July 30, 2021
WHAT TO KNOW:
- Parent company L Brand agrees to corporate reforms
- Lawsuit alleged culture of harassment and misogyny
L Brands Inc., the parent company of Victoria’s Secret, agreed to spend $90 million on changes to corporate practices, including eliminating non-disclosure agreements, as part of a settlement to end shareholder lawsuits that alleged a toxic culture of sexual harassment and misogyny.
The deal, which is pending approval by the U.S. District Court for the Southern District of Ohio, resolves lawsuits filed by shareholders in 2020, following an expose in the New York Times that highlighted allegations of sexual harassment, including against top executives Leslie Wexner and Edward Razek, as well as photographers.
This is the latest in shareholder lawsuits taking aim at harassment and discrimination at major companies, following a $310 million settlement with Alphabet Inc.’s board of directors and another $90 million settlement with Wynn Resorts Ltd. Another similar case is ongoing against Pinterest Inc.
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Epstein Ties
The allegations included claims that L Brands’ officers and directors breached their fiduciary duties by maintaining ties with alleged sex offender and pedophile Jeffrey Epstein, who died in prison. Many of the top executives, including Wexner, have since resigned.
The settlement also ends separate lawsuits requesting records from L Brand executives and the company.
L Brands announced the agreement to investors on Friday, but a company representative didn’t immediately respond to a request for comment. The company will also update its policies on sexual harassment and retaliation to increase training and oversight of outside contractors. The company will also continue to invest in its Diversity Equity and Inclusion Council.
The settlement terms will apply to both Bath & Body Works Inc. and Victoria’s Secret & Co. Each company has committed to invest $45 million over at least five years to fund policy changes. The shareholders included individuals, but also the state of Oregon and the Oregon Public Employees Retirement Fund.
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The prohibition on the use of non-disclosure agreements, which has been seen as a tool to suppress harassment allegations, will release any current and former employees who signed the pacts.
The shareholders were represented by a group of lawyers led by Quinn Emanuel Urquhart & Sullivan, Scott+Scott Attorneys at Law LLP, and Cohen Milstein Sellers & Toll PLLC.
Read L Brands to Pay $90 Million to End Shareholder #MeToo Suits.