Issues and Ethics Simulation 3: Mock News Conference

Ben Borosch|Lovepreet Singh|Rani Bhullar|Daniel Sobers

ETHS2000

Diana Degan

December 5, 2019

Disclaimer: This report was prepared as an academic component of the Public

Relations Issues and Ethics course. The organization used is real but the

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issue content of this report is fictional and should not reflect on the
organization

Memo
To: Benjamin Borosch
From: Nike Public Relations Team
Date: December 4, 2019
Re: New Conference

Good Morning Benjamin,

In our last memo, our team identified the primary activist and protest groups that
have the potential to affect our brand’s reputation. Using the pregnancy policy as our
main issue, our team determined that the Feminist Majority Organization should be
categorized as lead activist group to keep an eye on.

Our team, including yourself, are ready to address the media. By holding a press
conference about our current situation, we will be able to get the perspectives on the
issue and others heard. Along with yourself, our team will be by your side during this
press conference:

1. Benjamin Borosch: Chief Executive Officer

2. Daniel Sobers: Director of Sponsorships
3. Rani Bhullar: Senior Public Relations Coordinator
4. Lovepreet Singh: Chief Communication Officer

Each team member has prepared a statement that they will give to the media during
this press conference. After this portion is completed, the media will have the
opportunity to ask questions.

The main message that our company wants to give to the media is that we
personally want to make it clear that we support women and no longer will the
pregnancy penalty affect our female athletes.

With that being said, the press conference is at 5:25 on December 5, 2019. Our
team looks forward to meeting with you before, to discuss the press conference and
potential questions that will be asked.

Thank you,

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Nike’s Public Relations Team
The Issue:
Nike has not had a stellar year…or two. Between the “broken shoegate”, pregnancy
discrimination claims from female-sponsored athletes and past internal turmoil and
claims of being “an old boys’ club”, the company has been rocked to the very soles
of its athletic shoes.
And now, the company who always saw itself as enlightened when it came to social
issues is being questioned again. As the women athletes who were sponsored, but
released due to the pregnancy clause in their contracts, started being hired by other
companies like Athleta, they found outlets for their anger: the media.
To compound things, it’s come to light that all the sponsorships at Nike have always
been negotiated by men. Worse yet, the internal atmosphere at Nike headquarters
has boiled over; the female employees have had enough of the old boys’ club and
their inappropriate comments, aggressive behavior, misogynistic workplace
standards and the overtly sexist culture. The question everyone is asking is: just how
deep does the “frat boy” culture go?
Sports Illustrated has run a feature on the women athletes. Social media is buzzing
with rumours and stories. Sports and lifestyle media are calling, asking questions
and wanting interviews with the female staff.
Research and Analyze the Issue:
On October 14, 2019, Madison Keys came forward about having her sponsorship
income cut because of her recent pregnancy. Nike has sponsored their fair share of
prominent female athletes over the years. But recently, several high ranked track
and field athletes have broken their silence to share pregnancy policies. The details
in which these athletes shared were surrounding the ramifications of having a child
while a Nike athlete. Allyson Felix, Kara Goucher, Aysia Montano have spoken to
media sources about having their pay cut from Nike after confirming pregnancies.
Currently, Keys is in the beginning phases of growing this issue to the national level,
but there has been no reports or articles on this issue from any of the media
platforms.

Assigned Roles Within our Team:

1. Ben: Chief Executive Officer
2. Dan: Director of Sponsorships
3. Rani: Senior Public Relations Coordinator
4. Lovepreet: Chief Communication Officer

Key Message:
Our company personally wants to make it clear that we support women as they
decide how to be both great mothers and great athletes. As a company, we
recognize that we can do more and that there is an important opportunity for the
sports industry to evolve and support female athletes

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 Our Team’s Media Statements
Benjamin Borosch - Chief Executive Officer:

Hello and thank you to everyone for coming on such short notice. Due to recent
events, one policy within our standardized Female athlete contract has been making
headlines. The contract stated that, “If an athlete were to make the decision on
having a child, that athletes contract would be frozen without compensation”. And
now, After hearing about the several female athletes that came forward with their
anger and frustration, our organization is determined to make a change.

