L Brands, the owner of Victoria’s Secret and Bath & Body Works, will release current and former employees from nondisclosure agreements tied to sexual harassment claims and take steps to to promote diversity, equity and inclusion as part of a settlement with shareholders announced on Friday.
The company, which plans to separate Victoria’s Secret and Bath & Body Works into two public companies next week, said that each brand will spend $45 million each in the next five years to fund its new policies. Other changes include the establishment of a diversity, equity, & inclusion council and an overhaul of internal policies and training for sexual harassment and discrimination. The company will also exempt claims of sexual harassment, gender discrimination and related retaliation from mandatory arbitration.
The settlement followed allegations from shareholders, including the Oregon Public Employees Retirement Fund, that officers and directors of L Brands breached their fiduciary duties by fostering a culture of misogyny at the company, including around models, and by maintaining ties with Jeffrey Epstein, the sex criminal who was close to Leslie H. Wexner, the former chief executive of L Brands.
L Brands formed a special committee last year to investigate the allegations. The committee was led by two female independent board members and involved a different law firm than the company’s typical counsel.
“When our state invests public retirement dollars in a company, we have a duty to make sure our investments are sound — and the board acts in our best interest,” Ellen F. Rosenblum, Oregon’s attorney general, said in a statement. “There was a clear pattern at L Brands of a board that allowed key executives to use their power to promote a culture of fear, discrimination, and harassment.”
The resolution comes as Victoria’s Secret attempts the most ambitious brand turnaround in recent memory. The company told The New York Times in June that it was phasing out the Victoria’s Secret Angels and bringing on a new cadre of women to represent the label, including Megan Rapinoe, the pink-haired soccer star and gender equity campaigner, and Paloma Elsesser, the biracial model and inclusivity advocate. It is also planning to update its product line, make its stores lighter and brighter and ultimately “stop being about what men want and to be about what women want,” according to Martin Waters, the brand’s chief executive.
Victoria’s Secret has revamped its executive team, and women occupy all but one seat on its new board of directors.
Mr. Wexner, a retail billionaire who is considered the modern-day founder of Victoria’s Secret, and his wife, Abigail, departed the L Brands board earlier this year. The brand has come under scrutiny since Mr. Wexner’s close ties to Mr. Epstein came to light in 2019 and a Times investigation showed that Mr. Wexner and his former chief marketing officer, Ed Razek, presided over an entrenched culture of misogyny, bullying and harassment.
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