A rash of recent lawsuits stemming from incidents at high-end designer boutiques has shined a spotlight on the growing need for companies to acquire business insurance to mitigate some of the heavy costs associated with litigation.
Among the companies named in the lawsuits are Barney’s New York, Macy’s and Alexander McQueen, with all incidents occurring within New York City’s downtown fashion and shopping districts.
Here is a brief breakdown of what the lawsuits entail:
Alexander McQueen
An employee filed suit against her former boss at an Alexander McQueen store after she alleged the individual harassed her constantly with offensive and discriminatory remarks about her race and ethnicity. After the employee communicated her feelings and concerns to management, the worker said her boss retaliated by falsifying sales records and accusing the employee of improper work behavior, according to the New York Post. Shortly thereafter, the worker was fired and subsequently filed a civil suit against the retailer.
Barney’s New York
According to Reuters, two African-American shoppers purchased items at the upscale retailer on separate occasions and after leaving the store, were followed, questioned and detained for a brief period of time. Both victims were later released without any arrests or charges filed. The company claims it did not racially profile the shoppers, nor did they request assistance from the authorities, but the police acted upon themselves. Statements made by police indicated that officers were handed over surveillance footage by the stores. Trayon Christian, an African-American student who purchased a $350 designer belt, pursued legal action against the retailer and is seeking a confidential settlement, as reported by the New York Post.
Macy’s
The former Marshall Fields mega-retailer found itself in similar circumstances when two other African-American consumers were detained by security after making expensive purchases in separate incidents, New York Daily News reported. Currently at least one new plaintiff is seeking class-action status, said the lawyer of an alleged fifth victim. The Reverend Al Sharpton made a public statement calling upon Macy’s to draft a written companywide plan that educates employees on how to prevent discrimination or a boycott would ensue. The retailer said it plans to comply with the request.
According to Reuters, in 2005 Macy’s had to pay out $600,000 in settlements for related offenses.
As these titans of the fashion and retail industry face mounting allegations and litigation, they could possibly incur excessive fines, attorney fees, possible defendant fees, settlements and numerous other potential payouts in addition to time and resources lost. Businesses that frequently find themselves thrust into the spotlight should especially be sure to acquire professional liability insurance that will help to cover expenses that come along with discrimination lawsuits.