Yes. In the beginning stages of our athlete sponsorship program, our company
added industry standard policies were put in place so that our brand could portray an
image of athletic excellence. But now that’s not the case. Our company takes full
responsibility for missing this policy error over the course of this contract being in
place. Especially during this time of female empowerment and equality.

I personally want to make it clear that we support women as they decide how to be
both great mothers and great athletes. We respect that they must prioritize their
families over their profession..

As a father of twin baby girls, I support female empowerment during this critical time.
The compensation cut is a choice that has no relevance in today’s society in which is
misogynistic or discriminatory towards the female gender. With that being said; From
this day forward, effective immediately, the pregnancy policy will no longer in the
contract.

Our company wholeheartedly believes in our female athletes. It's now time to change
the industry and show them that we truly believe in them.

Thank you.. Now i want to pass it over to Daniel Sobers, Head of sponsorship.

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Daniel Sobers - Director of Sponsorships:

As the Director of Sponsorships at Nike, I wanted to acknowledge that the female

pregnancy penalty that these athletes were required to cope with was a huge
mistake on my behalf, and I want to take full responsibility for any discouragement I
may have initiated towards these valued sponsors. It was a poor judgement call on
my behalf because I didn’t visualize for a second that my choice to follow through
with this penalty would have resulted in Nike obtaining the reputation as “a
misogynistic frat-boy cultured company with discriminatory tendencies.” The real
logic behind this choice rooted from pure sensitivity to the fact that women have
reproductive abilities that men do not have, and for this very reason, we didn’t expect
pregnant women under any circumstances to train to their fullest potential because
we didn’t want them to put their future child at risk of any injuries. At the same time,
athletes are required to train to their fullest potential to portray our motivational
image we are well known for. I’ve now concluded that it is a woman’s choice to train
to her fullest potential when she is pregnant, and I shouldn’t be concerned about her
own personal lifestyle habits because it is none of my business. I have also
abolished the pregnancy penalty because pregnant women are very capable of
accomplishing tasks that a woman who is not pregnant can do on a daily basis. I
wish all of our sponsor athletes the very best as well as the former ones who have
departed from the company to pursue an occupation that makes them happy. I
apologize for any misunderstandings I may have caused.

Thank you, now Rani Bhullar, Senior Public Relations coordinator

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Rani Bhullar - Senior Public Relations Coordinator:

Hello everybody, myself Rani Kaur Bhullar and I am the senior Public Relations
Coordinator at Nike. First of all I would like to apologize for all that is happening with
female athletes and employees in Nike firms. Currently we are working on all of our
policies related to female employees and female sponsored athletes to make them
better. I want to clear this issue today that we are in support of female athletes and
employees in all the ways. We are not in favour of any kind of gender discrimination.
Our new policies will be based on equal opportunities for all genders. The voice of
everybody matters for us and it makes our brand brave. We will soon release the
report covering the new rules and regulations. In these policies we will focus on the
pregnancy penalty problems and we are going to end all the financial penalties for
women working for Nike.

Thank you, Loverpreet Singh, Chief Communications Officer

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Lovepreet: Chief Communication Officer

Good evening everyone. My name is Lovepreet Dhillon. I am the Chief

communication officer Of Nike. Today, we have invited you guys to give you some
vital information about the recent issue. Thank you all for coming and to be a part of
this conference.

We have talked to our sponsored female athletes and considered their suggestions.
Nike supported many female athletes for years. We are learning and growing in how
to do our best to support our female athletes. We have always worked to do our best
to supporting and celebrating our female athletes and we are committed to do so in
the future.

Last year we standardized our approach across all sports to support our female
athletes during pregnancy. Firstly, we made that mandatory of the pregnancy test.
We just wanted them to be safe and healthy during pregnancy. However, now we
have changed our plans. We want to make it clear today that we support women as
they decide how to be both great mothers and great athletes.

Thank you again to all of you for your time. We will keep updating you guys for all
fresh information.

