LVMH shows firm support for CEO, after COO was fired over financial fraud


The former COO of Marc Jacobs, who claims he was fired for accusing a colleague of sexually harassing employees, was actually removed from his position for fudging the company financial results, court papers stated yesterday.  According to the label, which is owned by fashion powerhouse LVMH, Patrice Lataillade falsely boosted the company’s financial performance in order that he could claim a larger bonus. Lawyers for Marc Jacobs International say that audits of the company finances found that Mr Lataillade’s ‘false and inflated entries’ were in excess of $20 million.

The company also denied the former COO’s claims that Robert Duffy, the company’s CEO and Mr Jacobs’ longtime business partner, made staff pole-dance for him, and took company funds for his own personal use.

But MJI lawyers explained yesterday that staff had posed voluntarily for the book, which was created to raise money for breast cancer research and is available to buy on the company website.

Court papers at the Manhattan Supreme Court also stated that ‘Lataillade was not subjected to sexual harassment or retaliation, nor did he ever complain of such conduct.’ Mr Lataillade, who had worked for the company since 2002 and earned $1million-a-year in his post, is seeking unspecified monetary damages for ‘discrimination, retaliation and his mental anguish and humiliation.’

The court papers also allege that Mr Lataillade – whose position afforded him benefits including ‘an annual automobile allowance of $10,000, annual round-trip airfare to Paris for Lataillade and his family, and additional compensation for tuition fees for Lataillade’s children’ – is yet to pay back a 2008 loan from the company of $60,000. Mr Lataillade’s lawyer denies all allegations made by MJI, arguing that the company was audited during the period in question.Mr Lataillade accused Mr Duffy in March of ‘displaying gay pornography in the office and requiring employees to look at it; his production and dissemination of a book which photos of MJI staff in sexual positions or nude; [and] his requirement that an MJI store employee perform a pole dance for him.’ He insists that when he attempted to raise his issues, he was fired.


A suit filed by his lawyers in March claimed that Mr Duffy ‘uses company funds for personal expenses and does not censor what he does or says.’ It also alleged: ‘There have been sexual harassment cases threatened or brought against defendants based on Duffy’s conduct. Because Duffy (correctly) believed that he would not be punished for his conduct, it grew increasingly worse.’

Mr Lataillade’s lawyer said yesterday that MJI’s denial of claims that employees were sexually harrassed are ‘surprising considering we have photographs, video and other evidence.’ Mr Lataillade believes that there is a link between an email he says he sent to senior staff at LVMH, ‘summarizing the legal situation and the hostile environment,’ and his sacking a week later. LVMH has stood by Mr Duffy, and said in a statement that it would ‘vigorously defend the case in court.’

from the Daily Mail