WWD Law Review

Brand rivalry, racial divides and alleged disability discrimination took center stage this week, as fashion brands came under fire by way of a number of newly initiated and hard-hitting lawsuits. Versace has been accused of perpetuating widespread racial discrimination by way of a “secret code” to identify black shoppers. The brand has vehemently denied the allegations in a recent filing and is seeking dismissal of the matter.

Carolina Herrera and Oscar de la Renta continued their battle over a key designer, thereby revealing the bitter rivalries that exist between houses and the particular importance of non-compete provisions. Still yet, Intermix and Cole Haan are the latest to be accused of discriminating against visually impaired consumers, joining a significant number of fashion entities that have been hit with similar claims.

Versace Named in Racial Discrimination Lawsuit, Despite Fashion’s Push for Runway Diversity

The U.S. arm of Italian design house Versace has been named in a racial discrimination and harassment lawsuit in California state court, a legal matter that sheds light on the oft-imperfect state of race relations in the fashion industry. Christopher Sampino, a former employee at a Versace outlet store in California, alleges that he was discriminated against and fired for being “of mixed race.” Another particularly damning allegation set forth in Sampino’s complaint: “D410,” the code that is used to label black garments is also used by Versace employees “to alert coworkers that ‘a black person is in the store.’”

Sampino’s suit comes less than a year after Alexander McQueen was sued for a second time for alleged racial discrimination, namely for “systematically rejecting African-American job applicants who seek positions on the sales floor where they can be seen by customers or positions where they might have authority over white employees.”

Additional lawsuits containing race-based claims have been waged against Tiffany & Co., Louis Vuitton, Perry Ellis, Sephora and Zara in recent years. Racial profiling-centered lawsuits have also been initiated against Neiman Marcus, Macy’s, Victoria’s Secret and Barneys, among other retailers.

While diversity in terms of race is improving on magazine covers and on the runway – according to a recent report, the Spring/Summer 2017 runways were some of the most diverse in fashion’s history — such progress is not necessarily translating equally to the business/operations side of things. The consistent stream of race-based discrimination and harassment allegations, and the diminutive numbers of racially diverse creative directors at the helms of the industry’s most noteworthy brands, for example, seems indicative of a lingering deficiency that can prove legally problematic.

Carolina Herrera, Oscar de la Renta and the Importance of the Non-Compete Clause

Carolina Herrera made headlines last week after filing suit against fellow New York-based brand Oscar de la Renta and its cocreative director, Laura Kim, in an attempt to keep Kim from working for the rival brand in violation of her non-compete agreement with Herrera.

Kim, who joined Carolina Herrera in October 2015, after completing a 12-year stint with Oscar de la Renta, was slated to take the reins from the brand’s 77-year-old founder, but instead, resigned in July. In September, Kim announced that she and her Monse design partner, Fernando Garcia, would join de la Renta as cocreative directors.

Since the initial filing, Herrera has already faced a setback. After claiming an early — and very temporary — victory by way of a preliminary injunction, the court overturned the decision, thereby enabling Kim to resume work at de la Renta ahead of the fall shows in February.

Given the ever-decreasing duration of the creative director tenure and the rapid turnover of creative directors and executives at the industry’s most celebrated brands, this case — along with the recent battle between Hedi Slimane and Kering over Slimane’s non-compete agreement with Yves Saint Laurent, for instance — is likely just one of a handful of similarly high-profile disputes to come.

Common contract provisions for upper-level employees, non-compete clauses enable brands to protect their valuable design and marketing strategies by preventing their top talent from beginning new employment with a competitor and taking such information with them, at least for a limited time period. Additionally, non-compete clauses will continue to prove crucial for brands given the relatively limited legal protection enjoyed by garments and accessories in the U.S. and the ease with which such designs can be recreated by others in a short amount of time.

Fashion Brands Continue to be Targeted for “Discriminatory” Websites

Cole Haan and retailer Intermix are the latest entities to be targeted in civil rights lawsuits, centering primarily on alleged violations of Title III of the Americans with Disabilities Act, which requires that individuals with disabilities be given “full and equal enjoyment of the goods services…or accommodations of any place of public accommodation.” According to the lawsuits at hand, which were filed by Andres Gomez, a visually impaired Miami, Florida resident, the ADA’s provisions apply to web sites.

With this in mind, Gomez alleges that the defendants “denied him from having full and equal access to their websites due to their failure to have screen reader software [specially designed for the visually impaired] on [the sites].” Cole Haan and Intermix join a long list of other brands and retailers — including H&M, Coach, Giorgio Armani, Gucci, Versace, Valentino, Bally, Hugo Boss, Louis Vuitton, Nike, and J. Crew, among others — which have been named in similar lawsuits over the past year or so.

Plaintiffs’ attorneys are becoming increasingly aggressive in filing ADA violation lawsuits against businesses that sell goods and services online, and the rise in litigation in this area, paired with an increase in website reviews by the Department of Justice, highlights a growing concern for companies with e-commerce capabilities.

Julie Zerbo is the founder of The Fashion Law.