Two major retailers — Saks Fifth Avenue and Nordstrom, Inc. — have recently experienced firsthand the pricey consequences of defending allegations of wage and hour violations at the state and federal level.
Labor & Employment
Arent Fox has substantial experience advising its fashion and luxury goods clients in all aspects of labor and employment counseling and litigation. We are regularly called upon to review and audit our clients’ existing policies, procedures and practices to help reduce potential exposure. We train retail managers and rank and file employees on compliance with labor and employment laws. We advise retailers on complex human resources issues like wage and hour matters, dealing with ill and injured employees, discipline and termination decisions, investigation of internal discrimination and harassment complaints, and uniforms and clothing allowances. Our attorneys negotiate and draft executive employment and separation agreements as well as nondisclosure, nonsolicitation and noncompetition agreements. When disputes develop, we defend our clients in arbitrations, in claims before federal and state administrative agencies like the Equal Employment Opportunity Commission and the US Department of Labor, and in federal and state courts across the country. We also represent our fashion and luxury goods clients in lawsuits against former employees and competitors for misappropriation of trade secrets, enforcement of restrictive covenants and other claims involving unfair competition.
Two pending changes in the areas of federal overtime exemptions and minimum wage proposed by the Obama Administration could have a significant effect on the way retailers and other businesses classify and pay employees.
In January 2013, Kelle Azzopardi, a former Giorgio Armani Corp. executive assistant, sued the Italian fashion company in New York State Court, alleging she had been sexually harassed by a female Armani executive, Laura Giulini, and fired in retaliation for complaining about it. In that lawsuit, Azzopardi said she was let go after reporting to the company’s human resources department that she was “incessantly verbally and sexually” harassed by Giulini, who also allegedly exposed herself to Azzopardi.
On January 9, 2014, the U.S. District Court for the Southern District of New York preliminarily approved a settlement between Elite Model Management Corporation (Elite) and a proposed class of unpaid interns who worked for Elite during Fashion Week. Davenport v. Elite Model Management Corp. No. 1:13-cv-01061-AJN (S.D.N.Y. Jan. 9, 2014). The group of interns will be paid $450,000.
As experienced members of the fashion industry can attest, trade matters such as duties and taxes, and other regulations can have a huge impact on global sales and sourcing decisions. In an effort to resolve differences over trade practices and increase the already $1 trillion in annual trade, the United States and the European Union (EU) conducted free-trade agreement talks under the Trans-Atlantic Trade and Investment Partnership (TTIP) from July 9 to July 13, 2013 in Washington, DC.
On April 19, 2013 the National Labor Relations Board (NLRB) held that the Bettie Page clothing company unlawfully fired employees who used Facebook to discuss complaints about their supervisor’s conduct and other work-related concerns, rejecting the employer’s claim it was tricked into firing the workers. Design Tech. Grp. LLC d/b/a Bettie Page Clothing, 359 NLRB No. 96 (April 19, 2013).
In a recent case in New York, J. Crew Group, Inc. sued one of its former designers, Dwight Fenton, for breaching its duty of confidentiality, unfair competition and misappropriation, alleging that, when he left the company to work for a direct competitor, he took with him trade secrets and other confidential business information for use at his new job.
In a recent decision, the US District Court for the Southern District of Ohio rejected ADA claims against JPMorgan Chase, finding that the company had reasonably accommodated the plaintiff during an extended period that included both intermittent and continuous FMLA leave. Johnson v. JPMorgan Chase & Co. No. 2:11-cv-00373-EAS-EPD (S.D. Ohio, February 6, 2013).
ABOUT ARENT FOX LLP
Arent Fox LLP, founded in 1942, is internationally recognized in core practice areas where business and government intersect. With more than 350 lawyers, the firm provides strategic legal counsel and multidisciplinary solutions to clients that range from Fortune 500 corporations to trade associations. The firm has offices in Los Angeles, New York, San Francisco, and Washington, DC.