Bloomberg News

Abercrombie Settles Pilot Lawsuit After CEO Ordered to Testify

November 22, 2012

Abercrombie Settles Pilot Lawsuit After CEO Ordered to Testify

An Abercrombie & Fitch employee, center, poses for photos with two customers at the entrance to the company's Fifth Avenue store, in New York. Photographer: Mark Lennihan/AP Photo

Abercrombie & Fitch Co. (ANF:US) settled an age-discrimination lawsuit brought by a former corporate jet pilot in 2010 after a judge ordered Chief Executive Officer Michael Jeffries to give a second deposition in the case.

“The matter has been resolved and we have no further comment,” General Counsel Rocky Robins said yesterday in a telephone interview, declining to disclose the terms of the agreement. Tim Kolman, a lawyer for the pilot, declined to provide additional details in an e-mail yesterday. The pilot’s lawyers rejected a six-figure settlement offer last month, according to a court filing.

U.S. District Judge Paul Diamond ordered Jeffries, 68, to be deposed for up to seven hours in Philadelphia by today after Abercrombie’s “disturbingly belated production of highly damaging evidence,” primarily a set of handwritten notes from the teen retailer’s former director of procurement, according to a Nov. 8 order.

Jeffries was deposed in Ohio two years ago as part of the lawsuit, filed in federal court in Philadelphia by corporate jet pilot Michael Stephen Bustin, who is now 55 and claimed he was fired and replaced by a younger man. The suit, brought in April 2010, has uncovered Jeffries’s specifications for the airplane’s attendants, from how they were to address him and his guests to the Abercrombie cologne they wore. The plaintiff also sought to determine his partner Matthew Smith’s involvement at Abercrombie and flight crew selection through his role heading a limited liability corporation called the Jeffries Family Office.

Handwritten Notes

The plaintiff pursued additional discovery after Abercrombie handed over hundreds of handwritten notes from its former director of procurement, Scott Mayer. The judge had also ordered depositions of a former Abercrombie human resources manager and a Jeffries Family Office representative.

If credited, Mayer’s notes “may well offer compelling proof that Matthew Smith, the life partner of Abercrombie CEO Michael Jeffries, allegedly acting at Jeffries’s direction, illegally ordered Plaintiff’s termination because of Plaintiff’s age,” Diamond wrote in the Nov. 8 order.

Abercrombie is in the midst of preparing for the holiday shopping season, its most important quarter. During fiscal 2012, New Albany, Ohio-based Abercrombie generated 32 percent of its $4.16 billion in revenue (ANF:US) in the fourth quarter.

Jeffries has been struggling to reverse a decline in U.S. store sales as shoppers grow weary of Abercrombie’s risqué marketing and fashions. Activist investor Ralph Whitworth has pressed for changes, a person familiar with the matter said in September.

On Nov. 14, the shares soared the most since its initial public offering after Abercrombie boosted its full-year profit forecast and reported sales gains internationally and online.

The pilot’s case is Bustin v. Abercrombie & Fitch Co., 10- cv-01675, U.S. District, Eastern District of Pennsylvania (Philadelphia).

To contact the reporter on this story: Sapna Maheshwari in New York at sapnam@bloomberg.net

To contact the editor responsible for this story: Robin Ajello at rajello@bloomberg.net


Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • ANF
    (Abercrombie & Fitch Co)
    • $41.31 USD
    • -0.45
    • -1.09%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus