Non-compete battles are becoming increasingly commonplace in fashion. On the heels of relatively recent disputes between Hedi Slimane and Kering, and Carolina Herrera and Oscar de la Renta, cosmetics rivals L’Oréal and Shiseido are set to face off over a rogue executive.
Meanwhile, while there is much to be made of the legality (or lack thereof) of influencer marketing in the U.S., the British equivalent of the Federal Trade Commission is putting its foot down when it comes to influencers. And in a particularly timely matter, New York State may adopt new legislation to help protect models from sexual harassment.
To Compete or Not to Compete
It has been a little while since a good non-compete lawsuit rocked the fashion industry, after a flurry of suits came about over the past few years involving Nike and Adidas, Louis Vuitton and Coach, Hedi Slimane and Kering, and most recently, Carolina Herrera and Oscar de la Renta — over designer and now de la Renta co-creative directors Laura Kim and Fernando Garcia.
This time around, L’Oréal USA Inc. is accusing rival Shiseido Co. Ltd. of poaching one of its senior vice presidents, and thereby, attempting to utilize “L’Oréal’s trade secrets and confidential information.”
According to L’Oréal’s lawsuit, which was filed in federal court in New York this week, the cosmetics giant parted ways with Antonios Spiliotopoulos, its senior vice president of consumer products for the Americas, in June. As part of his initial contract with L’Oréal, Spiliotopoulos allegedly agreed to wait six months before he began work for a competitor — as is customary in most executives’ contracts — which Spiliotopoulos allegedly breached when he began working for Shiseido earlier this month.
The increasing rate with which fashion figures — both on the creative and business sides — are jumping from job to job (likely due to the sped-up timetable upon which fashion is predicated at the present time) has given a new level of importance to the role of non-compete agreements, as companies attempt to hold on to their confidential information and the competitive advantage that can be derived from such information.
This is compiled with the already-important role that such agreements play in the fashion industry due to the lack of effective and/or affordable protections available for garment designs in the U.S. Because copyright law tends to only provide minimal protection for useful items, such as garments and accessories, some brands have looked to alternative protections, such as non-compete agreements and trade secret law, to safeguard some of their assets in light of the increasingly frequent turnovers.
While the case at hand centers on cosmetics — for which there tends to be significant protections in the form of patents — it seems that L’Oréal, like fashion brands, is not immune to the desire to protect some of its other valuable assets, including marketing strategies, for instance, which an exiting employee could easily take with him or her.
While the Federal Trade Commission has been sending signals over the past several months that neither fashion brands, nor influencers are safe if they opt to flout federal truth in advertising guidelines, the British equivalent, the Advertising Standards Authority (ASA), is busy taking on influencers, as well. In two decisions released this week, the ASA held that “Geordie Shore” and “Celebrity Big Brother” cast member Marnie Simpson ran afoul of the U.K. Code of Non-broadcast Advertising, Sales Promotion and Direct Marketing for posting commercial messages on Snapchat without including disclosure language.
The advertising watchdog held that Simpson’s posts for Diamond Whites and I Spy Eyes run afoul of its advertising rules, as they both amount to marketing communications that went undisclosed as such. The ASA stated that in accordance with its advertising code, “We do not just require ads to be identifiable as marketing communications, but that they must be obviously identifiable as such.”
As a result, the ASA held that “the ads must not appear again in its current form. We welcomed Diamond Whites’ and I Spy Eyes’ willingness to ensure they will use “#ad” in future. We reiterated their responsibility to ensure that all of the ads they produced were obviously identifiable as marketing communications in future.”
In short: British brands and influencers, and non-Brits, who are advertising in the country, alike, need to add an #ad.
In Vogue? Legislation to Protect Models
In light of widespread discussion across industries about the frequency with which women – and in some cases men – have been subjected to sexual harassment, New York Assemblywoman Nily Rozic introduced legislation that, if passed, would provide models with protections against sexual and other forms of harassment while on the job.
In particular, the bill, referred to as the “Models’ Harassment Protection Act,” aims to ensure that models are protected by state law and regulations and not merely categorized as independent contractors, as opposed to employees, and thus, exempt from state sexual harassment laws that protect employees.
As Rozic’s proposal — which follows months of coordination with the Model Alliance, a New York-based research and policy organization that advocates for labor rights for models and other workers in the fashion industry — states, “The inconsistencies in classification in addition to the way modeling agencies have been able to skirt around state law and regulations have cultivated a workplace environment that lacks accountability.”
“If there is anything we are learning from over the past few weeks it is that we have reached a turning point on whether to accept sexual harassment as a norm, or end the cycle by enacting protections and providing a path of recourse,” said Rozic on Monday. “No one should ever experience sexual harassment in or outside of the workplace.”
The bill will be voted on in 2018, during the next legislative session.
Julie Zerbo is the founder of The Fashion Law.