A lawsuit filed against Saks Fifth Avenue and other luxury brands alleges that the retailer engaged in unlawful “no-hire” pacts in conjunction with those labels to keep skilled retail workers from leaving the luxury retail chain.
Three former Saks salespeople, who are seeking class-action status for their claim, filed a complaint in New York’s Eastern District court on Friday, arguing that they missed out on opportunities elsewhere due to “no-poach” agreements between Saks and other luxury fashion brands such as Gucci, Louis Vuitton and Brunello Cucinelli USA Inc.
Gucci America Inc., Louis Vuitton USA Inc., Fendi North America Inc., Loro Piana & C. Inc., Prada USA Corp. and Brunello Cucinelli USA Inc. are all named as defendants, along with Saks, in the suit. The ex-Saks workers claim that, by decreasing worker competition, the illicit pacts reduced their earning potential.
In response to a request from FN, Saks declined to comment.
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One of the plaintiffs, Angelene Hayes, claims that she attempted to leave Saks for a better-paying post at Louis Vuitton in 2015. In response to an emailed inquiry from Hayes, Hope Frate, a Louis Vuitton store manager, wrote: “Unfortunately we have an agreement with Saks that we cannot take their employees and have to wait 6 months before hiring. We have strict guidelines we have to follow,” according to an attachment to the filing. In an email to FN, Louis Vuitton declined to comment on the matter.
Another plaintiff, Susan Giordano, alleges that she met a headhunter with luxury retail expertise in 2017 and was informed of positions she would be well-suited for at brands including Brunello Cucinelli and Louis Vuitton. However, the headhunter told Giordano that she could not be placed “unless she quit her current job at Saks and waited to seek work again in the industry,” according to the filing.
The plaintiffs are seeking injunctive relief and damages for violation of the Sherman Act, which prohibits anticompetitive conduct including bid-rigging, price-fixing and market-dividing.
In October 2016, the U.S. Department of Justice announced the intention to proceed criminally against naked no-poach and wage-fixing agreements, and it has remained consistent in its messaging since then. The Justice Department argues that no-hire pacts are “unlawful market allocation agreements” that prevent employees from being able to bargain for better job opportunities and terms of employment.
“Market participants are on notice: the Division intends to zealously enforce the antitrust laws in labor markets and aggressively pursue information on additional violations to identify and end anticompetitive no-poach agreements that harm employees and the economy,” reads a 2018 statement from the Justice Department.
FN has reached out to Gucci and Brunello Cucinelli for comment.
Editor’s Note: An earlier version of this story inaccurately suggested Saks Fifth Ave. was the only defendant in the aforementioned lawsuit. This story has been updated to list the other defendants in the claim.