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Nike Pay Equity Studies Privileged, Off Limits in Sex Bias Suit

Oct. 13, 2020, 3:39 PM

A group of female employees suing Nike Inc. for alleged systemic sex discrimination in pay and promotions won’t get the chance to review internal pay equity studies the company compiled with the assistance of outside counsel, the District of Oregon ruled.

The documents are all shielded under the attorney-client privilege and litigation work-product doctrine, the court said.

Kelly Cahill and a proposed class of 500 or more female employees at the company’s Beaverton headquarters sought production of pay equity analyses that Nike first began compiling in 2016.

They allege in the August 2018 lawsuit that they were harmed by bias that included the use of salary history to set starting pay and other unlawful practices that marginalize the performance of women at Nike HQ and stunt their career growth.

Nike retained Seyfarth Shaw LLP and human resources experts for legal advice to develop statistical models to analyze its pay and promotion practices and to validate those models to identify factors that might explain differences in pay, the U.S. District Court for the District of Oregon said. The advice was sought to help Nike’s internal legal team remediate risk arising from or relating to pay or promotion discrepancies affecting protected-class workers, the court said.

The company also established that it implemented privilege protocols and guidelines for maintaining attorney-client privilege in developing and distributing the pay analyses and related correspondence, Magistrate Judge Jolie E. Russo said.

That Nike also had a business purpose for compiling the analyses didn’t waive the attorney-client privilege, the judge said. The documents were prepared for a primarily legal purpose, she said.

The company also demonstrated that the documents compiled by Seyfarth, as well as those created by Mercer, a consulting firm, and law firm Willis Towers Watson, fall under the work-product shield, the court said.

The pay studies were spurred by Nike’s receipt of Equal Employment Opportunity Commission charges alleging pay bias and internal complaints and litigation demand letters, the court said. Nike sought Seyfarth’s and the HR experts’ advice “to address potential legal liabilities for pay inequities,” Russo said, in denying the women’s motion to compel discovery.

The court rejected the women’s argument that any privilege was waived because Nike is using the pay analyses both as a shield, to insulate the documents from discovery, and as a sword, to thwart the women’s claims by offering the studies as a defense.

It isn’t clear yet what support the company will offer to back its affirmative defenses, Russo said in the Oct. 9 ruling.

The women were also wrong that Nike waived privilege by not serving privilege logs earlier in the litigation, Russo said. The “magnitude” of the discovery undertaken and exchanged by the parties to date justified any delay by Nike, she said.

Markowitz Herbold PC; Goldstein, Borgen, Dardarian & Ho; Ackermann & Tilajef PC; and India Lin Bodien of Tacoma, Wash., represent the women. Stoel Rives LLP and Paul Hastings LLP represent Nike.

The case is Cahill v. Nike, Inc., 2020 BL 392439, D. Or., 3:18-cv-01477, 10/9/20.

To contact the reporter on this story: Patrick Dorrian in Washington at pdorrian@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Steven Patrick at spatrick@bloomberglaw.com