John Galliano’s Suit: A Sobering Reminder of the Risks of Eponymous Fashion Labels
Disgraced fashion designer John Galliano has brought a labor relations suit against his former employer, Christian Dior Couture, and its subsidiary label, John Galliano SA. The Gibraltar-born British designer and 15-year Dior couturier was ousted from his creative director roles at the two design houses after his February 2011 arrest and conviction for a racist and anti-Semitic tirade at a Paris café.
Dior claims Galliano’s services to the brand were those of an independent contractor, citing the complex web of contracts establishing Galliano as creative director for Christian Dior and John Galliano SA, as well as a number of consultancy agreements through Galliano’s company, Cheyenne Freedom. The Conseil de prud’hommes, the French Labor Relations Court, ruled in favor of Galliano in February 2013, finding that Galliano was a salaried employee rather than an independent contractor.
Though Galliano’s counsel has declined to specify the requested damages as they are contingent on the charges admitted in the court hearing, estimates hover around €6 million (US$7.8 million). This number is based on his fixed annual salaries at Christian Dior and John Galliano SA of €1 million (US$1.3 million) and €2 million (US$2.6 million), respectively, plus variable compensation of up to €700,000 (US$906,400), and percentages linked to annual sales increases as well as overall decreases in the perennially unprofitable design house’s annual losses. The case is currently scheduled to head to the Court of Appeal in Paris, with a hearing set for October 24, 2013.
The questionable legality of Galliano’s removal from his position as creative director of John Galliano SA in particular is reminiscent of past instances in the fashion industry in which designers with eponymous labels have lost the rights to said labels and, by extension, to the use of their own names as monikers for their creations. Particularly memorable is the tragic tale of Kari Sigerson and Miranda Morrison, who lost their shoe empire, Sigerson Morrison, when Nine West’s Marc Fisher invested in their company as a financial backer. Fired from their own label in 2011, the two women no longer have the right to put their own names on their shoes–they signed that away to Mr. Fisher in 2006.
A similar fate befell clothing designer Sigrid Olsen after she sold her label to Liz Claiborne in 1999. Olsen continued to serve as creative director of her eponymous line until she was let go from that position when Liz Claiborne shuttered the brand in January of 2008. The retail conglomerate retained the trademark and a noncompetition agreement, meaning Olsen could not design clothes until 2010 and could never again design under her own name, barring a change in the trademark agreement.
In Galliano’s case, the cause of action is based on employment rather than intellectual property rights. However, Galliano’s suit against Christian Dior is a reminder that fashion is a business as much as it is an art, and even the industry’s biggest (and most highly-paid) designers aren’t immune from the dangers associated with signing away trademark rights to their names.