Nike’s lawyers say it’s “highly likely” that a Multnomah County judge will dismiss a sweeping lawsuit against the company’s board of directors.
The lawsuit was filed in August in the wake of news reports about a toxic workplace at the sportswear giant. Plaintiffs allege the company’s directors didn’t do enough to protect investors from the damage caused by widespread sexual harassment and discrimination claims.
On Tuesday, Nike’s lawyers filed a motion to dismiss the lawsuit, variously describing it as “contorted,” “nonsensical” and “illogical.” In a related request to delay discovery, Nike’s lawyers said the motion to dismiss is “highly likely to succeed.”
In an email, plaintiffs’ attorney Gustavo Bruckner of New York’s Pomerantz LLP said, “The truth will come out and reveal a pattern of misconduct by top executives who got away with their ‘bad boy behavior’ for way too long. Plaintiffs look forward to presenting their case in court.”
In their motion to dismiss, Nike’s lawyers argue plaintiffs didn’t first take their concerns to Nike’s board of directors, as they are required to do under Oregon law. In their lawsuit, plaintiffs claim such a demand would have been futile because a “majority of the directors have participated in or approved the alleged wrongdoing.”
Regardless, Nike’s lawyers said the lawsuit also doesn’t describe a single instance when a Nike director learned about sexual harassment or discrimination and failed to act.
“This fact, alone, should end the matter,” they wrote in the motion to dismiss.
Instead, Nike’s lawyers claim plaintiffs make an “illogical” claim that Nike’s board should have realized the company had a problem when it was told that complaints to a human resources hotline had declined.
“Rather than acknowledging the obvious and most sensible inference drawn from these facts — that this information should have led the board to believe that Nike’s systems for preventing and remediating harassment or discrimination were working — plaintiffs implausibly claim the opposite: that a low and declining number of reports to the (hotline) somehow should have alerted the Nike board to allegedly unlawful sexual harassment and gender discrimination in its senior ranks.”
The 260 pages of documents filed by Nike’s lawyers include partly redacted minutes from Nike board meetings in 2015, 2016, 2017 and 2018 at which directors were told the hotline was working effectively.
Nike’s lawyers also introduced partly redacted minutes from a February 2016 board meeting at which CEO Mark Parker said directors would get an update on efforts to diversify management.
A hearing on the motion to dismiss is scheduled for March 22.
https://www.bizjournals.com/portland/news/2019/01/09/nike-says-motion-to-dismiss-sweeping-lawsuit.html