Class Action Alleges Saks Fifth Avenue Signed Illegal No-Poach Agreements with Luxury Retailers [DISMISSED]
by Erin Shaak
Last Updated on May 8, 2023
Giordano et al. v. Saks Incorporated et al.
Filed: February 14, 2020 ◆§ 1:20-cv-00833
Three former Saks Fifth Avenue employees claim in a proposed class action lawsuit that the retailer has unlawfully conspired with Louis Vuitton, Fendi, Loro Piana, Gucci, Prada, and Brunello Cucinelli to not hire each other's employees.
Case Updates
May 8, 2023 – Saks Fifth Avenue No-Poach Agreements Class Action Dismissed
The proposed class action lawsuit detailed on this page was dismissed by a federal judge on March 21, 2023.
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In a January 31 memo and order tossing the plaintiffs’ first amended complaint, United States District Judge Margo K. Brodie granted one plaintiff—whose claims were not entirely thrown out, as the other plaintiffs’ allegations were—30 days to file a second amended complaint.
Court records show that as of March 20, the plaintiff had not submitted a second amended complaint or requested an extension of time to do so. In light of this, Judge Brodie dismissed the individual’s claims, and the case was formally closed the next day.
According to the January 31 order, the claims of three of the four plaintiffs were thrown out because they fell outside the federal Sherman Act’s four-year statute of limitations period and were thus time-barred. The 49-page order states that although the remaining plaintiff’s allegations fell within the limitations period and sufficiently argued the existence of an anticompetitive agreement between the defendants, the claims did not adequately show that the companies’ conduct had an “adverse effect on competition as a whole in the relevant market.”
Court records indicate that the plaintiffs filed a notice of appeal of the dismissal on April 14, 2023.
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Update – April 13, 2020 – High-Fashion Defendants Hit with Another No-Poach Class Action
The defendants in the proposed class action lawsuit detailed on this page have been hit with an additional case over allegations that they unlawfully conspired to not hire each other’s luxury retail employees.
Filed in New York’s Eastern District, the latest lawsuit claims Saks, Louis Vuitton, Fendi, Gucci and a number of other fashion heavyweights entered into collusive “no-hire agreements” by which each company agreed to reduce employee mobility and thereby suppress workers’ wages to “levels materially lower than they would have been in a competitive market.” The suit alleges violations of the federal Sherman Antitrust Act.
The lawsuit can be found here.
Three former Saks Fifth Avenue employees claim in a proposed class action lawsuit that the retailer has unlawfully conspired with several luxury brands—including Louis Vuitton, Fendi, Loro Piana, Gucci, Prada, and Brunello Cucinelli—to not hire each other’s employees. According to the suit, the so-called “no-poach agreements” among the companies were intended to suppress wages by restricting competition among luxury retail employees.
The lawsuit begins by explaining that lateral hiring—when an employee is hired for a similar position at a competing company—is an essential part of a competitive labor market. In what the case describes as a “properly functioning market,” employers seek out from among their competitors potential employees who are already trained and accustomed to a particular job culture, while employees are effectively incentivized to accept positions at competing companies who offer higher wages, better benefits, or other career opportunities. The case argues that competition thusly benefits both luxury retailers such as the defendants and their employees by raising overall compensation levels and producing “satisfied employees who are good at their jobs.”
The lawsuit alleges, however, that Saks and the other retailer defendants have conspired to suppress competition by signing “no-hire agreements” that ban each company from hiring another’s employees for six months after a worker’s employment has ended. The plaintiffs, three women who worked for Saks, allege that the effects of these no-poach agreements are suppressed wages and reduced job opportunities for workers in the luxury retail sector, a significant portion of which is controlled by the defendants. The women claim they each pursued positions with at least one of the retail defendants—Louis Vuitton, Fendi, Loro Piana, Gucci, Prada, or Brunello Cucinelli—and were informed that the stores were prohibited from hiring them until at least six months after they parted ways with Saks, unless managers from both stores agreed to make an exception.
According to the lawsuit, the no-hire agreements, which have allegedly been in place since 2014, have injured proposed class members in that the workers have, without their knowledge, been unable to apply for and accept luxury retail store positions for which they’re qualified.
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