- Nike has long positioned itself as a “woke” apparel company, a champion of progressive values that backed social-justice heroes like Colin Kaepernick. But the company’s history exposes a darker reality, masked by a multi-billion-dollar marketing apparatus.
- By the time Michael Jordan’s first Nike commercial aired in 1985, the company’s annual revenues had climbed to nearly $950 million. Five years later, it had hit $2.2 billion in sales each year. By 1993 that figure had climbed to nearly $4 billion.
- To spur a new generation of long-distance running in the U.S., Nike hired marathon champion Alberto Salazar to run the so-called Oregon Project. But the program would become mired by allegations of abuse and doping.
- More recently, Nike has come under fire after allegations of sexual harassment at the company surfaced, along with harsh criticism of its labor practices.
- Visit Business Insider’s homepage for more stories.
On September 6, 2018, Nike CEO Mark Parker threw a party at his company’s sprawling 400-acre world headquarters in Beaverton, Oregon. It was “Just Do It” day, when work grinds to a halt at the campus so that hundreds of employees can gather to eat, drink, and mingle with celebrity athletes. The unofficial company-wide holiday was held on a lush, well-manicured field beneath the afternoon sun, with staff from every rung of the corporate ladder rubbing elbows with Parker and Phil Knight, who had stepped down as CEO in 2004 and ceased duties as chairman of the board in 2016.
Parker, who became Nike’s third CEO in 2006, arrived at the party wearing black slacks, a black dress shirt, and a black jacket – a departure from his usual attire and an odd choice for a day when temperatures approached 90. Some guessed it was the CEO’s attempt to align himself with Nike’s guest of honor, Colin Kaepernick, who showed up in black shorts, a black shirt, and black Nike shoes.
In 2016, Kaepernick became a civil-rights icon by kneeling in protest of social injustice during the playing of the national anthem. His actions infuriated the top brass at the NFL — which has an apparel deal with Nike estimated to be worth over a billion dollars — and got him and sidelined him from playing ever since the 2016 season. In Kaepernick’s stand, Parker spied opportunity: He made him the new face of Nike’s “Just Do It” campaign, originally conceived by Dan Wieden in 1988 as a paean to what he saw as the company’s “willingness to f— something up.”
The Kaepernick ad, which featured his image with the words “Believe in something, even if it means sacrificing everything,” placed him alongside former Nike-sponsored icons, such as distance-running legend Steve Prefontaine, soccer star Ronaldinho, Roger Federer, and Michael Jordan, who is credited with rescuing Nike from irrelevance at the tail end of America’s jogging boom.
“What Phil and Nike have done is turn me into a dream,” Jordan said.
Kaepernick would join their ranks, albeit through a campaign that accentuated not his athletic feats but his social-justice heroism.
Nike’s Kaepernick ad roiled conservatives. President Donald Trump said it sent “a terrible message,” while the editorial board of The Wall Street Journal declared it a “patriotic fumble.” The day after Kaepernick teased the ad on his Twitter account, Nike’s share price slipped more than 3%. But Parker’s gamble would pay off: The ad won an Emmy and Nike raked in a record $36.4 billion in 2018. The company had made loads of money even as it earned praise for placing principles over profit. The conservative blowback came as no surprise to Parker, who told Nike’s board of directors to expect some short-term backlash.
What he didn’t anticipate was that some of Nike’s own former athletes, who were paid to represent the brand, would take a principled stand against the company that had sponsored them, claiming they’d suffered abuse at the hands of Nike coaches, whose behavior was enabled or ignored by high-level employees at the company. Later, some of these same athletes would also take a stand against the company over allegations of gender-based discrimination and sexual harassment among its corporate ranks.
The most significant of these athletes was Mary Cain. The prodigy first discovered her love of running in elementary school, when she astounded her classmates and teachers with her raw speed. By her freshman year at Bronxville High School in Westchester County, she won a state cross-country title. In the summer of 2012, she ran the 1,500 meter at the Junior World Championships in 4:11, a record for American high-school girls.
But the life of a prodigy can be isolating, and her astounding success did not endear her to her competitors or their “helicopter parents,” Cain, who declined to comment for this story, said on the Clean Sport Collective podcast. “I was kind of bullied on my high-school team,” she added.
In fall 2012, the family discussed whether she should put her running career on hold until college. The family, Cain’s father said, was desperate for “divine intervention.”
When it arrived that October, it came in the form of an offer from legendary running coach Alberto Salazar, who managed an elite program called the Nike Oregon Project. Mary’s performance at the Junior World Championships had blown him away, and he began coaching her from afar. Like Cain, he too had been a high-school running prodigy and dominated the sport at the University of Oregon in the late 1970s.
