The Fashion Law Exclusive - Nicholas Ghesquière and Balenciaga were in court in Paris today as scheduled. The Tribunal de Grande Instance of Paris, a French civil court, heard the parties' oral arguments in the $9.5 million lawsuit that Balenciaga filed against Ghesquière, who now serves as creative director at Louis Vuitton. You may recall that Balenciaga filed suit in September alleging that Ghesquière breached his contract, particularly the agreement to refrain from making statements that could undermine the image of Balenciaga or its parent company, Kering, stemming from a string of interviews he gave to London-based fashion magazine System.
Today, Thierry Lévy, who is counsel for Balenciaga, told the court that Ghesquière is a "young man infinitely gifted" and a "hard worker, who managed in a few years the miracle of resurrecting Balenciaga." However, Lévy also told the court that the Paris-based design house has suffered material injury as a result of the designer's breach, saying: "Ghesquière's statements sound like thunder, and Balenciaga is powerless against these words."
Michel Laval, who is representing Ghesquière, referred to the designer as "the spiritual heir of Cristobal Balenciaga." Laval fought Balenciaga's allegations, primarily claiming that there is no proof that Balenciaga has been negatively affected by Ghesquière's comments, telling the court: "No evidence is given of the injury," and highlighting "flourishing accounts of Balenciaga." Laval stated that Ghesquière's comments in the System magazine interview were not meant to incriminate Balenciaga, so to speak. Instead, he believes Ghesquière expressed a view shared by many designers in his position, saying: "This is the old and difficult question of the relationship between the creator and the fashion house. The creator regrets that business logic prevails. But who will say the opposite and why is it negative?"
Moreover, Laval spoke to one of the key comments that is at issue in the case, Ghesquière's statement: “I was being sucked dry, like they wanted to steal my identity while trying to homogenize things." Of this, Laval said that his client was referring to the "characteristic of the designer that get lost in creation." Thereafter, he asked the court, "Where is the repetitional damage to Balenciaga?"
Last but not least, Laval told the court that Balenciaga, particularly the president of the house, Isabelle Guichot and the President/Chairman of Kering, François-Henri Pinault, is at fault for taking the initiative to announce the departure of Ghesquière unilaterally, and not in accordance with the protocol provided in the house's media plan. To this, Lévy remarked: "There was no possible dialogue."
As for what chance Ghesquière stands in winning the suit, it largely depends on the wording of the specific clause prohibiting him from speaking out about his time with Balenciaga. According to what was said in court today, there is a "separation agreement" in place that Ghesquière signed in 2012 and in return, he received compensation in excess of $8 million. The agreement stipulated that he "refrain from declarations that could hurt the image of Balenciaga." This is obviously rather vague, which would probably be more beneficial to Balenciaga than to Ghesquière, as from the sounds of it, there is no need for Balenciaga to prove actual harm in order to claim breach. In fact, if the aforementioned wording is exact, Balenciaga would merely need to show that Ghesquière's statements "could hurt" its image. That's a pretty low bar.
I suppose Ghesquière's légal team could argue that the contract is invalid in someway, maybe it is not limited enough in terms of duration, it is unconscionable (aka it is grossly unfair to the party with lesser bargaining power … Ghesquière), or it is the result of undue influence. I doubt that any of these defenses to a breach of contract will be valid, however, as the parties to the contract, Balenciaga and Ghesquière (who was undoubtedly represent by legal counsel) are sophisticated parties and absent some major mistake, the contract is likely enforceable.
Finally, there is the argument that Ghesquière was merely sharing his opinion on the matter, something that Ghesquière's lawyer proposed in court today. Because the matter is between two private entities, the First Amendment right to speech likely does not come into play. However, on a related note, I do wonder if Ghesquiere’s lawyer has a point here. While I agree that Nicolas probably should have chosen his words a bit more wisely in order to avoid legal ramifications, is he shedding light on a larger issue: That creative directors and designers are really doing too much in light of the increased speed of fashion and the number of collections they are expected to turn out each season?
The court has set a verdict for August 27th if the parties do not reach a settlement poor to that date. More to come …