Fortune 500 company L Brands, which owns Victoria’s Secret and Bath & Body Works, has agreed to settle shareholder so-called ‘derivative claims’ and lawsuits that allege workplace misconduct, including bullying and sexual harassment.
The settlement will see L Brands roll out a suite of new corporate government and management measures and commit to “fostering a safe, equitable and inclusive workplace”.
In addition, L Brands has announced it will spin out its two main brands into two separate companies later this week and each will spend $45 million over the next five years on implementing these new policies, which include a new diversity, equity and inclusion council, and an overhaul of internal policies and training around discrimination.
The company has also said it will release all current and former employees from non-disclosure agreements (NDAs) tied to sexual harassment claims and has committed the company to no longer using NDAs for complaints of this nature.
L Brands’ sexist workplace culture first came to light after investigations into convicted sex offender Jeffrey Epstein in early 2019; L Brands’ CEO Les Wexner was found to have close ties with Epstein.
Then in February 2020, new allegations of sexual misconduct at the company, particularly surrounding the harassment of female models and executives at Victoria’s Secret, which led to two lawsuits filed by stockholders and shareholders of the company.
The lawsuits allege, according to the New York Times, that officers and directors at the companies fostered a workplace culture of misogyny and sexism.
The suits specifically name Wexner and former chief marketing officer Ed Razek, who retired in 2019; L Brands’ settlement will release them from litigation, according to the New York Post.
As a result, L Brands set up a special committee in 2020, which was led by two female independent board members and overseen by a new law firm not previously linked with L Brands.
Talking about the settlement, newly instated board chair Sarah Nash commented: “This global resolution, with its commitment to industry-leading governance policies, is an overwhelmingly positive result for the Company and its stockholders.
“It further prepares both Bath & Body Works and Victoria’s Secret for success as independent public companies with strong management teams and boards of directors committed to principles of diversity, equity and inclusion.”
Wexner also stepped down as CEO and away from the company as a whole earlier this year. L Brands and Bath & Body Works CEO Andrew Meslow said:
“As L Brands prepares to separate into two independent public companies, we are proud to implement these governance policies to ensure a workplace where all employees feel safe and supported and that their voices are heard.”
These so-called ‘derivative actions’ were settled on Friday, and now require court approval in both Delaware and Ohio where the suits are filed.
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