The Cain family was elated. The miracle they’d been waiting on arrived just in time to spare their daughter the indignity of training with a local club until college.
“To say it was a savior swooping in would be an understatement,” Cain said in an interview. “I got to join the greatest club in the world.”
In the beginning, Nike was a shoe company, conceived by Phil Knight in 1962. He once said his vision was to specialize in quality athletic shoes that “could be made in Japan and … profitably imported for sale in the United States.” That plan would take him to Japan, whose ruined postwar economy made it a mecca for cheap manufacturing for Blue Ribbon Sports, the upstart shoe distributor he founded in 1964. As the company flourished and gave birth to the Nike brand, Knight stuck with the model. Rather than paying his workers better wages as profits soared, he sought out cheaper workers in more economically despondent places.
Even as Nike sprinted toward becoming a billion-dollar brand, it continued to seek ever-cheaper manufacturing opportunities, in poor nations with weak labor laws, to maximize already stunning profits. By 1982, the company imported 70% of its shoes from South Korea, then a military dictatorship; 16% from Taiwan; and 7 % from Thailand, Hong Kong, and the Philippines. (Nike eventually offshored the 7% of its production done in New England.)
Through the 1980s and ’90s, underage workers toiled in its plants in Indonesia. At factories in China, workers claimed they were coerced into putting in excessive overtime to meet Nike’s demanding production schedule. And in 1997, 23-year-old Nguyen Thi Thu Phuong, a worker in Nike’s factory in Bien Hoa, Vietnam, died after a sewing machine broke down and sprayed her body with metal parts.
Nike claimed it bore no responsibility. The shoe company, which was by then one of the world’s largest manufacturers, was no longer in the manufacturing business, according to Nike. It was in the marketing business.
“We don’t make shoes,” the company said in a statement.
The goal, as Nike grew, became to spend as little as possible on manufacturing so that more money could be pumped into the company’s advertising and marketing operations. By 1982, Nike’s annual advertising budget had climbed to $20 million; eight years later, it had soared to more than $150 million.
It proved to be a winning formula. By the time Jordan’s first Nike commercial aired in 1985, the company’s annual revenues had climbed to nearly $950 million. Five years later, it had hit $2.2 billion in sales each year. By 1993 that figure had climbed to nearly $4 billion. At the height of the Jordan era, when one out of every three pairs of shoes sold in the US were Nikes, profits grew nearly 1,000%.
In an interview, Rick Bakas, a former apparel designer at Nike, described what he saw as Knight’s obsession with Nike’s image and his steadfast belief in the power of marketing to displace reality — being No. 1 and seeming virtuous mattered more than being No. 2 and being virtuous.
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Bakas worked on Nike’s apparel team in the late ’90s, when stories about sweatshops it was using emerged. The company handled the stories about its use of sweatshops “as a PR problem,” he told me. “Nike’s public-relations team had two jobs when it came to the sweatshop labor scandal: One was to create a response that would work on the media, and the other was to create a response that would work on Nike employees.”
According to Bakas, executives told their American employees, particularly those working on apparel manufactured in overseas sweatshops, to regard workers in those factories as fortunate to have a job with Nike. The company wasn’t exploiting them — it was boosting the economy in their struggling nation.
“It’s a culture of arrogance, and ultimately it is very cult-like,” Bakas said. “Just like with Apple and Steve Jobs, you end up with Phil Knight as this cult leader who people want to associate with, even though he’s a prick, because he had this amazing idea that spawned an amazing company and brand.” Whenever labor groups, human-rights organizations, or governments called on Nike to reform its labor practices, the company resisted, treating these as image problems rather than supply-chain problems. (A spokesperson for the company told Business Insider that “Nike remains dedicated to ethical and responsible manufacturing and we are deeply committed to ensuring the people who make our product are respected and valued.”)
After years of scrutiny from the press, Nike appointed a corporate- and social-responsibility manager, who in May 2001 claimed that the company was “just a bunch of shoe geeks who expanded so much without thinking of being socially responsible that we went from being a very big sexy brand name to suddenly becoming the poster boy for everything bad in manufacturing.”
In April 2001, Nike CEO Phil Knight and his vice president, Tom Clarke, called distance-running legend Alberto Salazar. Knight and Clarke, both former distance runners, believed Salazar, who had coached Nike athletes and worked as a sports-marketing consultant for the company, could restore glory to American running. The three developed a vision: a training program funded by Nike, built around experimental training techniques and cutting-edge performance-tracking technology — led by Salazar, if he wanted the job. He accepted without reservation.
