Kering Ordered to Pay $13 Million to Former YSL Creative in Contract Dispute

Kering has been ordered to pay $13 million to former creative director Hedi Slimane in a provisional court ruling in connection with the way his departure from Yves Saint Laurent was handled, according to a statement from Slimane's lawyer on Wednesday. Slimane filed suit in a French labor court against his former employer's parent company last week, alleging that it did not apply a non-compete clause that was in his contract when they parted ways in April and arguing that the clause should have been applied, along with the associated financial compensation. 

Kering, a Paris-based luxury conglomerate, which also owns Gucci, Balenciaga, and Bottega Veneta, among other brands, confirmed the lawsuit last week in a statement, saying the litigation centers upon the non-compete provisions in Slimane's previous contract with YSL. Kering has said it lifted this clause (a common contractual provision entered into between two parties either upon contract signing or at the end of a business relationship, in which one party agrees not to compete with the other for a set period of time). By lifting the non-compete provision at the end of Slimane's contract in April, Kering simultaneously freed Slimane of the contractual limitation that would otherwise prevent him from working for a competing house for a set period of time and also served to cut off compensation to Slimane, which would have sustained for the duration of the non-compete period. 

As a result of the recent developments, Slimane will almost certainly be barred from working for a competing house –  such as Chanel, where he was rumored to begin the process of being groomed to replace longstanding creative director, Karl Lagerfeld –  for at least several months but certainly not more than one year, as non-compete agreements that last for such an extended duration are almost never upheld in court.

"We won," said Slimane’s lawyer, Herve Temime, in a statement on Wednesday. "I'm happy because this it’s a natural outcome. The contract terms were absolutely clear." 

UPDATE: According to a statement from Kering, its counsel plans to appeal the lower court's ruling.