Nike said today it will settle a US lawsuit that had become a constitutional battle over whether free-speech rights protected a publicity campaign by the company to counter accusations that Asian sweatshops made its footwear.
Nike, the world's largest maker of athletic shoes, said it will pay an additional $1.5 million on workplace-related programmes over the next three years.
The sum will be paid to Fair Labor Association, a Washington, DC-based group that promotes workers' education and economic welfare.
The lawsuit was filed in 1998 by Mr Marc Kasky, a SanFrancisco consumer activist, under a California consumerprotection law aimed at eliminating unfair competition and false advertising.
The lawsuit claimed Nike misled the public about working conditions for its Vietnamese, Chinese and Indonesian laborers, and that its statements amounted to false advertising.
The US Supreme Court in June cleared the way for the suit to proceed by refusing to decide whether the US Constitution's free-speech rights protected Nike's publicity campaign.