As a young man, Salazar had broken the American indoor 5,000-meter record, and between 1980 and 1982 dominated the New York City Marathon with three consecutive victories. His narrow win over Dick Beardsley in the 1982 Boston Marathon, known as “the duel in the sun,” has been called the most thrilling finish in the history of the event. But an asthma diagnosis would slow Salazar, leading him to try experimental, often unproven training techniques. Nothing worked. He came in 15th in the marathon at the 1984 Olympics, his last significant result.
By the time Knight and Clarke recruited Salazar to run their program, dubbed the Oregon Project, his passion for sports science had only deepened. And with Nike’s considerable resources, Salazar’s methods grew increasingly experimental. It seemed that no idea was too wild, no approach too unconventional. The goal was simple: Give Salazar everything he needed to find an athlete who could do for running what Lance Armstrong had done for cycling, which went from niche to mainstream in the US after the Texan began dominating the Tour de France in 1999.
The project began almost like a reality-TV show. Salazar recruited a handful of elite runners and housed them in a special five-bedroom house in northwest Portland, where hermetically sealed rooms and a special filtration system simulated the experience of living at a high altitude. Salazar and his team used advanced software to spot inefficiencies in their form, a controversial Russian algorithm to determine the intensity of their training regimen, and an enormous piece of workout equipment called Nemes, which supposedly stimulated electrical activity between the brain and certain targeted muscles, thereby boosting muscle power.
Adam Goucher, who joined the Oregon Project with his wife, Kara, in 2004, said Salazar’s philosophy was to “spare no expense to get his hands on the latest, newest thing that could help Oregon Project runners go faster.” The coach carried “some kind of laser” around with him, Goucher recalled, and said it supposedly sped up the healing process.
Goucher remembered thinking: Who else but Nike could spend that kind of money on unproven equipment that might only provide benefits on par with the placebo effect?
The scientific basis for some of Salazar’s innovations, including the house, appeared sound. But his approach could be improvisational and impulsive. Once, an Oregon Project runner, mystified by his sluggish condition, discovered that the oxygen level in the team house’s recreation room had been set to simulate an altitude much higher than usual — a staggering 14,000 feet.
One morning in 2003, a pair of 17-year-old runners, Stuart Eagon and Galen Rupp, stood outside their hotel room in Raleigh, North Carolina, preparing for the national 2-mile high-school championships. Salazar was advising both students, who trained with him in their off-seasons.
When Salazar showed up for a morning run, he asked Rupp, “Have you taken your prednisone yet this morning?”
Rupp stopped warming up and returned to the hotel room, presumably to take the drug. He returned 10 minutes later without saying a word about it, Eagon told me.
The episode struck Eagon. His grandmother had taken prednisone, so he knew its purpose: to block pain and enhance oxygen consumption. The idea of a healthy 17-year-old taking the drug — a banned performance-enhancing substance under rules laid out by the World Anti-Doping Authority — surprised him.
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Salazar, a family friend of the Eagons, had first taken an interest in their son two years earlier at the cross-country regional junior Olympic meet, where the 15-year-old had competed in the 2-mile race. If he wanted to improve, Salazar told his father, he needed to bulk up. Indeed, after committing himself to weight training, Eagon became a regional contender in his age group. “Alberto was always very perceptive in that way,” Eagon said.
While Eagon benefited from training with Salazar, it was Rupp who became the Oregon Project’s prized recruit. In Rupp, Salazar saw his chance to correct earlier mistakes: Rather than rushing him into the program, he allowed him first to develop in high school and college before turning professional with the Nike Oregon Project in 2009. According to Eagon, part of Rupp’s development seemed to involve taking prednisone, a banned substance.
Eagon tried to forget the episode in North Carolina, but it haunted him. He’d never been offered performance-enhancing drugs, but had suffered from depression because of overtraining. He couldn’t imagine how much worse it might be for runners taking illicit substances. Yet for a long time it was easier to pretend the incident never happened than it was to confront Rupp.
In 2005, Eagon’s conscience finally overwhelmed him. Rupp had by then broken the junior US 3,000-meter and 10,000-meter records, and was primed to be “America’s next big runner,” according to Salazar. But Eagon worried about the cost he might be paying to achieve that.
While the two were at a race in France that year, he asked him point-blank: Was he still taking prednisone? At that point Rupp denied ever taking it, “which made it seem as though he had been told not to ever share that,” Eagon said. The two soon grew apart. “It felt like our friendship disappeared, and not only was it strange, it was really sad.” A representative for Rupp did not respond to requests for comment, while Nike said that it “does not condone the use of banned substances in any manner.”
Eagon wasn’t the only one who found Rupp’s performances suspicious. Adam Goucher had run against Rupp often enough to have a sense of both his raw talent and his limitations.
