Scott+Scott Attorneys at Law LLP announced today that L Brands, Inc. (“L Brands”) will commit $90 million to diversity, equity, and inclusion (“DEI”) initiatives as part of a groundbreaking settlement with shareholders. The settlement agreement includes wide-ranging policy reforms such as the maintenance of a DEI Council, the strengthening of policies and procedures for reporting and investigating sexual harassment complaints, and the hiring of a DEI expert and consultant.
The settlement resolves a shareholder derivative lawsuit filed last year against L Brands, Les Wexner, and Edward Razek by global law firm Scott+Scott Attorneys at Law LLP (“Scott + Scott”). Scott+Scott represents L Brands shareholders Milton Rudi and the Detroit Police and Fire Retirement System in the action. The case – Rudi v. Wexner, Case No. 2:20-cv-3068 – is pending before District Judge Michael H. Watson in the United States District Court for the Southern District of Ohio. The settlement also resolves a shareholder derivative case filed earlier this year in the Delaware Court of Chancery (Lambrecht v. Wexner, C.A. No. 2021-0029-JTL), along with books and records demands made by certain shareholders.
“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, Partner at Scott+Scott Attorneys at Law LLP, the lead lawyer in the Ohio action. “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.”
Under the terms of the Settlement, L Brands will implement and maintain management and governance measures throughout L Brands, including:
- supplementing the existing Code of Conduct with standalone policies on sexual harassment, harassment and discrimination reporting, and anti-retaliation;
- strengthening the process for reporting and investigating claims of sexual harassment, gender discrimination, and retaliation;
- maintaining a DEI Council and retaining a DEI consultant to oversee the reforms;
- adopting a set of DEI Principles that will foster a diverse and inclusive workplace culture;
- collecting and evaluating data related to harassment and retaliation and the DEI principles;
- bringing the company’s policy on nondisclosure agreements into conformity with New York law and ending the use of mandatory arbitration provisions for disputes involving harassment, gender discrimination, and retaliation.
Following the planned August 2, 2021 spin-off of Victoria’s Secret & Co., the settlement terms will apply to both L Brands (to be renamed Bath & Body Works, Inc.) and Victoria’s Secret & Co., with each company committing to invest $45 million over at least five years to fund the management and governance measures.
About Scott+Scott Attorneys at Law LLP
Scott+Scott has significant experience in prosecuting major shareholder derivative, securities, antitrust, and employee retirement plan actions throughout the United States. The firm represents pension funds, foundations, individuals, and other entities worldwide with offices in New York, London, Amsterdam, Connecticut, Virginia, California, and Ohio.
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