Herrera, de la Renta settle employment dispute

Carolina Herrera and Oscar de la Renta, two major American fashion houses, seem to have decided that dirty laundry is not the best look.

For months, the companies had been engaged in an escalating legal battle over a young designer’s noncompete contract that culminated in Carolina Herrera filing suit against Oscar de la Renta in mid-December.

Parties representing the two labels and Laura Kim, the creative director at the heart of the dispute, had been expected to appear in court on Tuesday to debate whether Kim must follow the stipulations of her contract with Carolina Herrera and refrain until April from becoming creative director at Oscar de la Renta.

Instead, they have quietly settled the matter, and Kim, who had been briefly barred by a judge from working at Oscar de la Renta, is being allowed to continue developing the fall 2017 collection that will have its debut at New York Fashion Week next month.

Both companies offered the same statement, saying only that a settlement had been reached and that the terms “are confidential, except that Laura Kim has returned to Oscar de la Renta, LLC, subject to the conditions agreed upon by the parties.”

Monse, the label that Kim runs with her creative partner, Fernando Garcia, and which was also a factor in the clash, had no comment.

Though the terms of the settlement are unclear, it seems to be a victory for Oscar de la Renta, which was at risk of having to delay the highly anticipated February debut by Kim and Garcia, its star hires.

The extent to which Oscar de la Renta and Carolina Herrera had taken their dispute, submitting court documents that exposed matters such as succession struggles that are typically confidential, reflects how much the two companies value Kim, and the tension that has long simmered between the fashion houses.

In its complaint, Carolina Herrera said of Kim that she is “not merely a uniquely talented designer, but she is also uniquely talented in designing what ‘sells’ on a commercial scale in the specific segment of the market where both CH and ODLR compete.” It went on to describe her talents, citing her resort 2016 line which was the house’s most successful collection in 35 years.

Kim had worked for Oscar de la Renta for more than a decade before leaving for Carolina Herrera. Her move was partially sparked by a decision to bypass her (and Garcia) as creative directors after the death of their mentor, de la Renta. The company instead hired Peter Copping, previously of Nina Ricci.

Kim and Garcia struck out on their own, creating Monse, a label that drew praise from the industry and attracted celebrities including Amal Clooney, Sarah Jessica Parker and Brie Larson.

Alex Bolen, the chief executive at Oscar de la Renta, quickly realized his mistake in losing the pair. Several months after Kim joined Carolina Herrera, Bolen dismissed Copping from Oscar de la Renta, and Kim submitted her resignation at Carolina Herrera. She appeared to be back at work at Oscar de la Renta two months later, in September 2016.

According to the conditions of her Herrera contract, her resignation would not become effective until October, so she was barred from designing for anyone else until April 2017.

But Kim’s lawyers argued that she had been forced out of Carolina Herrera and, therefore, was not obligated to comply with the noncompete contract. In a court affidavit, Kim asserted that though she had joined the company under the impression that she would eventually be made creative director, Herrera herself had not been made aware of these conversations and sometimes intervened in, or criticized, Kim’s work.

It was François Kress, the president and chief executive of Carolina Herrera, who offered the post of creative director and its $1 million salary to Kim. But the offer came after she had filed her resignation to escape a work environment that her lawyers later described as “surreptitious” and “untenable.”

As the argument between the two big labels escalated, Carolina Herrera’s representatives made it clear that the label would be comfortable with Kim working anywhere but Oscar de la Renta, exposing just how much of a threat it considered the other company.

Meanwhile, Oscar de la Renta’s lawyers expressed anger at Carolina Herrera’s “pattern and practice of poaching” Oscar de la Renta employees — according to the letter, nearly a dozen had been recruited during the past few years — and accused the house of having “a record of unclean hands and unfair competition.”

With the discreet settlement arriving just days before the scheduled court date, it appears that both labels feel it is time to redesign their relationship. And now that the legal drama has come to an end, the industry can finally turn its attention to Kim and Garcia’s February debut instead.