“Alberto thought Galen Rupp was this messiah of distance running and was so obsessed with his form that he couldn’t see the reality which was that he wasn’t that talented,” Goucher said. “And after not winning at all he suddenly starts winning all these races, which to me suggests that Alberto decided doping was the answer to the problems that were going to arise if he didn’t get Galen performing like he’d promised.”
As Rupp’s friendship with Eagon crumbled, his bond with Salazar deepened, so much so that when Salazar suffered a serious heart attack in June 2007, he had just one request after waking up in the hospital with Phil Knight at his side: “Take care of Galen,” he said, without mentioning a word about his two sons or his daughter, according to his autobiography.
During Salazar’s recovery, his doctors prescribed a course of statins, which help reduce cholesterol levels. But the statins also lowered his testosterone levels, a common side effect. He received testosterone-replacement therapy, even though it can be dangerous for people with heart conditions. Eventually, his testosterone levels normalized. Yet he continued filling prescriptions for his testosterone cream.
Some former Oregon Project employees believed that a portion of that testosterone went to some of Salazar’s athletes. Overtraining can lower the body’s levels of the hormone, which helps build muscle mass and aid in recovery. Since Salazar’s regimen inevitably led to overtraining, testosterone therapy might have effectively allowed his athletes to push past their limits without suffering the drawbacks.
When Salazar needed supplements or medications for his athletes, he turned to Jeffrey Stuart Brown, a board-certified endocrinologist in Houston. It was simple: Oregon Project athletes who needed a boost were flown to Texas for IV drops, experimental supplements, or medications used to treat thyroid disorders, which Salazar believed would give runners an edge, according to the United States Anti-Doping Agency’s (USADA) decision on the Salazar case.
If that was the case, it worked beautifully. In 2012, after three years competing professionally for Nike’s Oregon Project, Rupp won a silver medal in the men’s 10,000 at the London Olympics, the sort of major American victory Clarke craved. Gold, meanwhile, went to his new Oregon Project teammate Mo Farah, who was lured from Adidas in 2011 by the prospect of working with Salazar. Brown did not respond to requests for comment sent to his personal email address, while Nike responded that there was “no finding that performance enhancing drugs have ever been used on Oregon Project athletes.”
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Farah also won gold in the 5,000 at the London Olympics, which was a tremendous marketing coup for Nike: In Rupp it had a homegrown track superstar, and in Farah it had the kind of athlete whose excellence seemed to transcend the boundaries of his niche sport. His two gold medals gave Nike the tools to sidestep Olympic sponsorship rules, which dictated that only Adidas could mention the games in shoe and apparel advertisements since it had paid tens of millions of dollars for the exclusive rights. In the wake of Farah’s win, Nike plastered London streets with ads showing a pair of muscular legs with the words “Twice the Guts, Double the Glory.” (Nike did not respond to questions regarding this incident.)
Soon after Farah’s triumph, he and his coach received a call from a pair of investigative journalists at the BBC, working in partnership with ProPublica. Danny Mackey, a former scientist at Nike, had tipped them off to the Oregon Project and Salazar’s experimental methods. In late 2014, the BBC sent a film crew to Portland to interview several former Oregon Project employees.
Among those they sought to interview was Stuart Eagon, who by then had left distance running behind to become a documentary filmmaker. For days before the interview, he agonized over whether to go on the record about the prednisone incident with Galen Rupp. In the end, he felt he had to tell the truth. “I just felt that someone coming into this program so young should have all the information necessary to know what they were getting into,” he said.
For the rest of her high-school career, Cain trained under Salazar from afar, breaking one record after another. After graduating in 2014, she became the youngest member of the Oregon Project. Several days each week, Mary trained at Nike’s track in Portland, amid hundreds of acres of pine trees and gleaming office buildings.
The Oregon Project became a surrogate family for Cain. She viewed Salazar, a devout Catholic like the Cains, as a kind of father figure, calling him her “crazy uncle.” She even came to believe that Salazar had recruited her partly to replace Kara Goucher, one of Salazar’s star runners who had abruptly departed in 2011. After joining the Oregon Project in 2004, Goucher went on to win the silver in the 10,000-meter race at the 2007 World Championships.
But things changed after Goucher gave birth to a son in late 2010. Months later, Salazar offered her Cytomel, a prescription thyroid medication that he said would help her lose weight as she prepared for the 2011 Boston Marathon, according to the USADA v. Salazar decision. She was already on a similar medication, so she declined. In the end she would finish fifth in the 2011 Boston Marathon, just six months after giving birth. But it was not good enough for Salazar. “She needs to lose her baby weight if she wants to be fast again,” he told members of Goucher’s family who had come to watch her race. During training sessions, Salazar made inappropriate comments about how her breasts had grown larger after giving birth to her son, the Gouchers said.
