Gucci Pre-Fall 2018

Any business will come up against legal issues in due course, and fashion, despite a sheen of glamour, is no exception.

Players in an industry valued at well over a trillion dollars may even be more litigious than one would expect, especially considering the financial future of a brand like J. Crew or Adidas can hinge on something as ephemeral as a stripe or the “good will” of a name. But 2017 has also been a year of advocacy around uncomfortable issues like sexual harassment and gender discrimination, from which fashion is far from insulated.

Here, WWD has gathered some of the lawsuits over the last year that rippled throughout the industry:

Case(s): Puma and Gucci and Adidas vs. Forever 21

StreetstyleStreet Style, Spring Summer 2018, Milan Fashion Week, Italy - 21 Sep 2017 WEARING GUCCI

Gucci street style during Milan Fashion Week.  Julien Boudet/BFA/REX/Shutterstock

Issue: Design copying

Summary: Lawyers for Forever 21 have been keeping busy this year. First, Adidas accused the fast-fashion chain of copying its trademarked three-stripe design on a range of goods, then Kering-operated Puma launched a battle over what it argued were clear knockoffs of popular shoe designs by Rihanna for her Fenty line. Undeterred, Forever 21 then took a preemptive strike at Gucci, which had allegedly sent it cease-and-desist letters regarding striped apparel it claimed was a rip-off of its classic and trademarked grosgrain two-tone stripe details. The luxury brand hit back with claims of infringement, arguing Forever 21’s “blatant exploitation” of its designs could not continue. Adidas and Puma’s arguments were also along those lines, but all of the cases are ongoing, with Forever 21 generally defending itself as manufacturing popular, but unprotectable, designs.

What It Could Mean: Sweeping rulings on design and trademark infringement in fashion are scarce, and judges tend to be tasked first with deciding if a given design is even worthy of protection, and then move onto culpability. Should a judge find Forever 21 took another brand’s ideas and used them for its own gain, it would at least dampen its proclivity for copycat designs and signal to others like it that courts are taking a serious look at litigation over designs. The amount of litigation alleging design copies could also increase exponentially.

Case: Jason Boyce vs. Bruce Weber

Bruce Weber

Bruce Weber  Clint Spaulding/WWD

Issue: Mistreatment of fashion models

Summary: A formal lawsuit by a model against a photographer seemed to be inevitable in the aftermath of assault and harassment allegations levied by multiple actors against movie mogul Harvey Weinstein, but one against Bruce Weber may have been a surprise. Nevertheless, Jason Boyce accused the photographer, known for his obsession with golden retrievers and most often working in black-and-white, of “casting couch” practices and forced kissing and sexual touching. Boyce alleged in his complaint that Weber’s alleged transgressions are widespread in the fashion industry, a claim that models like Christy Turlington, Edie Campbell and Cameron Russell have backed up in their own assessments of the problem.      

What It Could Mean: A bill in New York is already in the works to offer models protection and recourse for harassment, but there are surely more stories to be aired out and more lawsuits to come.

Case(s): Sales Associates vs. Forever 21 and Gucci and Sterling Jewelers and Wal-Mart

A Forever 21 store.  Shutterstock / Trong Nguyen

Issue: Worker harassment, discrimination, negligence

Summary: There has been a string of worker lawsuits against some of the biggest and well-known retailers and brands this year, and none look to be headed for resolution anytime soon. Forever 21 is being accused of allowing a hidden camera to be installed inside an employee bathroom, which was discovered only because footage of one former saleswoman ended up online. A former Gucci saleswoman claims she was regularly subjected to sexual taunts and alarming encounters with her store manager with no recourse. Sterling Jewelers hired its first female ceo in the wake of years-long arbitration turning up dozens of accounts of harassment by male executives and managers. And Wal-Mart Stores Inc. is again being accused of systematically paying and promoting women in its stores less than men.      

What It Could Mean: Retail, which employs some 4.6 million people in the U.S., where a majority of sales associates are women, could also be due for something of a reckoning. Lawsuits are often the first signal to lawmakers, and sometimes companies, that issues are systemic and require broader action. If any of the above lawsuits resulted in a win for a plaintiff, retailers would at least be on notice that ensuring the safety and rights of their workers should be very high on any list of business priorities.     

Case(s): Lenders vs. J. Crew and Sycamore Partners

Hold for Swayne Hall Business Photo-A shopper passes the display in the window of a J.Crew store in the Shadyside shopping district of PittsburghConsumer Spending, Pittsburgh, USA - 10 Feb 2017

J. Crew  AP/REX/Shutterstock

Issue: Asset movement

Summary: J. Crew cut a deal with the majority of its term-loan lenders after being sued for shifting its valuable intellectual property into a new holding company in order to back a new loan, but a couple of hold-out lenders aren’t on board and are still pushing a New York judge to block the move. If that happened it would effectively bankrupt the struggling retailer. Sycamore Partners Management, the owner of Hot Topic, is being accused of similar maneuvering by creditors. The claim Hot Topic’s plus-size affiliate brand Torrid was intentionally separated from the business before going public earlier this year, leaving the profits outside the reach of lenders. 

What It Could Mean: With a number of retailers still trying to navigate changes in consumer habits, alleged financing schemes like the above could get more popular and see more creditors vying to monetize assets. But if the courts find J. Crew or Sycamore violated their lender agreements, they could be forced into dire financial straits.

Case(s): L’Oréal vs. Shiseido

Adwoa Aboah and models on the catwalkL'Oreal show, Runway, Spring Summer 2018, Paris Fashion Week, France - 01 Oct 2017

Adwoa Aboah leads during L’Oréal’s recent runway presentation.  Swan Gallet/WWD/REX/Shutterstock

Issue: Non-compete contracts  

Summary: Beauty companies are often fighting for the same customers, but they apparently find themselves fighting for the same high-level employees as well. That was the case earlier this fall when L’Oréal sued Shiseido to keep a former senior vice president from starting work at the Japanese brand before the full period of his non-compete agreement had run out. L’Oréal argued that the former executive’s knowledge if its business threatened a planned custom foundation rollout and a court quickly halted the executive’s work at Shiseido.   

What It Could Mean: The case has since been settled out of court, but the executive does not appear to have formerly started his position at Shiseido. Higher-level employees working in fashion and beauty should take note that courts tend to view reasonable non-competes, which are becoming more and more common, with clear terms as simple contracts worthy of enforcement.

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