Settlement resolves shareholder lawsuit regarding sexual harassment, misogynistic corporate culture, and hostile work environment at Victoria’s Secret

A $90 million global settlement of shareholder claims brought against multichain specialty retailer L Brands, owner of Victoria’s Secret, Bath & Body Works and Pink, was preliminary approved by the Honorable Michael H. Watson of the United States District Court of the Southern District of Ohio on August 25, 2021.

Bernstein Liebhard brought a Delaware General Corporate Law Section 220 books and records action against L Brands, entitled John Giarratano v. L Brands, Inc., Case No. 2020-0437-JRS (Del. Ch.).  The action was led by Partner Stanley D. Bernstein and the complaint alleged that a “culture of sexual harassment and misogyny” had “plagued the company and Victoria’s Secret for decades.”  One month before trial, L Brands agreed to produce documents in response to the firm’s books and records request. Global settlement negotiations of all actions followed, resulting in the $90 million settlement.

As part of the settlement, L Brands has agreed to completely revamp the existing policies and procedures relating to sexual harassment, retaliation, and reporting, and to take a number of steps to ensure that those policies are actually working, including through an annual audit and surveys of employees and models. Moreover, the Company will provide $90 million to fund its reform and governance measures, which will promote diversity, equity, and inclusion (“DEI”) and use data metrics to ensure that those goals are being met.  Key reforms include:

  • 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.

A final settlement hearing has been scheduled for January 18, 2022.  A full copy of the Settlement Agreement is available here; the Preliminary Approval Order is available here.

Bernstein Liebhard collaborated with Quinn Emanuel Urquhart & Sullivan LLP, Cohen Milstein Sellers & Toll PLLC, Bernstein Litowitz Berger & Grossmann LLP, deLeeuw Law LLC, Greenfield & Goodman, LLC, Smith Katzenstein & Jenkins LLP, and Scott & Scott to achieve this unprecedented settlement.

Since 1993, Bernstein Liebhard LLP has recovered over $4 billion for its clients. In addition to representing individual investors, the firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for eleven consecutive years.

ATTORNEY ADVERTISING. © 2021 Bernstein Liebhard LLP. The law firm responsible for this advertisement is Bernstein Liebhard LLP, 10 East 40th Street, New York, New York 10016, (212) 779-1414. The lawyer responsible for this advertisement in the State of Connecticut is Michael S. Bigin. Prior results do not guarantee or predict a similar outcome with respect to any future matter.