Nike is the subject of a new class action lawsuit alleging that the company failed to refund tariff-related costs to consumers after passing those costs on through higher prices for footwear and apparel [1]. The lawsuit, filed in federal court in Portland, Oregon, claims that Nike raised prices on some footwear by $5 to $10 and on some apparel by $2 to $10 to offset approximately $1 billion in tariffs paid on imported goods [1]. Plaintiffs argue that, following a U.S. Supreme Court ruling in February which determined the president lacked authority under the International Emergency Economic Powers Act (IEEPA) to impose certain tariffs, Nike should not be allowed to retain 'significant' refunds it may receive from the federal government while having already collected the costs from consumers [1].
The complaint asserts that Nike has made no legally binding commitment to return tariff-related overcharges to consumers and warns that, unless restrained by the court, Nike could recover the same tariff payments twice—once from consumers and again from the government through refunds [1]. This lawsuit is part of a broader wave of litigation, with more than 2,000 companies, including Costco, having filed suits in the U.S. Court of International Trade to recover tariffs paid on imported goods [1].
Nike's stock (NKE) closed at $44.14, down $0.27 or 0.61% on the day the news was reported [1]. During a March conference call, Nike stated that its fiscal quarter ending in August 2026 would likely be the final period in which tariffs materially impact its gross margins [1].
The lawsuit follows Nike's recent announcement of plans to lay off approximately 1,400 employees, primarily within its technology division across North America, Asia, and Europe, representing just under 2% of its global workforce [1]. Nike declined to comment on the lawsuit to FOX Business [1].
CONCLUSION
Nike is facing legal challenges over its handling of tariff refunds and consumer pricing, with the outcome potentially impacting its financials and reputation. The company's recent workforce reductions and ongoing tariff-related litigation add to the uncertainty, as investors monitor developments closely.