For Corporate Speech, the Other Shoe Is Yet to Drop

Corporations will now think twice before defending themselves via advertising or public relations efforts. Last week the U.S. Supreme Court failed to resolve the issue of corporate free speech when it dismissed Nike v. Kasky on a technicality, sending the case back to California, where it will likely linger in appeals court for years.Without definitive legal protection, the decision is likely to result in a self-imposed gag order among corporations, with the reasoning that the less said about issues affecting them the better. In one of three dissenting opinions, Justice Stephen Breyer wrote that delaying a decision "may inhibit the exercise of constitutionally protected rights of free speech without making the issue significantly easier to decide later on."Said Reed Bolton Byrum, president and CEO of the Public Relations Society of America, "The decision is devastating. It has a chilling effect for corporate communications." PRSA argues the fallout will be increased litigation and corporations' dropping out of public debate on hot topics such as cloning, automotive safety and FDA drug approval."We're back to the drawing board," said Robin Conrad, attorney for the U.S. Chamber of Commerce on the case. "The court really missed out on an opportunity to provide the business community with some guidance."The case stems from statements Nike made in 1997 about conditions in its Asian factories and a print ad in which the sneaker company said it was doing a good job in regard to overseas labor practices but could do better. The following year, environmental activist Marc Kasky sued Nike in California, arguing that its disclaimers constituted false advertising under the state's consumer-protection laws. Thirty-one "friends of the court," ranging from President Bush to the New York Times Co. and including the major advertising industry groups, filed amicus briefs supporting Nike. They allege that California's ruling in favor of Kasky makes all companies vulnerable to attack whenever they respond to issues of public debate. "What the decision says is that on any issue that is subject to public debate, you'd be better advised to shut up," said Doug Wood, general counsel for the Association of National Advertisers. On the upside: "The Supreme court said, in essence, that had the Court taken the case, Nike would have won." Added Conrad: "The irony is that under the First Amendment, Kasky can make false accusations and Nike can't. He's protected, but a company, under the California ruling, could be subject to accusations of false advertising with less First Amendment protection."

Brand Marketing

For Corporate Speech, the Other Shoe Is Yet to Drop

Sandy Brown

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