“He would be at the side of the track calling out runners’ splits but wouldn’t call Kara’s out,” Adam Goucher told me. “And when she’d ask him why he’d say, ‘I’m sorry, I was staring at your boobs! They’re so big — I couldn’t take my eyes off them.’”
Nike did not respond to questions concerning Salazar’s comments about Goucher’s breasts, nor did it respond to questions about the use of Cytomel at the Oregon Project.
Goucher and her husband were also unnerved by the things they were seeing after Mo Farah joined the team in 2011.
“Things became very ‘win at all costs’ very quickly, and while we didn’t suspect doping at first, that changed after the Prefontaine meet in 2011,” Adam Goucher said. “We saw Mo looking like a completely different athlete. It just didn’t add up how fast he went and how easy it was for him to run that 10K.”
In March, Farah told British media that untruthful answers he gave to anti-doping investigators had been due to misremembering what injections he’d been given; he maintains that he has not taken performance-enhancing drugs.
One day Salazar told the Gouchers that he wanted to put Mo, Galen, and Kara on a new supplement that had helped “some British cyclist.” When Adam asked whether it was legal, Salazar appeared to get angry but did not answer the question, Goucher said. The breaking point, however, came at the 2011 World Championships, in Daegu, South Korea, where Salazar asked her to take a strange pill he claimed was a supplement. When Farah asked why they couldn’t just have an injection as usual, Goucher began to suspect that the substance was probably not legal.
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Tara Welling, who joined the Oregon Project in 2012 when she was 23, said that by the time Salazar sent her to see Jeffrey Brown, the doctor in Houston, she had learned not to question her coach, according to testimony given to USADA. The only woman on the team at the time, she found Salazar “intimidating” and felt she needed to “prove something every workout.” When she didn’t live up to his high standards, she immediately knew it. It was “kind of scary,” she said.
After a successful injury-free college-running career, she tore her Achilles tendon in 2013 and in late 2014 suffered a stress fracture of her hip so severe she required crutches to move around. Unless she was immobilized by an injury, she said, Salazar would tell her to “just run through it.” His strenuous workouts left no time to recover, she felt.
When Mary Cain moved to Oregon to train with Salazar, she too began seeing her body fall apart. Like other women running for Salazar, she faced constant pressure to lose weight, despite the fact that her fitness level and results indicated she was already in ideal physical condition. Salazar’s obsession with Cain’s weight wore her down: To shame her, he would weigh her in front of both teammates and competitors.
When Cain did lose weight, her body rebelled. She didn’t have her period for three years, which, because of her young age, increased the risk of lifelong problems such as osteoporosis. To please Salazar, she subjected herself to punishing dietary restrictions and would sometimes try to force herself to throw up. She also began cutting herself. When she described this behavior to an Oregon Project employee she believed was a sports psychologist — in reality the Oregon Project at that time did not have a licensed sports psychologist on staff — he told her to toughen up.
Nike did not respond to specific questions about Cain’s allegations of abuse against Salazar, but instead said that it had “identified areas where we can do better in supporting female athletes.” These include “increasing women coaches in sports” and “investing in scientific research to understand the impact of elite athlete training of girls and women.”
After suffering a breakdown in 2015, Cain returned home and took some time away from the professional running circuit. She transferred to Fordham, where she earned a degree in business administration and took premed classes. Friends and colleagues from the running world reached out constantly to ask why she’d retired without at least making an announcement.
“I was like, uh, because I didn’t,” she said. When people asked why she left the Oregon Project, she said it was a “personal decision.”
For a time, Cain believed this, right up until last year, when the Court for Arbitration in Sport sided with the US Anti-Doping Agency over its decision to suspend Salazar for four years, which it backed up with a 140-page report.
After reading it, she realized what Salazar had done to her.
In December 2012, not long after Cain had committed to training under Salazar, Steve Magness sent an email to a USADA tip account: “Look into the Nike Oregon Project athletes.”
Magness had been an assistant coach at the Oregon Project from January 2011 to May 2012. In his short time there, he’d seen a lot of things that concerned him, and he worried how much more out of control things might get.
“I’m strongly suspicious of using testosterone cream as I saw it labeled in test results for Galen Rupp,” Magness wrote in his email. “Their head coach has a prescription himself for testosterone cream.”
USADA CEO Travis Tygart, who led an investigation into Lance Armstrong and Tailwind Sports, the tiny company behind his US Postal Service cycling team, knew a powerful corporation like Nike would be formidable. But it would also offer Tygart a chance, he thought, to do something he’d failed to do in the Armstrong case: prove a major sponsor’s complicity in systematic doping.
