in a gender pay case against Omni Hotels, also said that class action status can be frustrated when trying to bring sexual harassment and unequal pay claims in the same case.

“The harassment element of claim can be difficult to keep together once crossing state lines—it’s very individualized,” Vagnini said. “Pay claims are generally still easily maintained as class action. What comes more under attack are individualized types of behavior that show a policy or practice in place. If you have women in multiple locations harassed by multiple managers or coworkers, it’s harder to maintain (that the company) is turning a blind eye, not taking the proper steps.”

Pages and pages of the court filings released ahead of Russo’s ruling on class action status involved plaintiff requests for documents and emails—with detailed keyword searches—that defendants have yet to hand over to the court, even four years since the initial filing.

Vagnini said it’s not an uncommon situation for defendants to complicate and stall what might seem to be a simple process, but these situations almost always have a common ending.

James Vagnini

“Often times you get them at the end in what we call a ‘data dump,’” Vagnini said. “They’ll hand over all these little, innocuous files and then, ‘oh, we just happened to find the files related to another case.’”

Vagnini said there’s little-to-no chance a plaintiff would delete or ultimately refuse to hand over requested documents.

“There’s professionals that do that (find deleted files) — nothing goes away,” Vagnini said. “No lawyer’s going to lie to a court or go to prison for that. It’s a lawyer’s job to deflect and to manipulate, but ultimately, a lawyer’s not going to put their license on the line.”

Vagnini said that proving a disparity in pay between the sexes is the easier charge for plaintiffs in a case like Cahill, et al vs. Nike, to prove. And getting the facts can be as easy as making a request for payroll records to the company’s HR office.

“You start small and expand; ask for access to emails, payroll records and have lawyers and third parties analyze it and report back to the company,” Vagnini said, adding that sometimes companies will make the mistake of assuming their conversations with their attorneys are confidential, when, in fact, if the content is about an HR matter, it may not be privileged. “You make an assessment of the wages, clearly show a disparity and the employer has to ask themselves — ‘do I roll the dice and wait to get sued?’ More often than not, they stick their head in the sand and wait. It can be easier for them with a class action to deal with it once and for all. Otherwise, they can get sued in all the states (they operate in).”

Plaintiffs in the Nike case contend women there were paid an average of $11,000 less than their male counterparts. Court documents cite Nike’s ‘job architecture’ with its ‘job groupings’ and ‘bands’ as being the tools with which this disparity was achieved. Vagnini says it matters little whether top management at Nike was consciously aware its policies were hurting its female employees, or intended it to be so. He says courts hold companies accountable for being aware of these discrepancies in their payroll.

“It’s called disparate impact. If the policy has an impact that effects (workers) disproportionately—whether intended or not—you can still bring a claim of discrimination,” Vagnini said. “Every corporation has its bands and so on, and, on its face, there’s nothing wrong with that. The issue is what are you doing with females vs. males with that band, manipulating one over the other. We craft cases that way from the beginning. If we don’t know certain facts, we’ll claim intentional discrimination and also claim disparate impact.”