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L Brands settles lawsuits that charged retailer with operating an abusive culture

Mark Williams, The Columbus Dispatch on

Published in News & Features

L Brands has settled lawsuits charging that its former Victoria's Secret brand operated with an abusive culture rife with sexual harassment.

The settlement comes on the eve of the company's two brands, Victoria's Secret and Bath & Body Works, splitting into two separate public companies that begin trading on Monday.

Under the settlement filed Friday in U.S. District Court in Columbus, L Brands says it has agreed to a suite of corporate governance and management measures, including maintaining a Diversity, Equity and Inclusion Council, strengthening of policies and procedures for reporting and investigating sexual harassment complaints, and the hiring of a diversity, equity and inclusion consultant.

L Brands says the measures will continue the reforms that it has been implementing over the past year, and they reflect its commitment to a safe, equitable and inclusive workplace.

Each brand has agreed to invest $45 million over at least five years to fund its governance policies. L Brands also has agreed to pay legal fees of $21 million, subject to court approval

"We are extremely proud of this settlement and believe that it is a game changer for Bath & Body Works and Victoria's Secret going forward," said Geoffrey Johnson, a lawyer for the law firm of Scott+Scott Attorneys in northeast Ohio and the lead firm in a lawsuit filed in Ohio. "The $90 million funding commitment is unprecedented for a company this size, and the settlement establishes significant workplace and corporate governance reforms intended to ensure that the conduct that gave rise to this action will not occur in the future."

 

"This global resolution, with its commitment to industry-leading governance policies, is an overwhelmingly positive result for the company and its stockholders," Sarah Nash, chairwoman of L Brands, said in a statement. "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."

Nash led a special committee of the company's board to investigate the allegations that were filed against the company last year. L Brands said the settlement marks a full resolution of the allegations and concludes the committee's work.

Lawsuits filed against L Brands, founder Leslie Wexner, the company's board and other executives lay out a pattern of sexual harassment that was ignored by company executives, primarily at Victoria's Secret.

One case, filed by Johnson on behalf of a shareholder from St. Louis, charged the company with operating a "hostile abusive environment rife with sexual harassment" that damaged Victoria's Secret and hurt its value at a time when L Brands was trying to sell the company.

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