Nike settles racial-bias class action suit

CHICAGO--Nike Inc. has agreed to pay $7.6 million to settle a class action lawsuit charging the company with racial discrimination at its Niketown store in downtown Chicago.

Plaintiffs in the case were about 400 current and former African-American employees at the store. The suit, originally filed in December 2003, was granted class action status in March 2006 by a federal court judge in Chicago. The court gave its preliminary approval to the settlement Monday.

The plaintiffs charged Beaverton, Ore.-based Nike with segregating its black employees into its lowest-level and worst-paid jobs; denying them equal opportunities for promotions to more attractive positions; applying workplace rules and meting out discipline in a racially biased manner; and routinely denying minorities employee benefits by predominantly hiring them into part-time rather than full-time positions.

In addition to the settlement, Nike also agreed to several other measures, including a court-appointed diversity consultant to monitor and periodically report to the court and the appointment of a compliance officer at Nike's headquarters.

Nike said in a joint statement issued with plaintiffs counsel, Chicago-based Brennan & Monte Ltd. and Randall Schmidt of the Edwin F. Mandel Legal Aid Clinic of the University of Chicago, that it continues to deny all allegations of wrongdoing and liability in the litigation. A spokesman had no further comment.