IS NIKE’S CONTROVERSY OVER SPONSORING PREGNANT ATHLETES A VIOLATION OF EMPLOYMENT LAW?

Allyson Felix, six-time Olympic gold medalist

Photo Credit: Fleet Feet Sports

Less than two weeks ago, Nike-sponsored Olympian runners Alysia Montaño and Kara Goucher broke their nondisclosure agreements with Nike to make their stories about Nike sponsorship public. More specifically, these women opened up about discriminatory and unfair treatment by Nike during and immediately after their pregnancies. Since then, six-time Olympic gold medalist Allyson Felix opened up about a similar story, one working women know all too well – that Nike did not find her nearly as “valuable” after pregnancy and was unwilling to negotiate and unwavering in the expectations of her post-delivery. In an interview with the New York Times, Felix stated that she was negotiating her contract with Nike when she was faced with an emergency c-section at thirty-two weeks (a full eight-weeks early) due to preeclampsia, a condition that threatened the life of her unborn child as well as herself. During this time, she reported that Nike wanted to pay her seventy percent less than what she was paid prior to her pregnancy. Further, when Felix requested that Nike contractually guarantee that she would not face repercussions if she did not perform at her highest potential during her recovery from her emergency c-section, Nike declined to do so.

Many question this behavior by Nike, a company that was famous for their treatment of Serena Williams during and especially after her pregnancy. Nike not only supported and flaunted Williams’s pregnancy, but designed her infamous and recently controversial “catsuit,” which was designed to help prevent the chances of Williams developing life threatening blood clots – a condition she faced after the birth of her daughter. So is Nike supportive of women, especially those female athletes who choose the path of motherhood, or is Nike a cruel company that slashes the income of those who choose to become mothers and refuses to guarantee recovery time?

The answer is unclear at this time. Did Williams receive more support during and after her pregnancy due to her immense status in the sports world? Maybe. Regardless of how other sponsored athletes have been treated, soon after the news of Montaño, Goucher, and Felix’s mistreatment by Nike during and after their pregnancies broke, Nike quickly issued a public statement it will be revising its contracts. The company stated that “it is adding language to new contracts for female athletes that will protect their pay during pregnancy.” Legally, this is a solid move for the enormous, mostly well-renowned company.

When it comes to the law surrounding Nike’s contracts with its sponsored athletes, employment law would typically find the sponsored athletes to be “employees” of Nike. Under the right to control test used by the Ninth Circuit, including California, the sponsored  athletes might be able to prove they are employees and therefore able to sue on the grounds of employment discrimination and wrongful discharge. A wrongful discharge in violation of public policy would be based upon discriminatory treatment of pregnant employees, namely Title VII of the Civil Rights Act of 1964 and more specifically, the Pregnancy Discrimination Act, enacted in 1978. Note that a wrongful discharge claim would require actual termination of employment, where a claim directly under the Pregnancy Discrimination Act would not, as it protects many aspects of the employment relationship including promotions, benefits, assignments, and training.

Further, given Nike’s treatment of Williams’s pregnancy and profound message of support for female athletes and equality (see Nike’s “Dream Crazier” video, narrated by Serena Williams), sponsored athletes who believe Nike has been discriminatory in handling their pregnancies might also assert an implied in fact contract claim. Implied in fact contracts are established by non-verbal conduct, rather than explicit written or verbal words. Therefore, although the claimant must show an unambiguous offer, unambiguous acceptance, mutual intent to be bound, and consideration, the party may do so by providing circumstantial evidence, which typically may be provided by evidence of the employer’s behavior and intent behind such. Sponsored athletes such as Montaño, Goucher, and Felix could argue that Nike’s public support for female athletes and profound support of Serena Williams, a former sponsored athlete, during her pregnancy, were actions and behavior that formed an implied in fact contract.

Regardless of the claims that sponsored athletes such as Montaño, Goucher, and Felix may have available to them as potential employees of Nike, Nike executed written contracts with each of these individuals and the existence of such binding agreements would preclude a claim founded on implied in fact contract law. Moreover, since these athletes were never fired or terminated any wrongful discharge claim would be unsuccessful as well. Nike even included language in its contracts stating the company could reduce athlete pay “for any reason” if performance standards are not met, which its sponsored athletes signed. Nevertheless, grounds for a discrimination claim remain and the last thing Nike needs right now is a lawsuit based on discrimination claims brought by its sponsored athletes who dreamed to be both mothers and athletes.  

Soon after Montaño and Goucher’s stories broke, sportswear companies Burton, Altra, and Brooks, as well as Nuun, a vitamin company, announced new contractual guarantees for women who have children while being supported by their sponsorship. Nike quickly followed suit and confirmed that the company would be adding language to its sponsorship contracts to protect athlete pay during pregnancy. Given Nike’s specific “during pregnancy” language to be added to its contracts, the question remains as to what sponsored female athletes may expect when it comes to recovery and maternity leave. One of Felix’s main complaints surrounded Nike’s inability to accept her proposed terms regarding no punishment if her performance dropped in the immediate aftermath of her pregnancy. In Goucher’s case, Nike refused to pay her until she competed again, forcing her to choose between spending time in the hospital with her sick infant or beginning training immediately. Although Nike is taking a step in the right direction with the new contractual language, it leaves one to wonder how supportive the company will be following its sponsored athlete’s pregnancies, as they begin their journey into motherhood. When Nike endorses female athletes to “Dream Crazier,” is motherhood one of those dreams?

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