While Christian Louboutin v. Yves Saint Laurent is firmly in the past, this year was still a rather significant one in terms of fashion-related lawsuits. From high fashion internship cases to discrimination suits filed against fast fashion retailers, some of the industry’s biggest names have been in and out of court all year long. Here is a look at the top 10 biggest fashion industry lawsuits of the year …
The Unpaid Internship Lawsuits
2015 saw a number of unpaid internship lawsuits and the further disruption of traditional, aspired-to fashion internship programs. The claims filed by each of the former fashion interns are nearly identical: the fashion company systematically misclassified entry-level employees as interns to avoid paying them minimum wage. The former intern argues she performed the same work as a "full time-employee" without pay. Each plaintiff only worked for a few months, measured in sync with an academic semester (January to April, June to August or August to December), and logged an average of 20 hours a week.
Mary-Kate and Ashley Olsen’s The Row is the latest fashion company to be targeted by the two New York-based law firms, Leeds Brown Law, P.C. and Virginia & Ambinder, LLP, the ringleaders of this litigation movement. These same firms are responsible for nearly identical, boiler-plate pending lawsuits filed in 2014 against Burberry, Gucci, Calvin Klein, Marc Jacobs, Oscar de la Renta, Coach, Elie Tahari, Tory Burch and Donna Karan, among others.
In 2015 alone, lawsuits were filed against Zac Posen and Lacoste (by way of its licensee, Devanlay, Inc.), Alice & Olivia, Derek Lam, Nanette Lepore, Ralph Lauren, Georgio Armani, Kenneth Cole, Dolce & Gabbana, Alexander Wang, Puig, Perry Ellis Menswear, Bergdorf Goodman, Nicole Miller, People’s Revolution, and Karla Otto.
The Lawsuit Nike Filed Against Those Three Employees who Jumped Ship to Adidas
Last December, Nike filed a $10 million lawsuit against three of its former senior shoe designers, accusing them of stealing its trade secrets and joining rival, Adidas. Specifically, the Oregon-based sportswear giant alleged that former Nike employees, Denis Dekovic, Marc Dolce and Mark Miner violated their non-compete agreements by stealing years worth of trade secret information (think: confidential design and business documents, including drawings for unreleased shoes made for one of Nike’s sponsored athletes) and taking that info to Adidas where they are setting up a copycat of Nike's design studio.
The defendant design team counterclaimed against Nike for creating a distrustful company culture. This environment caused them to seek employment elsewhere; hacking their phones, emails and social media accounts; and filing this "meritless" lawsuit purely as a "publicity stunt." In June 2015, the case was settled out of court. According to a statement released by the designers’ counsel, "The case was resolved through a confidential settlement.” The settlement comes on the eve of a deposition of Nike chief executive Mark Parker, which Nike’s counsel fought, contending that the request amounted to harassment.
The Nasty Gal Discrimination Lawsuits
Nasty Gal, the Los Angeles-based fast fashion retailer, hailed for its swift rise to financial success and known for its line-for-line copies of runway looks, is also becoming known for being “a horrible place to work for professional women.” Following reports of financial woes in 2015, a number of former employees filed lawsuits against the company and its self-proclaimed “Girl Boss” founder, Sofia Amoruso, suggesting that things are not going so well behind the scenes.
Nasty Gal is currently facing three separate lawsuits in connection with its alleged practice of discriminating against employees of the basis of sex and pregnancy. In short: Nasty Gal allegedly discriminated against and wrongfully terminated at least three employees because of their gender and the fact that they were pregnant. (These cases are scheduled for arbitration in 2016). And in case that’s not enough, the company was recently sued for discriminating against another female employee based on a mental or physical disability, in violation of both federal and California state law. Just as The Fashion Law predicted, this case is also being sorted out by way of arbitration.
The Forever 21 Transgender Discrimination Lawsuit
Alexia Daskalakis, a former visual merchandiser for Forever 21 filed a lawsuit in New York Federal Court, alleging that the fast fashion giant subjected her to discrimination and harassment because of her transgender identity. Daskalakis, who joined Forever 21 in a Brooklyn store in May 2011 and was quickly promoted to visual merchandiser, began her transition in January 2014. According to her lawsuit, Daskalakis says she began dressing in a more traditionally feminine manner, wearing makeup and by August 2014, taking hormones.
As a result, Daskalakis says her immediate supervisor, Patrick Walmsley, among other management-level employees, began treating her with “increasing contempt." She claims her supervisors called her a “hot mess,” "useless," and “disgusting,” told her that she looked “offensive,” and that “in my eyes and in the company’s eyes, you’re still a male.”
Abercrombie's Off-Brand Job Applicant Lawsuit
Samantha Elauf filed suit against Abercrombie & Fitch after she was denied a sales job in 2008 at an Abercrombie Kids store in Tulsa, Oklahoma. Apparently, Ms. Elauf’s black headscarf was not in compliance with the fashion retailer’s “Look Policy.” After the case made its rounds in the lower courts, the Supreme Court opted to weigh in on the matter. In June, the Supreme Court found that Abercrombie violated workplace discrimination law when it failed to hire Elauf.
Abercrombie’s primary argument was that an applicant cannot show disparate treatment without first showing that an employer has “actual knowledge” of the applicant’s need for an accommodation. The majority countered, asserting that a plaintiff needed only to show that her requirement for an accommodation was a motivating factor in the employer’s decision not to hire her.