“While we never had any direct evidence of it [in the Armstrong case], you always worry and wonder about the sponsors,” Tygart told me. “Because there’s a lot of money in those who win, and for those whose sole existence is to make money you want to ensure that they’re not putting athletes in a position to go and break the rules in order to have a better return on their investment.”
Nike’s return on its investment in Salazar’s Oregon Project was clear. During the fiscal quarter in which Rupp and Farah won medals at the London Olympics, Nike’s revenues soared 10% from the previous year, to a record $6.7 billion.
In 2013 Tygart found his next whistleblowers: Kara and Adam Goucher. They had already spoken to the FBI about what they’d seen going in at the Oregon Project, but Kara was reluctant to speak with anyone else about it. What changed her mind was seeing Tygart on a television news program. “It was right after Lance Armstrong finally got taken down, and we were in Colorado Springs watching Travis Tygart on CNN,” Adam said. “Kara was like: ‘If we can talk to that guy, I’ll do it.’”
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One of the things they told Tygart was something he’d already been hearing from other whistleblowers: that Brown, the doctor in Houston, was a key figure in Salazar’s doping enterprise. Another source who told this to Tygart was running coach Danny Mackey, who was told by a coworker that he should visit Brown in Houston to receive performance-enhancing testosterone therapy while working at Nike’s sports-research lab in 2008. He told USADA investigators that the suggestion concerned him as a competitive athlete, so he asked for more detail and was told, according to the report, “This is what Alberto Salazar’s athletes do, and they haven’t gotten caught.” Salazar did not respond to requests for comment.
Years later, in 2015, Mackey filed a police report alleging that Nike executive John Capriotti had threatened him at a track meet in Eugene, Oregon, where he allegedly shouted: “You know what you f—— did. I’m going to f—— kill you.” Nike, where Capriotti is still employed, did not respond to requests for comment on the alleged incident.
Capriotti’s role at Nike was theoretically to keep Salazar in line, according to Adam Goucher. But whenever he or Kara complained to Capriotti about their coach’s behavior, he would tell them, “Well, what can I do? He has a direct line to Phil Knight. Alberto is going to do whatever he wants, and I can’t stop him.” Phil Knight did not respond to requests for comment, and Nike did not respond to requests for comment on his behalf.
When I asked whether Goucher believed Capriotti had indeed threatened Mackey, he told me he was certain that he had; when I asked whether he thought Capriotti had gotten in trouble for it, he said he felt equally sure that he hadn’t because “that would only happen if the people above Capriotti at Nike had a functioning moral compass.”
Nike, meanwhile, hired lawyers to represent anyone even remotely connected to the Oregon Project, which may have prevented more people from coming forward. “Nike paid for lawyers for the athletes, for the doctor, for the coach, for the other witnesses, for the pharmacy,” Tygart told me. “They essentially drew up the drawbridge, lit the moat on fire, put sharpshooters on the towers, and signaled that they were going to do pretty much everything they could do to ensure that visitors didn’t get inside the Nike castle to see what was going on in there and what the truth was.”
In the meantime, more people were getting fed up with life inside the walls of that castle.
On March 5, 2018, the results of a damning survey landed on Parker’s desk, a thick packet filled with documentary evidence and claims of systemic, company-wide sexual harassment and gender discrimination. It had been conducted by a handful of women working out of the Beaverton headquarters, where there was a growing sense that women felt like second-class citizens. They had conducted an informal survey to gather evidence of the individual and collective harm they believed women had endured at every level of Nike’s corporate hierarchy. They gathered allegations of inappropriate sexual and romantic advances, gender-based wage disparity, and, relative to male peers within the company, fewer opportunities for advancement and promotion.
Because some female employees who were alleging harassment and discrimination had already been talking to the media, Parker had little choice but to cull members of Nike’s senior leadership, including his likely successor, Trevor Edwards. In total, about a dozen senior executives would leave the company amid the fallout from the survey. (Edwards, through his attorney, did not respond to a request for comment. Nike, where Parker is still employed, declined to comment on his behalf.)
But that wasn’t all. In August 2018, former longtime Nike employees Kelly Cahill and Sara Johnston filed a lawsuit against the company, where each woman had for years felt that their attempts to climb the corporate ladder had been unfairly thwarted. Nike’s corporate hierarchy, they claimed, was “an unclimbable pyramid” for women, who faced a culture of sexual harassment and gender bias.
Cahill, for example, alleged that she had been paid $20,000 less than a male colleague on her team, and was passed over for promotion despite her significant experience and expertise. She further alleged that, when she left Nike, she was replaced by a man who was paid a higher salary than she’d been earning. Johnston claimed she had received inappropriate messages and nude photos from a male coworker after a company party in 2015. “At Nike,” they alleged, “the numbers tell a story of a company where women are devalued and demeaned.”