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 Potential Questions

Benjamin Borosch: Question & Answer

1. There has been accusation in which the corporate culture of Nike Inc. is
a more of an old boys club and fraternity, rather than a place of
equality?
a. Since the conception of Nike at the University of Oregon Track and
field department, Nike has always strived for cohesive culture that
promotes community rather than corporate. Our company culture is a
reason why Nike is successful today. Over the course of Nike’s history,
there has been an importance put on equality within nike’s corporate
culture. We don’t employ individuals based on gender, we hire based
on shared common goals and values.
2. As an industry leader, you set the precedent for everyone else. Why was
the Pregnancy policy created in the first place?
a. The pregnancy policy was industry standard, legal prerequisite that
was unnoticed at the time. For its time, the pregnancy policy was
uncommon to see in athletes contracts. And it is still common today.
Females have their pay reduced when they are no longer able to work,
due to pregnancy. But in today's society, the pregnancy policy has no
place within our sponsorship contracts. The massive amount of
criticism that our company would potentially get outweighs any other
possibility.
3. This pregnancy penalty issue has had major discrimation effects on
your female sponsored athletes. How will Nike regain the trust of their
sponsored athletes?
a. The first step is that we want to make it clear and reassure our
athletes that we support them as they decide how to be great mothers
and great athletes during their time and career with our brand.
b. Along with the policy change, we want to bring female advocacy to the
forefront of our brand. I personally will be creating an internal female
brand committee would be a third initiative. A hand selected group,
whose values are in the interest of our female audience. This
committee would be a combination of staff and sponsored athletes that
strives to bring female advocacy to the forefront of our brand.
c. Lastly, going forward in the future, our brand will be committing to
establishing presences in the maturity market. Products and
campaigns focusing around motherhood.
4. You claim to be an industry leading community, but are still
participating in policies that have been in the industry for decades. Why
wasn’t pregnancy clauses added to Nike’s contracts?

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 a. Because female athletics were completely different when our company
creating the standardized contract we use today. There was a common
agressance among athletes that kids came after the career. Just
recently, we have seen athletes do amazing things while pregnant.
This was unprecedented in the industry and our brand wasn’t prepared
for this change.

Daniel Sobers : Question & Answer

1. “How can Nike as a company go from establishing such a strong

choice to put the pregnancy penalty in place to eliminate it all together? In
other words, are you sorry that these female athletes were inconvenienced,
or are you sorry that you were exposed in the media?”

The truth is that sometimes when a company is required to make decisions that
are in the best interest of the company’s success, that is our primary target focus,
and we often times neglect how our choices could make the public's feelings. It is
true that the pregnancy penalty was set in place and it is true that the pregnancy
penalty has now been eliminated. This was a quick decision that was established
because it seemed logical at the moment, but the public has opened our eyes to
show us the repercussions of what can really happen when we don’t prioritize
both the company’s interest, the sponsor’s interest and the public’s interest
simultaneously. Through social media, we’ve learned a perspective about the
pregnancy penalty that we were completely oblivious to, but it makes logical
sense how people can correlate our choice to put this in place with discriminatory
roots. It has been eliminated because we are genuinely sorry for the hurt feelings
and misinterpretations we have caused.

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 2. “Nike has failed on numerous occasions to accurately resemble the
company as one that values both genders, and the fact that all
sponsorships have been negotiated by men is proof. Will the time ever
come when a woman finalizes a new sponsor?”

We take pride in the fact that Nike has earned global recognition since 1975, and
it is certainly a coincidence that men have only finalized our sponsorships. In our
corporate office, Nike is comprised of a diverse selection of individuals who are both
male and female, and share different roles, values and beliefs within the company.
Our goal at the end of the day is to select individuals who are the most qualified
when working in the sponsorship department, and it has nothing to do with their
gender. It is highly likely that a female in the sponsorships department will finalize
the decision of a new sponsor, because we are constantly seeking individuals who
have good connections, exceptional communication abilities, good written abilities,
and are most importantly qualified. These requirements are not exclusive to the male
gender under any circumstances.

3. “Now what will happen when a pregnant woman decides to train at full
capacity and suffers a miscarriage that will go viral on social media? Will
Nike then go back to their old pregnancy penalty because the media will
shift them in that direction?”

