Women applying for work in a factory under contract with Nike in China say they were made to take a pregnancy test and were not hired if the test came back positive.
Other violations at Nike factories abroad include verbal abuse, unaccounted overtime, illegal wage deductions, missing fire extinguishers, dirty toilets and inadequate lighting, a study of factory conditions overseas has found.
But the conditions are similar to those found at factories of other companies that have agreed to be monitored, said officials with the Fair Labor Association, which published its second annual report this week after auditing 39 Nike factories last year.
The shoe giant, headquartered in a suburb of Portland, USA, is one of 12 major brands - including Nike rivals Reebok, Puma and Adidas-Salomon - that have agreed to undergo the monitoring process by the Washington DC-based watchdog.
The group's report cites violations at 10 companies last year, ranging from minor sanitary issues to more serious wage and harassment violations.
"There are problems in every single factory. That's the easy part," said Margaret Hawley, monitoring programme coordinator for the Fair Labor Association. "The hard part is what are these companies doing to fix them?"
Caitlin Morris, senior manager for global issues at Nike, said the company took each and every single violation seriously following up with training sessions for its overseas work force.
But she stressed that all manufacturers working with overseas contractors are "dealing with the same kinds of issues."
Investigators arrived unannounced at the Nike plant, which employs 1700 workers in China, on 14 August 2003. Female workers interviewed by the monitors said they were required to take a pregnancy test. If they were found to be pregnant, the factory would not hire them.
Workers also said if they were late to work more than three times, managers would deduct wages equal to one day's pay. Supervisors yelled at workers, toilets in the women's dormitory were unclean and the factory had not allowed the union to organise.
Chinese workers have complained
of harsh pay deductions
Auret van Heerden the president and CEO of the Fair Labor Association said wage violations were often a problem in China because there were more workers than jobs, but pregnancy discrimination is much more common in Latin America, where factories could not afford to pay maternity benefits.
According to Nike officials quoted in the report, pregnancy screening is not part of their hiring process, but managers at the Chinese factory do test employees monthly. The report quotes factory managers as saying the testing is in an effort to comply with Chinese labour law, which prohibits women who are more than seven-months pregnant from working overtime.
Nike contends the female workers interviewed by the auditors may have been "confused" by the purpose of the monthly screen, the report says.
Part of their remediation effort, according to the report, includes posting an announcement on the factory bulletin board, informing workers of the purpose of the screen.
"There are problems in every single factory. That's the easy part ... The hard part is what are these companies doing to fix them?"
Fair Labor Association
That was also done in response to allegations by workers that say their wages were being cut because of tardiness. Nike factory officials deny that such deductions occurred, the report says. But a sign was posted anyway to inform workers of their rights.
At the same factory, Nike's compliance team held a training session to teach supervisors not to yell at workers. And safety issues were addressed as well, the report says.
"I've never been in a factory where I haven't found something wrong. That's the nature of factory production," van Heerden said.
"The trick is whether the company has the ability to pick up on those violations and has a system for fixing them."
Nike is far from alone among the 12 companies surveyed.
In Malaysia, at a factory used by both Patagonia and Nordstrom, workers reported being verbally abused. At a Reebok factory in China, monitors found that only 51 of 851 workers were receiving pension, injury, unemployment and medical insurance benefits.
At a factory used by Adidas, five randomly chosen employees were found to have worked more than two months straight, without a single day off.
Thirty percent of workers at an Eddie Bauer garment plant in China received less than the minimum wage.
But while 10 of the 12 companies were found to have some kind of violation, Nike had the most. That is a function of the fact that the shoe manufacturer had by far the most factories surveyed - 39 in all, compared to only 22 for Reebok, 13 for Adidas and 12 for Nordstrom.
A decade after Nike's sweatshop controversy, the world's largest athletic footwear and apparel manufacturer remains at the centre of scrutiny - in part because it remains the industry leader.