Legal News

A Fashion Flap for Fashion Week

By Dan Slater

The Law Blog was fairly distraught this morning. We’ve been hearing so much about how eco-chic, skinny belts and chunky cardigans are all the rage at this year’s fashion week in NYC. And yet, it was halfway through the week-long event and we still didn’t have a legal angle.

But thanks to a recently-decided spat between two fashion headhunters we finally got our fix.

24 Seven Inc., an agency that staffs designers in fashion houses — such as Polo Ralph Lauren, Kenneth Cole and Zac Posen — recently won a $742,000 trade-secrets judgment in New York state court against the Gromwell Group, a competitor. With interest, the award exceeds $1 million. Here’s the press release from 24 Seven and a story from Women’s Wear Daily.

How did Gromwell get ahold of 24 Seven’s trade secrets? According to the company’s attorney, Richard Reice, a former 24 Seven employee who left in 2004 later disclosed in a job interview with Gromwell that he had the stolen information.

“What the case really speaks to is the fashion staffing industry,” Reice told the Law Blog. “It means the theft of trade secrets, whether the designs themselves or the people, occurs frequently, and that courts will take firm corrective action when provided proof of wrongoing.”

A call to Gromwell’s lawyer, David Bolton, was not immediately returned. But Gromwell’s bankruptcy counsel, Tracy Klestadt, told the Law Blog that Gromwell plans to appeal the judgment.

Unfortunately for 24 Seven, Gromwell decided to file for Chapter 11 bankruptcy, making a recovery unlikely since 24 Seven is an unsecured creditor of Gromwell. “It’s amazing,” said Reice. “A bunch of defendants are being found liable in one court, and then they’re able to seek refuge in the bankruptcy court. That’s a pretty disheartening result.”

Law Blog YouTube Video of the Day: For the Law Blog’s money, Ben Stiller was at his best as a male model in Zoolander. Check out this mock Heineken ad from the movie, and giggle yourself silly.

Full post as published by Law Blog - WSJ.com on February 06, 2008 (boomark / email).