The US Supreme Court ended its term on June 28 without making any decision on Nike’s case which seeks a ruling on a company’s right to the freedom of speech. Without ruling on the merits of the case, the justices voted 6-3 that they were wrong to hear the case in the first place.

Their decision means that an anti-globalisation activist in California can pursue his lawsuit against Nike, claiming damages related to their publicity campaign defending their overseas labour practices. The business community had hoped that the Supreme Court would put a stop to the case and rule that Nike’s statements were protected by the right to freedom of speech under the US Constitution.

If Nike loses at the trial stage, they can then raise the argument of freedom of speech on appeal. In the meantime, corporate critics say the case could have implications on the speech of many companies worldwide.

The case arose from a California Supreme Court ruling last May that Nike’s statements about their labour practices amounted to a commercial speech, aimed at selling Nike products, and were thus not fully protected under the constitution.

Nike, the world’s largest sports shoe makers, reported that quarterly earnings had risen as more robust overseas sales had offset tepid US demand. Revenue rose 11% to $2.985 billion from $2.682 billion a year ago. Gross margins improved to 41.5% from 40.3% last year, the highest level in the company’s history. Net income in the fourth quarter was $246.2 million ($208.4 million).

Source: the Financial Times