The role of free speech as applied to commercial entities versus individuals has been a topic of great concern for professionals within the corporate public relations, marketing and advertising industries. Historically, the courts have made clear distinctions between free speech for citizens and speech for commercial entities with more restrictions typically being placed on businesses. Using the Nike v. Kasky case of 1998 as a guide to generate further dialogue, this article seeks to evaluate the history and impact of First Amendment rights for commercial businesses, the ability of companies- not just individuals- to advocate for their broader ideas on social issues publicly, and the consequences of restricting free speech in the corporate arena.
First Amendment issues and the relevance of the case will be explored as well as the impact to today’s PR, marketing and advertising professionals who actively engage in corporate social responsibility and advocacy as part of their company’s strategic plan. Ultimately, this article seeks greater support for the notion that businesses deserve the right to voice themselves, just like consumers, labor and special interest groups and government, in dialogue that contributes to the betterment of American society.
History of Commercial Speech
The case of Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, Inc. (1976) defined commercial speech first by outlining was not included as commercial speech; additionally, a separate case Pittsburgh Press v. Pittsburgh Comm’n on Human Relations (1973) stated commercial speech does “no more than propose a commercial transaction” (Eyun Jung 2004).
According to Eyun-Jung (2004), courts can use a limited purpose test to decide whether certain speech is subject to laws aimed at preventing false advertising. Considering the speaker, the audience and the message content are components of the test. The case of Bolger v. Young’s Drug Products Corporation (1983) recognized three markers to establish commercial speech, known today as the Bolger test: some form of advertisement must be present, the advertisement must refer to a specific product and the speaker has a monetary motivation (Eyun-Jung 2004). Several critics indicate Nike’s campaign, as outlined below, should be classified as public debate and mixed commercial speech.
Kasky v. Nike Case Background
In 1998, a California resident and activist named Marc Kasky sued athletic sportwear and shoe manufacturing giant Nike Inc. citing California’s unfair trade practice and false advertising statute, claiming the company made several misleading statements in several public relations collateral pieces regarding business practices in Asia (Woldt 2003). Specifically, Kasky stated that Nike’s overseas employees didn’t make enough money to live on and were paid twice less the local minimum wage (PR Newswire 2012).
Nike was already receiving a tremendous amount of mass media coverage for their overseas practices – primarily the use of sweatshops- which led to the communications campaign. According to Eyun-Jung (2004), tactics included press releases, letters to editors, university staff and athletic director spokespersons. Nike ran ads in newspapers to promote a report by GoodWorks International finding no evidence of unsafe working conditions in Nike’s overseas factories. The report was distributed for public relations purposes.
Kasky wanted Nike to forfeit any profits made from those statements. Nike countered that their comments were not commercial speech and were protected under the First Amendment, hoping the court would throw the case out entirely; however, the case went directly to the California Supreme Court, highlighting its unusualness and importance even further (Bendell 2003). Since the United States Supreme Court’s definition of commercial speech defines speech that proposes a commercial transaction; therefore, Nike thought in this case they should obtain the constitutional protection that equivalent comments would receive if voiced by individual citizens.
The California Court of Appeals supported Nike because the PR tools were created in an effort to promote a favorable image and did not fit two of the three characteristics of commercial speech: advertising format and reference to specific product. Additionally, the court thought the issue itself was an issue of public distress that required dialogue from both parties. However, the California Supreme Court reversed the lower court decision.
In 2002, the California Supreme Court decided in a 4-to-3 vote that Nike’s statements were subject to advertising law under commercial speech. Specifically, majority opinion cited that since Nike was engaged in commerce, their comments were likely to influence shoppers in their commercial decisions (Liptak 2003). The U.S. Supreme Court decided not to hear the case at all. However, According to justices John Paul Stevens, Justices David Souter and Ruth Bader Ginsburg, this case offered different First Amendment difficulties because the speech at issue represented a blending of commercial speech, noncommercial speech and debate on an issue of public importance (Ramey 2003).
In the wake of the issue, Nike stopped making it’s annual corporate social responsibility report available for public download and severly limited public statements. During the settlement process Nike donated $1.5 million to the Fair Labor Association (Liptak 2003). According to the website fairlabor.org, the organization’s mission is “to combine the efforts of business, civil society organizations, and colleges and universities to promote and protect workers’ rights and to improve working conditions globally through adherence to international standards.”
Several prominent media companies, including The New York Times, The Washington Post and CBS News sided with Nike publicly in filings with the Supreme Court citing deprivation of public access to important information, as well as competing First Amendment views (Woldt 2016). The Council of Public Relations Firms submitted an amicus brief asking for a reversal under the grounds that if corporations were denied the right to take a stand on issues, explain their actions, inform the public about their products and services and defend themselves, then implications would resound for not just the business community, but for consumers and the Constitution (PR Newswire 2002).
First Amendment and False Advertising Issues
Regarding false or misleading statements, the categorization is especially important because commercial speech does not receive any protection under the First Amendment. However, noncommercial speech is fully protected by the First Amendment, even if false or misleading. According to Singer (2016), it makes sense that corporate speech is less protected than individual speech, primarily based on the history of the First Amendment and the founding fathers’ original intent of the amendment. According to justices John Paul Stevens, Justices David Souter and Ruth Bader Ginsburg, this case presents novel First Amendment questions because the speech at issue represented a blending of commercial speech, noncommercial speech and debate on an issue of public importance. According to Singer (2016), the only protected class is the people.
False advertising claims in California are of the norm and government officials are no strangers to high profile cases regarding it. The Sugar Association in Los Angeles filed a lawsuit in December 2004 to force McNeil Nutritionals and parent company Johnson & Johnson to change their advertising. McNeil has had launched a multi-million dollar advertising campaign, misleading consumers into believing that Splenda was as natural as sugar, when in fact Splenda was a hydrocarbon containing chlorine. Later in 2010, prosecutors in California won a case against Overstock.com for posting comparison prices for its offerings and overstating the amount of money consumers would save by using the site (Klein 2014). In Nike v. Kasky, the accuracy or deceptiveness of Nike’s portrayals of its business practices was never established; accordingly, Nike has maintained that it was supporting protected political speech by offering its side of a discussion over the outcomes of globalization (Greenhouse 2003).
Why the case is still relevant today
While attorneys cite the case as a victory for human rights that extend well beyond Nike, the lines categorizing commercial and non-commercial speech deserve further analysis. Since commercial free speech receives little support under the Constitution (Singer 2016), integrated marketing communications professionals should always be prepared for scrutiny and legality of their corporate communications campaigns. Known as advocacy advertising, Cutler (1991) defines this type of communication as a special form of advertising where organizations express their opinions on controversial subject matter in order to sway public opinion. However, it is highly unlikely that criteria will be applied the same way to every case, or determining the legal status of said messaging is interpreted the same, every time.
Public relations professionals should also consider the Nike case by restricting communications on social, political or legal issues that could reach their company or organization’s clients. Trends like social media managers sharing Instagram posts, infographics or Facebook posts reflecting a stance on an international issue could possibly be misconstrued as reflecting the corporate stance of the business over emotional or supportive messaging. At the same time, public relations practitioners seek to be their companies’ own newsroom, telling their stories first before relying on traditional news media to interpret their comments. If these cases force practitioners to rely on other sources to keep the public informed about issues, the fate of the proactive PR practice entirely may be at stake.
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Tiffany M. Russell, APR, CDME 