Guess settles for $30 million over allegations of co-founder’s mistreatment of models.

Guess settles for $30 million over allegations of co-founder's mistreatment of models.

Guess? Board Agrees to $22 Million Settlement in Sexual Harassment Lawsuit

Guess? Board

In a move aimed at settling a pension fund’s lawsuit, fashion retailer Guess? has agreed to pay $22 million. The lawsuit alleged that the company’s directors allowed millionaire fashion designer Paul Marciano to treat the company’s models as his personal harem and failed to properly monitor his actions. Guess? is also suing its insurers for the remaining $8 million in the Delaware Chancery Court.

The settlement decision was made by the board members to eliminate the burden, expense, and uncertainties associated with further litigation. Although the board members are not admitting any wrongdoing under the agreement, the monetary settlement will go back into the company’s coffers rather than to the pension fund.

The allegations against Paul Marciano came to light during the rise of the #MeToo movement when a wave of women publicly accused high-powered executives in various industries of sexual impropriety. As the movement gained momentum, numerous individuals faced ousters and legal consequences for their actions.

Fabrice Benarouche, Guess?’s spokesperson in Los Angeles, did not immediately respond to a request for comment on the settlement. The Employees Retirement System of Rhode Island, a Guess? shareholder, filed a lawsuit against the directors in 2022 following a series of allegations against Marciano regarding inappropriate sexual behavior with models hired to represent the company.

In 2018, Kate Upton, a well-known model, took to Twitter (now known as X) to accuse Marciano of groping and forcibly kissing her when she was a teenager. Other models soon echoed Upton’s claims, leading Guess? directors to initiate an internal investigation. However, the directors failed to take the investigation seriously, neglecting to interview several accusers and producing a report that downplayed the seriousness of the allegations, as stated in the pension fund’s lawsuit.

Although Paul Marciano stepped down as CEO in 2015, he remained as the company’s chief creative officer. This position allegedly allowed him to continue exercising his influence over models hired by Guess? and engage in inappropriate behavior. The settlement agreement requires Guess? directors to implement changes to the company’s corporate governance policies to better address sexual harassment allegations.

The $22 million settlement is expected to be paid within 10 days of approval by Delaware Chancery Judge Lori Will. Concurrently with the settlement, Guess? co-founder Maurice Marciano, Paul’s brother, announced his resignation from the company’s board. The court filings acknowledge that the pension fund’s lawsuit played a role in Maurice Marciano’s decision to step down.

This settlement is not the first to arise from the sexual harassment allegations against Paul Marciano. In 2022, Guess? agreed to pay $1 million to resolve lawsuits filed by two unidentified models who accused the fashion designer of abusing them. The repeated legal challenges highlight the importance of addressing and remedying workplace misconduct within the fashion industry.

Ultimately, the resolution of this lawsuit against Guess? underscores the urgency for companies to prioritize creating safe and respectful work environments for their employees, regardless of industry. By implementing robust corporate governance policies and thoroughly investigating allegations of sexual harassment, companies can contribute to a culture of accountability and prevent further harm within their organizations.