Business Law Nike vs. Kasky - Essay Example

Nike is a multinational company engaged in the manufacturing of athletic shoes and sports apparel, which contracts Southeast Asian countries with cheap labor cost like Indonesia, Thailand, China, South Korea, Taiwan and Vietnam. Vietnam is the newest manufacturing facility of Vietnam. The complained stemmed from the report of one of Nike’s employees who alleged that Nike has poor working facility and violated local regulations by causing pollution which caused respiratory problems to majority of its workers.

An investigator for Vietnam Labor confirmed that he found truth in these allegations of widespread abuses by Nike. Nike, in its defense commissioned former UN Ambassador Andrew Young to make an independent report and visit the factories alleged to be unsafe. Young issued statements in the media and wrote letters to newspapers by stating that the allegations against Nike were baseless, unfounded and untruthful. The press releases and statements conveyed that Nike was acting morally by providing humane conditions to its workers. . The California Superior Court ruled in favor of Nike and dismissed the complaint for insufficiency of evidence.

Hence, Kasky filed an appeal with the California Court of Appeal, which affirmed the ruling of the CA Superior Court by stating that the statements of Nike falls within the scope of the “core area of expression which is protected by the First Amendment” (Goldstein, 66). The Supreme Court reversed the ruling of the California CA, by a vote of four to three and ordered that the case be remanded back to the lower court for further proceedings. The SC ruled that Nike’s statements constituted a “commercial speech” and complied with “the three elements to categorize the speech as commercial based on the following grounds: speaker, intended audience and content of message” (Goldstein, 67): 1.

Nike is a commercial speaker because it is a manufacturer to athletic shoes and sports apparel all over the world; 2. “The statements are made to a commercial audience, who are actual or prospective buyers and the press releases were intended to reach and influence actual and potential purchasers of Nike’s products” (Goldstein, 67) ; and 3. The content of Nike’s message served as factual representations about its business operations in explaining the working conditions inside the factories and the labor practices/policies being implemented by the company.

CA Supreme Court denied Nike’s petition for rehearing while the US Supreme Court granted the petition for certiorari. The Court ruled to dismiss the case. c) FOR KASKY:  Nike committed false representations to the public by issuing misleading statements that its business was conducted morally and maintained a safe and secured