The Ongoing Lawsuit Between John Galliano and Christian Dior
While not filed in 2015, the lawsuit that John Galliano filed against his former employer, Christian Dior, made some headway this year. You may recall that in August 2013, Maison Margiela creative director John Galliano filed a lawsuit against both Christian Dior and his eponymous label, stemming from his drunken tirade and ultimate firing back in 2011. Galliano’s key claim: Wrongful termination in connection with his contracts. At the end of last year, Galliano lost that lawsuit. He was not only not granted any of the $18 million in damages he was seeking, he was ordered to pay both Christian Dior and John Galliano a symbolic €1 each.
While there was initially no talk of an appeal after Galliano’s claims were rejected by the Paris labor court, he has, in fact, appealed the court’s decision. Chantal Giraud-van Gaver of Coblence & Associés, who is representing Galliano, told WWD: "Given the deadlines for the Paris Court of Appeals, the case should be heard in 2017." The appeal will likely center on Giraud-van Gaver's argument that Galliano's dismissal from Dior and his eponymous label (the latter of which Galliano owns 91%) should be considered null and void because it was based on a preexisting medical condition.
The Second Time Jeremy Scott Got Sued for Copying
Well known graffiti artist Rime is suing Jeremy Scott, creative director of Moschino, and the Italian design house, for putting his art on clothes without consent. This case is playing out in the U.S. District Court for the Central District of California. According to Rime’s complaint, which was filed in the U.S. District Court for the Central District of California in August, “Defendants Moschino and Jeremy Scott – two household names in high-fashion – inexplicably placed Rime’s art on their highest-profile apparel without his knowledge or consent.”
In a riveting delivery of the summons and complaint, Scott was served at his own movie premiere. According to Rime’s counsel, Jeff Gluck: "Jeremy Scott was given the past month to agree to voluntarily accept service, which did not happen. We were left with no other choice but to hire a process server to locate him and serve him with the lawsuit."
Moschino and Scott have responded to Rime’s complaint, citing an array of defenses and seeking to have the lawsuit dismissed.
The Fast Fashion Retailers Battle
In maybe the most ironic lawsuit of the year, notorious copycat H&M is suing Forever 21 for copying its canvas “Beach Please” tote bag.
H&M, which filed suit in September, alleges that Forever 21 began selling a nearly exact version of the bag – knowing that H&M was offering its own "Beach Please" bag. H&M further alleges that unless the court orders Forever 21 to stop selling the bag, the confusion and/or association that Forever 21 is creating by selling the lookalike bag will cause irreparable injury to H&M and its reputation. Apparently, H&M has a reputation that is: 1) worth protecting and 2) somehow more valuable than Forever 21’s. Beach, please.
The Luxury Conglomerate vs. the Chinese e-Commerce Giant - Part II
In 2014, Alibaba Group Holding Ltd., China’s biggest e-commerce company, teamed up with with Kering SA to fight the sale of fake products after the parent company of Gucci withdrew a lawsuit that alleged Alibaba participated in violating trademarks. This partnership quickly deteriorated, and Kering has no plans to back down in the fight against Alibaba Group Holding Ltd for promoting the sale of counterfeit goods.
In November, Gucci, Yves Saint Laurent and other luxury brands owned by Kering SA announced their direction toward mediation, backing away from a threat to withdraw from the process after Alibaba founder Jack Ma said that he would rather lose the case than settle. The brands owned by Paris-based Kering SA, which also include Balenciaga and Bottega Veneta, had accused the world's largest online retailer of trademark infringement for letting 31 companies sell knockoff goods, damaging their sales and reputation. One example cited in the lawsuit was a bogus "high quality leather" tote bag offered for $2 to $5 that resembled a real Gucci bag costing $795. The lawsuit sought a halt to counterfeit sales, plus triple and punitive damages.
In related Kering news, a U.S. judge has held Bank of China Ltd. in contempt earlier this month for refusing to turn over account information of Chinese entities accused of selling counterfeit luxury goods, and now is imposing a $50,000 daily fine until the bank turns over the required information.
The Lawsuits Surrounding Trademark Infringement in China
A string of legal developments this year suggest that the major revision to the existing trademark laws in China could be working in favor of non-Chinese brand owners.
You may recall that the designers behind Italy-based design house DSQUARED2 were involved in a fairly lengthy legal battle (and technically, still are), after they were denied the right to operate in China, as Nuohe (a China-based business) had already trademarked the DSQUARED2 name. NYC-based Phillip Lim has experienced similar problems, as well, forcing him to adopt a China-specific trademark because someone else beat him to registering his name in China – there is legal action pending in that case, too. Last year, China revamped its trademark laws, aiming to prevent such illegitimate trademark registrations, which have become an overwhelming issue for foreign brands doing business in China.
The major changes to the existing trademark laws in China include: an increase in the level of damages the court may provide for trademark holders’ whose marks have been infringed (the limited is now $480,000 per infringement, six times more than the current maximum), procedures to reduce bad faith filing, a quicker turnaround time for trademark applications (the China Trademark Office will complete its examination of an application within nine months), stricter standards against the unauthorized use of “well known” marks, such as Costume National. The revisions are proving to be positive for designers and design houses, many of which have been subject to extensive trademark infringement schemes. Italian fashion company E.C. SpA, which holds rights in the Costume National brand, has won five lawsuits against two different Chinese companies stemming from their unauthorized use of C’N’C Costume National's intellectual property.
Costume National is not the only brand reaping the benefits, though. In November, luxury outerwear maker Moncler announced it had won a legal battle against a Chinese company that produced and sold down jackets with the Italian group's logo. Moncler, whose jackets can sell for up to $2,000, said it had been awarded 420,000 euros in damages by an intellectual property court in Beijing. "This is ... believed to be the first judgment under China's new trademark law to grant maximum statutory damages," the company said in a statement.
COURTNEY SOLIDAY is a University of Florida graduate. She received her J.D. from Cardozo Law School in New York.