We’ve previously stated that a pregnant woman can accomplish things that a
woman who is not pregnant can accomplish as well. A woman’s reproductive
abilities will never limit her human potential. The pregnancy penalty needed to be
eliminated because we as a company indirectly assumed that all women
shouldn’t train at their fullest capacity when they are pregnant. If a woman
chooses to train at her fullest capacity when she is pregnant, that is her choice. If
she needs to settle down or train less, we are more than happy to accommodate.
Nike as a company looks out for the best interest of all publics, and not just the
company itself. We genuinely hope that a female sponsor won’t ever miscarry
because of her employment at Nike. However, we are not held liable for the
personal lifestyle habits and choices our athletes make outside of their work.

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Rani Bhullar : Question & Answers
1. Is it clearly mentioned in the contracts that female athletes have to
suffer from pay deduction during pregnancy when they are hired for
brand sponsorship?
We accept that female athletes have to face some problems for wanting a
child during their contracts with Nike, because sponsors refuse to pay them
while they remain away from their working contracts due to pregnancy and
recovery.In essence, their contracts don't include paid maternity leave and it is
mentioned in the contract term also.
2. What changes Nike is making in its policies to make the working
environment safe for women?
First of all we are encouraging the women to raise their voice if anything
discriminatory is happening with them. We are introducing the comment
boxes in all of our factories so that women can drop their complaints in that.
Secondly, we are going to end all the financial penalties for women working
for Nike. We are focusing on more clear terms and going to make our policies
more straight forward so that there should not occur any misunderstanding
later in contract terms.
3. How much pay is deducted from the regular paid amount when the
female sponsored athletes become pregnant during their contract with
Nike?
As the early policy of Nike, the pay of an athlete or female employee is
deducted for 12 months due to pregnancy, but according to the new policies
we are going to end all the financial penalties for women working for Nike.
4. How often female athletes has to suffer from payment deduction due to
pregnancy?
Female employees have to suffer for near about 12 months from the
pregnancy penalty. In this time delivery and recovery is included. All these
things are clearly mentioned in the contract.
5. Is the male athletes also have to suffer from the pay deduction after
becoming a father?
Our brand does not believe in any kind of gender discrimanation. We know
that the internal environment is boiling on discrimination issue. We apologize
for all the misunderstanding and are doing our best to settle the things.

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Lovepreet Singh : Question & Answers

Q 1. How are you going to handle media?

We will handle the media by being honest with them and fully open about the
issue. We will not hide anything. We want to let people know that we have
supported female athletes and we are committed to do the same in future.

Q 2. What changes you have made in the contract of female athletes?

We are updating our contracts to protect female athletes pay during
pregnancy. Last year we standardized our approach across all sports to
protect our female athletes. But now we recognize we can go even further to
reinforce our policy.

Q 3. Is it legal for a company to stop paying a woman because she is

pregnant?
Our female sponsors were provided with legal documentation so they are well
aware of their rights and maternity benefits during the time of their pregnancy,
and afterwards when they are on their maternity leave. They were required to
sign the document at the bottom of the page to ensure that they have read
everything, and are aware of both their own benefits and the company’s
benefits. It is perfectly legal to cut a pregnant woman’s pay the same way it is
to cut the pay of a woman who isn’t pregnant. It is legal, especially in this case
because runners are independent contractors; they are not employees of the
company.

References

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CBC news by Sophie Lewis (May, 2019) Nike to change its pregnancy policy in future
athlete contracts amid backlash. Retrieved on December 4,2019 from
https://www.cbsnews.com/news/following-backlash-nike-will-change-its-pregnancy-policy-
in-future-athlete-contracts/

hugh_son. (2019, May 20). Nike says it is changing contracts to protect star athletes' pay
during pregnancy. Retrieved December 4, 2019, from
https://www.cnbc.com/2019/05/19/nike-says-it-is-changing-contracts-to-support-athletes-in-
pregnancy.html.

Nike Honors LeBron James with Naming of New Advanced Innovation Building. (2019,
September 5). Retrieved December 4, 2019, from https://news.nike.com/news/nike-lebron-
james-building.

Nike's Mission Statement and find information about NIKE, Inc. innovation, sustainability,
community impact and more. (2019, February 22). Retrieved December 4, 2019, from
https://about.nike.com/.

Sarah Lorge Butler (Jun 2019). A pro runner is pregnant. Will she still be paid? Retrieved on
December 4, 2019 from
https://www.runnersworld.com/news/a27750194/pregnancy-pro-runners-contracts/

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