Fast-fashion retailer Zara USA Inc. is facing a $40 million lawsuit alleging discriminatory work practices creating a hostile work environment.
The lawsuit was filed on Wednesday by Ian Jack Miller, former general counsel, in a New York state court in Manhattan. Zara is owned by Inditex. In addition to Zara USA, also named as defendants were Dilip Patel and Moises Costas Rodriguez. Patel is the country manager for the U.S. Rodriguez is the former chief executive officer of Zara USA Inc., and is the current director of expansion for North and South America for Zara USA.
The lawsuit, which alleged nine causes of action, based the claims on racial discrimination, in particular anti-Semitism. It is also alleging pay discrimination and retaliation. The alleged charges are claimed to be in violation of New York State and New York City Human Rights laws, as well as retaliation under New York labor law. While all three defendants were named, not all were subject to the same causes of action.
A spokesman for Zara USA said, “Zara USA is a diverse and multicultural company that is part of a worldwide organization that has more than 140,000 employees of different nationalities, cultures, languages and beliefs across 88 countries. We have a strong social commitment based on fairness, respect and equality for all. In keeping with our global success, we work hard to create exciting and rewarding work environments for each of our employees.”
The spokesman, who said the company has not yet seen the lawsuit, described the allegations as “shocking” and said the company would respond “strongly and vigorously” to the claims in court. He also emphasized, “We do not tolerate any behavior that is discriminatory or disrespectful, but value each individual’s contributions to our dynamic organization.”
According to court papers, “Zara cultivates a worldly and cosmopolitan image, but the company is notorious for selling products featuring racist and anti-Semitic images and messages, including handbags depicting swastikas, children’s pajamas resembling concentration camp uniforms…and a T-shirt proclaiming that ‘white is the new black.’”
The lawsuit also charged that Zara “favors employees who, like the company’s founder and majority shareholder Amancio Ortega Gaona, are straight, Spanish and Christian.” The court document said that Miller worked as the company’s general counsel from January 2008 until March 2015, and that he was subject to a hostile work environment — Miller is Jewish, American and gay.
Miller charged in the lawsuit, “Zara’s senior executives, including several close confidants of Zara’s founder Amancio Ortega, treated each characteristic as a strike against Mr. Miller. Supervisors and colleagues sent Mr. Miller homophobic emails, made anti-Semitic remarks in his presence and boasted that Spanish employees enjoyed more job security than employees of other nationalities.” He also said that executives promoted heterosexuality as the company’s preferred sexual orientation, including talk about sexual relations with female subordinates, prostitutes and criticism of transgender individuals.
The court document also claimed that Zara’s discrimination against Miller “intensified” after May 2013 when senior executives learned that Miller is Jewish. It also charged that “Spanish employees are subject to relaxed performance expectations compared to their American counterparts,” and included an example of how one individual who is Spanish was given a “37 percent raise,” while Miller “only received a 3 percent increase in his salary.”
Miller claimed he was unlawfully discharged from his job on March 5.