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Volume XI, Number 261

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L Brands Settles Derivative Suits

On July 30, 2021, L Brands, the parent company behind Victoria’s Secret and Bath & Body Works, settled a rash of derivatives actions which had alleged “toxic” workplace conditions and “a culture of misogyny” at the company.  We previously detailed the allegations in this space as part of our ongoing review of shareholder attempts to hold companies liable for perceived diversity failures and workplace discrimination.  As we noted, a New York Times report detailing specific allegations of a former Chief Marketing Officer led to the filing of shareholder actions across the country, including in Ohio, Oregon, and Delaware.

Last week’s settlement agreement occurred simultaneously this week with the separation of the two companies.  Both entities agreed to separate $45 million payments to the various plaintiffs, as well as five-year workplace and corporate culture reforms. Notably, those reforms include maintenance of a diversity council and an adjustment of corporate value statements to explicitly include diversity and equity.

The combined $90 million sum and the now separate companies’ corporate reforms suggest that the recent movement to assert shareholder derivative actions related to workplace conditions has gained at least some traction.  It remains to be seen, however, whether the egregiousness of the facts in the L Brands case will cause it to be an outlier amongst the crowd of companies facing similar actions.  Check back here for continued coverage.

© 2021 Proskauer Rose LLP. National Law Review, Volume XI, Number 216
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About this Author

Joseph S. Hartunian Litigation Attorney Proskauer Law Firm
Associate

Joe Hartunian earned his J.D. from the University of Michigan Law School, where he was an executive editor of the Michigan Journal of Law Reform. While at Michigan, Joe worked as a legal intern for the U.S. Attorney’s Office for the Eastern District of New York.

Prior to law school, Joe served as a legislative aide for Senator Charles E. Schumer on the Senate Judiciary Committee, focusing on issues related to opioid abuse, telecommunications and gun safety. Upon graduation, he returned to the committee as an advisor to Senator Amy Klobuchar on the nomination of now-Justice...

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