Ultimately, Cahill and Johnston sought class-action status, opening the door for more than 500 additional class members. It would make the matter far more costly and far more embarrassing for Nike, as there would presumably be more playing out in public rather than a more private resolution. The litigation is ongoing.
Nike did not respond to questions about the lawsuit. But in response to questions about gender discrimination and sexual harassment within the company, the company said it “opposes discrimination of any type and has a long-standing commitment to diversity and inclusion,” and will “accelerate our efforts to expand representation of women and under-represented groups.”
At the same time, Nike lawyers must grapple with another, more curious case. On August 31, 2018, three Nike shareholders filed a lawsuit against Phil Knight, Mark Parker, and Trevor Edwards. They alleged that these former top Nike executives had “facilitated and knowingly ignored the hostile work environment that has now harmed, and threatens to further tarnish and impair, the company’s financial position.” It represents a novel approach for activist investors, who typically go after board members on the basis of unsound investments, mergers, or acquisitions. Gustavo Bruckner, an attorney representing one of the investors, said that in times like these, when so much bad behavior is rewarded rather than punished, investors must be willing to “stand in the front lines policing corporate wrongdoing.” (Nike did not respond to requests for comment on the lawsuit.)
But there was still more wrongdoing. And not all of it was especially upsetting to Nike’s investors.
In 2007, after decades of searching for cheaper labor, Nike at last found just that in a manufacturing partner: The Qingdao Taekwong shoe factory, in China’s Shangdong Province. At the time, it produced more than 7 million pairs of Nike shoes each year. Its workers do not strike, and they do not complain about their wages — perhaps because many of them are Uighurs who have been relocated from Xinjiang Province.
For these ethnic Muslim minority workers, working in the factory is part of a reeducation designed to make them loyal to China’s central government, according to a report by the Australian Strategic Policy Institute. There are watchtowers and barbed-wire fences to keep them from leaving the factory. When they are not working they endure “patriotic education.” Another factory, in Anhui, China, operated by Haoyuanpeng Clothing Manufacturing, uses similarly exploitative Uighurs labor to produce clothing for Nike and claimed on its website to supply Adidas and Puma as well. At both factories, conditions “strongly suggest forced labor,” according to the report.
This is all very much at odds with the image Nike had sought to promote in the aftermath of its labor controversies in the ’90s. Since then, it has portrayed itself as a global manufacturing leader that submits voluntarily to outside audits. But it may have simply wrested control of the auditing from any group that might find fault with its labor practices.
Mike Pont/WireImage/Getty Images; Samantha Lee/Business Insider
This image-management campaign began in early 1997, when Knight responded to calls for independent audits of Nike factories by hiring a firm called GoodWorks International, owned by Andrew Young, a former mayor of Atlanta and US ambassador to the United Nations. When Young issued his report on Nike’s use of overseas labor, Knight was so pleased with his conclusions that he took out full-page newspaper advertisements highlighting them. “It is my sincere belief that Nike is doing a good job,” one ad in The New York Times read. “But Nike can and should do better.”
Young had recommended that third-party monitoring of Nike’s overseas factories should not be left to global labor and human-rights organizations. The benefits of this approach for Nike were evident: Young, for example, had relied entirely on Nike interpreters during his two weeks of interviews with workers making Nike shoes at factories in Asia.
Confidence in Nike’s ability to monitor its own overseas factories was further undermined in November of 1997, when a disgruntled employee leaked excerpts from a series of formal audits Nike had commissioned Ernst & Young to prepare. These audits, which the accounting firm had been tasked with creating in 1994, were far less-forgiving than the Young report. It found, for example, that workers at the factory where Nguyen Ti Tu Phuong died making Nike shoes did not all have sufficient safety equipment or training. Some were forced to work more hours than allowed by law, making them more likely to become injured or killed on the job. But instead of acting on information in that report, which outlined exactly which items needed to be addressed to ensure the safety of workers at its factories in Asia, Nike instead commissioned the Young report and promoted the rosier picture it painted.
In the years to come, Knight fought hard to ensure that any monitoring of Nike’s overseas factories be carried out by the Fair Labor Association, a relatively toothless organization that had executives from a number of apparel companies sitting on its board. He won that battle, and the result, irrespective of Nike’s intent or knowledge, was that it took years for anyone to learn that Nike relied on forced labor to produce its shoes and apparel. Consequently, it took that much longer for the world to recognize the holocaust that has been carried out against the Uighur people in Xinjiang.
