Giarratano v. L Brands, Inc.
Attention: To all persons and entities who held L Brands, Inc. common stock as of July 29, 2021, please be advised that the final settlement hearing is presently scheduled for January 18, 2022 at 11:00 a.m. EST. Please continue to monitor the Court’s docket and Bath & Body Works’ and Victoria’s Secret’s respective investor relations websites at: https://www.bbwinc.com/investors and https://www.victoriassecretandco.com/investors, before making any plans to attend the settlement hearing. Please also refer to the Notice of Pendency and Proposed Settlement of Derivative Actions, which can be accessed here.
Bernstein Liebhard announces 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.
The firm represented an individual shareholder in 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.
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.