Three Nike shareholders filed a lawsuit on Friday alleging that Nike’s board of directors — and co-founder Phil Knight — didn’t do enough to address complaints about “bullying, sexual harassment, and gender discrimination” against female employees.
First reported by the Portland Business Journal, the multi-million dollar lawsuit alleges that members of Nike’s board failed in their fiduciary duties and sullied the company’s reputation for allowing a culture of sexism and discrimination, according to the Willamette Week.
Nike has spent months grappling with a workplace scandal that has claimed more than a dozen of the company’s executives including then-Nike Brand President Trevor Edwards. In August, two women, Kelly Cahill and Sara Johnston, filed a lawsuit against Nike Inc. alleging the company discriminated against them in pay and career advancement. This latest lawsuit, filed by shareholders Alison Sherman, Lisa Udine, and Shiva Y. Stein, is the second since the scandal was made public.
“This case arises from Nike’s systematic ‘boys’ club’ culture, which resulted in the bullying, sexual harassment, and gender discrimination of the Company’s female employees,” the suit states. “Nike’s Board and numerous Company officers engaged in, facilitated, and knowingly ignored the hostile work environment that has now harmed, and threatens to further tarnish and impair the Company’s financial position, as well as its reputation and goodwill, which Nike’s success is built upon.”
According to the Willamette Week, the shareholders filing this lawsuit object to Edwards earning $26 million between 2015 and 2018 as employees allege they suffered in a toxic work environment. Edwards also got a $525,000 payout when we left the company, on top of the $9 million in unvested stock. The shareholders want all of that money — and compensation for the lost talent in women executives who left the company, damage to the brand’s value, and court settlements — to be paid back.
“The Nike board of directors must be held accountable for turning a blind eye to harassment and discrimination, and further, for rewarding the bad actors with over $26 million in compensation,” said Gustavo Bruckner, a lawyer for the plaintiffs, in a statement. “Stockholders will no longer allow the brand to be harmed.”
Nike has not responded to this lawsuit or the one from August publicly.