A Pretty Split after an Ugly History

Gavel on Money

L Brands, the global business owner of Victoria’s Secret, Bath & Body Works, and PINK, announced a $90 million corporate governance reform agreement to settle multiple lawsuits seeking damages arising from “toxic” workplace conditions, including sexual harassment. They have agreed to invest a cumulative $90 million ($45 million from each) over the span of at least 5 yrs. into funding new diversity, equity, and inclusion initiatives and the creation of a DEI Advisory Councils.

These allegations were predominantly pointed towards Victoria’s Secret as its company’s executives have allowed a pattern of sexual harassment to exist while being willfully ignorant to the fact. A previous case filed on behalf of a shareholder from St. Louis, charged the company with operating a “hostile abusive environment rife with sexual harassment.” Shareholders further alleged by allowing this pattern of sexual misconduct, bullying and retaliation to go unaddressed, the board of directors has failed to act in the best interests of said stockholders.

Below are some key reforms found within the $90 million settlement:

  • A prohibition on the use of non-disclosure agreements (NDAs) and a release of current and former employees from their NDAs, as well as a prohibition on the use of forced arbitration of discrimination claims;
  • The establishment of DEI Councils focused on enhancing training, investing in diverse communities that are representative of the companies’ customers and employees, and auditing the effectiveness of those initiatives;
  • A complete revamp of the companies’ internal sexual harassment, discrimination and retaliation policies, procedures and training;
  • The separation of the roles of CEO and chair of the board of directors; and
  • The publication of annual reports to stockholders discussing the companies’ DEI objectives, progress in meeting those goals, and accompanying metrics.

These allegations, claims, and lawsuits are a combination of previous cases where models and other executives throughout Victoria’s Secret had experienced some sort of sexual harassment and/or assault/abuse by other male executives, former Chief Marketing Officer Ed Razek, founder Les Wexner, and late child-sex offender Jeffery Epstein. Founder Les Wexner’s laissez-faire approach to these complaints and his ties with Epstein further fueled this misogyny flame that swept this multinational business.  Victoria’s Secret alone had cultivated a culture of hyper-sexualization of the female body, while discriminating against those who did not fit their standard. The lawsuit further states allegations that L Brands’ officers and directors breached their fiduciary duties by maintaining ties with alleged sex offender and pedophile Jeffrey Epstein and fostering a culture of discrimination and misogyny at the company.

Cohen Milstein
Dispatch
Cohen Milstein

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