Nike said it does not “directly” source products from Xinjiang and “does not have relationships with the Haoyuanpeng Clothing Manufacturing, Qingdao Jifa Group, or Esquel facilities” there. The company also said it “remains dedicated to ethical and responsible manufacturing” and is conducting “ongoing diligence with our suppliers in China to identify and assess potential risks related to employment of people from” the Xinjiang Uighur Autonomous Region.
On September 30, 2019, Salazar received a four-year doping suspension. The next day, Mark Parker sent Nike employees an email that some found oddly defensive.
“As for Alberto, it’s clearly a difficult time for him, his family and his athletes,” Parker wrote. “We will continue to support him in his appeal as a four-year suspension for someone who acted in good faith is wrong.”
But Salazar is up against quite a lot in his appeal: Emails contained in the decision reached by antidoping authorities showed that Parker had been briefed on several occasions regarding medical experiments conducted by Salazar. One of these experiments, conducted at Nike’s Beaverton headquarters, involved testing the effects of AndroGel, a topical testosterone product. Two squirts of the gel, Brown told Parker in an email, produced only a slight rise in an athlete’s hormone levels, nothing that would trigger concern among antidoping authorities. Next, he wrote, they would repeat the experiment using three pumps of the performance-enhancing testosterone gel. In an email, Parker told Salazar it “will be interesting to determine the minimal amount of topical male hormone required to create a positive test.”
Three weeks after the news about Salazar’s ban, Nike announced Parker would be stepping down from his role as CEO; he remains employed as the company’s executive chairman. Nike did not respond to requests for comment from Parker.
Adam Goucher doesn’t think Parker’s change in status will change much with regard to Nike’s unwavering support for Salazar. “I don’t think it has anything to do with who the CEO is,” Goucher told me. “I think it’s Phil. This all goes directly to Phil Knight, and I think he will spend whatever it takes to try and save Alberto. Personally, I hope it ends up worse for him. He should have got a lifetime ban. The arbitrators were very soft on him. Justice seems to be something that’s a bit hard to find anymore.”
Phil Knight did not respond to requests for comment and Nike did not comment on his behalf.
“There’s this rebellious ‘we do things our own way’ thing that’s baked into the DNA of the company, and it seems like years and years of making up their own rule book has finally caught up with them in these changing times,” Bakas said. “It’s a culture of arrogance.”
One symptom of this culture, Bakas said, was that tendency to treat every problem as a matter of public relations. In the late ’90s, this meant creating a PR narrative to counter unfavorable media coverage of the overseas sweatshops it used, while simultaneously creating a response tailored specifically to work on Nike’s own employees. “The PR narrative that they drilled into those of us on the apparel team was basically that these people living in third-world countries were lucky to have a job at a Nike factory,” Bakas said, “because they were getting paid so much more than the national average, and that we weren’t exploiting them but helping their economy.”
Economists who have studied this phenomenon — which some have called “the Nike effect” — say it comes with a strong caveat. In countries such as Indonesia, they have found, workers at Nike factories tend to receive pay raises only in response to backlash generated by protests organized by human-rights groups and labor organizations. If it does, in the end, help the country’s economy, these economists found that it does so at the expense of its workers, who often face extraordinary risks working in unsafe conditions. For its part, Nike said the company is “committed to conducting our business ethically and sustainably, which includes advancing respect for human rights in our supply chain.”
In December, the company’s spell over its employees seemed to be losing its power. For the first time in its history, Nike employees protested on the grounds of the Beaverton campus after a building named for Alberto Salazar was reopened after renovations. Mary Cain, who had recently shared her story in an op-ed for The New York Times, thanked the protestors for supporting her.
In the aftermath of the Cain story, the US became hostile territory for what was seen as Nike’s “woke“ posturing. The company took a more global approach. In December, it announced a full-body swimsuit, tunic, and leggings, designed for Muslim women athletes. The following month, Nike aired its first ad, which was tailor made for Chinese New Year, even as the country’s ethnic minority Muslims toiled in the company’s factories under conditions that have been described as forced labor.
Nike hasn’t said much of anything about this controversy except that it planned to review its supply chain in China. What it finds when it conducts the review may depend on what it goes looking for, and whether it’s willing to sacrifice everything to stand for something.
Joshua Hunt is an American journalist based in Brooklyn and Tokyo. His writing has appeared in The New Yorker, The California Sunday Magazine, The Atavist, and elsewhere. His first book, “University of Nike: How Corporate Cash Bought American Higher Education,” was published in October 2018.
Siddhartha Mahanta is a features editor at Business Insider.
Samantha Lee is the Senior Graphics Editor for Business Insider.
Hollis Johnson is the Senior Photo Editor at Business Insider.
Skye Gould is the Design Director for Business Insider.
Claire Groden is a JD candidate at the NYU School of Law.