Industry watchdog The Fashion Law reports that Louis Vuitton, Fendi, Loro Piana, Gucci, Prada, Brunello Cucinelli, and Saks Fifth Avenue are named in a proposed class-action lawsuit by three former Saks Fifth Avenue employees.
The proposed lawsuit cites violations of the Sherman Antitrust Act, a federal statute from 1890 prohibiting activities that restrict interstate commerce and competition in the marketplace, and accuses the brands of engaging in an "illegal conspiracy" to "suppress the total compensation of their employees."
The former Saks Luxury employees claim that if they were to seek employment with one of the luxury brands named in the lawsuit, the brand would require that they "resign from Saks and wait six months before [it would] be allowed to hire the Luxury Retail Employee." As a result of these alleged agreements, the plaintiffs claim they were prevented from advancing their careers.
The plaintiffs then assert that these alleged practices not only stand in the way of "a properly functioning and lawfully competitive labor market," but that they are helping to fix the wages earned by employees "at artificially low levels."
The Fashion Law explains this is because even just the threat of lateral hiring by competing companies "forces employers to reactively increase compensation," "enhance the terms of [their] commission agreements," and/or "matching [any other] compensation terms" in order to retain employees that are likely to join a competitor.
The three plaintiffs are currently seeking certification of their class action to allow others in similar situations — potentially “all persons in the United States employed by at least one of Defendants at any time from September 30, 2015 until the effects of the defendants’ conduct ceases" — to join the lawsuit and any ultimate settlement (if there is one), while also seeking a jury trial and monetary damages.
Read the full report over at The Fashion Law.