Nike Probe to Serve as Test Case for EEOC’s Efforts Against DEI

The outcome of the EEOC’s lawsuit seeking information about Nike Inc.’s use of race in employment decisions will be an early indicator of the agency’s ability to carry out its priority of probing corporate diversity programs for alleged bias.

The US Equal Employment Opportunity Commission’s subpoena enforcement action requests a Missouri federal judge order Nike to release a wealth of information in an investigation into discrimination against White workers launched from a commissioner charge filed by Chair Andrea Lucas.

The subpoena offers an unusual peek into the largely confidential EEOC investigation process. It also previews challenges that await the agency, as it pushes the Trump administration’s argument that diversity, equity, and inclusion programs can easily violate Title VII of the 1964 Civil Rights Act.

“The Nike case is a shot across the bow,” said Husch Blackwell LLP attorney Sam Mitchell. “Employers should brace for more aggressive investigations.”

Lucas’ Nike charge said the company may have engaged in a pattern or practice of disparate treatment against White employees, applicants, and training program participants through employment decisions, mentorship programs, and representation goals.

When the enforcement action was filed Feb. 4, Lucas said in a statement the EEOC will take all necessary steps to “ensure the opportunity to fully and comprehensively investigate” when there are “compelling indications” of discrimination.

A Nike spokesperson called the legal action “a surprising and unusual escalation.” The company argued in a subpoena response the EEOC request is overly broad and too burdensome, as well as largely time-barred.

In addition to layoff and employment data on the race of Nike workers, the EEOC sought executive pay data, and information about numerous diversity programs, including participant names, eligibility criteria, and reasons for termination.

The EEOC is seeking representation data Nike said in its “FY20 Impact Report” it would provide to vice presidents, as well as all training, guidance, and instructions provided to employees given access to that data.

Some of the information sought by the EEOC isn’t particularly unusual, such as criteria used for layoffs or facts about certain programs, said former Democratic EEOC Commissioner Chai Feldblum.

A request for information on tracking and maintaining race data between June 2019 and the present is more concerning, since tracking that data isn’t problematic and the EEOC’s request could send a warning message over something that is entirely legal, Feldblum said.

Nike will likely advance its argument the EEOC is seeking granular data across numerous programs that aren’t tethered to specific allegations in the commissioner charge, including some programs that have already been discontinued, Mitchell said.

Nike’s argument that information sought goes beyond the charge period may fail if the court deems it relevant to establish baseline comparisons, he added.

Making the Case

The EEOC’s subpoena enforcement request is the first public step in what could lead to a discrimination lawsuit.

The US District Court for the Eastern District of Missouri isn’t asking if the EEOC is right about the bias allegations, but rather if the information sought is relevant to the charge, Mitchell said.

The standard for relevance is quite broad, especially as the EEOC is alleging a systemic pattern or practice, he said.

The Nike spokesperson said the company already shared thousands of pages of information and is providing more.

There may be a paring down of information sought, or the parties could strike a deal, but the court will likely enforce the subpoena to some extent given the deferential standard typically used for executive agencies, according to Mitchell.

The EEOC’s success in part will come down to how rigorously Nike defends itself, said Maya Raghu, national director of the Protecting and Advancing Diversity, Equity, and Inclusion Initiative at the Lawyers’ Committee for Civil Rights Under Law.

“It’s hard to say how much of a stand Nike is going to take, given the environment we are in right now, where maybe in an earlier time they would be more likely to fight harder,” said Raghu, previously a policy adviser for Democratic EEOC Chair Charlotte Burrows.

Although courts are usually deferential to EEOC subpoenas, it’s uncertain how they’ll react on complaints that “reflect the ideological position of this administration” and raise bias issues that haven’t traditionally been of concern, Feldblum said.

Court Challenges

Most EEOC investigations begin with charges filed by workers. A smaller portion stem from commissioners themselves.

Not having an individual charging party makes the EEOC’s broader bias case more challenging, said Stacy Hawkins, a professor at Rutgers Law School.

A Missouri attorney general lawsuit over Starbucks’ DEI programs was recently dismissed after a federal judge said the state couldn’t point to a single resident who “lacked Starbucks’ preferred racial or sex characteristics’ and suffered an adverse employment action as a result.”

The EEOC also filed a subpoena enforcement action probing Northwestern Mutual’s diversity practices, however that case stemmed from a worker’s charge.

Lucas launched the Nike investigation months after the Stephen Miller-founded group America First Legal urged an agency investigation.

It’s unclear how many other commission DEI probes may be underway since the process is confidential. AFL sent numerous requests to the EEOC for similar investigations.

Part of the administration’s strategy is using subpoenas to “intimidate the private sector into voluntarily rolling back or eliminating these kinds of programs even if they are entirely legal,” Raghu said.

By highlighting the subpoena in a press release, the agency sent a message to companies either under investigation or ones that could become targets, she said.

The EEOC has issued several press releases lately on subpoena actions, including some unrelated to DEI probes.

Since many companies have long been running DEI programs within the bounds of the law, they shouldn’t be intimidated if the administration investigates, Hawkins said.

“Their strategy seems to be where there’s what we determine to be smoke, we’re going to find fire. And the smoke is anybody that’s touting diversity. They feel like if they go on a significant enough fishing expedition, they’re going to find fire somewhere,” Hawkins said.