Under Armour: New report on the company's culture was 'tough to read'

Under Armour is telling employees that it will fix the company's culture after a report in The Wall Street J...

Posted: Nov 6, 2018 8:17 AM
Updated: Nov 6, 2018 8:17 AM

Under Armour is telling employees that it will fix the company's culture after a report in The Wall Street Journal revealed a practice that had allowed employees to charge strip club visits to their corporate cards.

In a letter obtained by CNN Business, CEO Kevin Plank and President Patrik Frisk told employees late Monday that the Journal story was "tough to read."

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"This is not the culture we envision for Under Armour," they wrote.

Plank and Frisk said the company will hasten a "meaningful cultural transformation" that they say is already happening at Under Armour. "We can and will do better," they added.

The letter was sent after the Journal reported earlier Monday that Under Armour (UA) told employees in an email in February that it would no longer reimburse certain expenses, including adult entertainment and gambling.

According to the article, executives and employees, including Plank, attended strip clubs with athletes and co-workers over the years. The Journal cited sources who said the company often paid for the visits of "many attendees."

Under Armour told the Journal that Plank didn't conduct business at strip clubs or use company funds at such venues.

The paper's investigation into the culture at the sportswear company is based on interviews with more than a dozen current and former employees and executives. The strip club visits were part of a workplace environment that women at the company found demeaning, the Journal found.

Under Armour has partnerships with several prominent female athletes, including ballerina Misty Copeland and ski racer Lindsey Vonn.

In a statement, the company said it has "addressed these serious allegations of the past and will continue to address workplace behavior that violates our policies."

"Inappropriate behavior that challenges our values or violates our policies is unacceptable — and will not be tolerated," the company said. "We are committed to providing a respectful and inclusive workplace."

Rival sportswear company Nike (NKE) has also grappled with claims that the company's work environment has been demeaning to women. In August, two women who worked at Nike filed a lawsuit accusing the company of systemic gender discrimination.

Here is the full letter that Plank and Frisk sent to employees Monday:

Dear UA Teammates,

Leadership means that when faced with scrutiny, criticism or accusations - the most important question to ask is if it's deserved. At Under Armour, we own our truth.

We are writing to you today in response to an article that was published by the Wall Street Journal, which alleges specific instances of inappropriate workplace behavior and a challenging environment. This was tough to read. This is not the culture we envision for Under Armour.

We believe that there is systemic inequality in the global workplace and will embrace this opportunity to accelerate the ongoing meaningful cultural transformation that is already underway at Under Armour. We can and will do better.

You deserve to work in a respectful and empowering environment. Inappropriate behavior that challenges our values or violates our policies is unacceptable - and will not be tolerated. We believe that our diversity and collective decency will drive our future.

Greater than the professional talent and expertise that you bring to Under Armour is who you are as an individual - your heart, your values, your story. Your voice is critical and we continue to listen humbly and act decisively. We can't protect this house if we are not protecting each other. This is leadership's first priority and responsibility.

Our culture and values define us. Period. Over the past few years, we've designed and delivered a number of signature programs including our onboarding and leadership development courses, unconscious bias training, Culture Clubs, and our Diversity Driving Innovation platform. As we further strengthen this foundation and learn from the thoughtful work being executed already across our global organization, your leadership team remains steadfastly committed to:

* Enabling a work environment that allows you to be your best;

* Embracing and enforcing policies and protocols to improve the workplace;

* Providing safe, confidential channels (Teammate Resource Guide) to identify inappropriate behavior you experience, hear about or witness;

* Addressing inappropriate behavior swiftly and resolutely; and,

* Using Teammate Engagement Survey results to identify and activate specific, goal-oriented actions to strengthen our culture.

Our mission, Under Armour Makes You Better, is an ethos that spans significantly beyond shirts and shoes. It should inform every interaction we have with each other, creating the freedom for teammates to be their best self at work, at home and in their community.

We look forward to engaging you directly and honestly in the days and months ahead.

Kevin & Patrik

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