Three Nike shareholders filed a multi-million dollar lawsuit against the members of the company's board of directors for allegedly failing their fiduciary duties and sullying the company's reputation by allowing a culture of sexism and discrimination.
The suit, first reported by the Portland Business Journal, names Nike co-founder Phil Knight, 13 members of the company's board, and the company itself as defendants.
"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 says. "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."
The suit was filed by shareholders Alison Sherman, Lisa Udine and Shiva Y. Stein. Parts of the complaint have been redacted because they refer to documents that Nike released under an agreement that the plaintiffs would not publish them. A judge will decide whether to keep those sections of the complaint private.
The complaint stems from a revolt among women working for the company that ultimately ousted about a dozen executives, including then-Nike Brand President Trevor Edwards.
The shareholders object to Edwards earning $26 million between 2015 and 2018 as employees say they suffered in a toxic workplace, as well as his $9 million in unvested stock and the $525,000 payout he received when he left the company. They want that money—along with compensation for lost talent in women executives who fled 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," says Gustavo Bruckner, a lawyer for the plaintiffs. "Stockholders will no longer allow the brand to be harmed."
Nike did not immediately return a request for comment.