Zara's corporate culture is ugly according to Miller v. Zara USA, Inc., the lawsuit that Ian Jack Miller, the former General Counsel of Zara USA, Inc. has filed against Zara, Zara USA, Inc.’s Country Manager Dilip Patel, and ex-CEO Moises Costas Rodriguez in New York’s Supreme Court for violations of New York state and city laws, which prohibit pay discrimination, wrongful discharge, retaliation, and hostile work environment.
Zara is the flagship-clothing brand for Inditex Group, which offers catwalk-inspired looks at low prices. It operates approximately 2,000 stores in 88 countries. Miller is asking the Court to award him more than $40 million in damages, including lost compensation, back pay, front pay, compensatory damages, liquidated damages, and punitive damages.
Miller argues in court documents that because he was not a member of Zara’s preferred demographic – straight, Spanish, and Christian – he was discriminated against and subject to a hostile work environment. Miller, who served as Zara’s General Counsel from January 8, 2008 through March 5, 2015, contends supervisors and colleagues sent him homophobic emails, made anti-Semitic remarks in his presence, and boasted that Spanish employees enjoyed more job security than employees of other nationalities.
Miller built the Zara USA, Inc. legal department from its inception. He routinely handled litigation and real estate transactions while managing the legal requirements of two $300 million real estate acquisitions that were unprecedented in Zara’s history. In 2013, he oversaw the company’s purchase of its store at 666 Fifth Avenue in New York City for $324 million, a record deal for a retail property in the United States.
Beginning in early 2014, Miller complained on multiple occasions to Inditex Group’s highest-ranking legal officer, Javier Monteoliva, that he was being harassed and discriminated against for being Jewish and gau. Despite these complaints, neither Zara nor Inditex Group took any action to rectify the illegal treatment, according to the suit filed on June 3.
On March 2, 2015, Monteoliva communicated to Miller that his continued employment at Zara was in jeopardy. In explaining the situation, Monteoliva stressed the role of Zara’s founder Amancio Ortega, stating that Dilip Patel has a closer relationship with Ortega than he does. Patel was one of only a handful of employees from Inditex Group’s entire global workforce (which consists of over 137,000 employees worldwide) whom Ortega invited to attend his daughter’s nuptials. As a result of this personal connection, it is alleged that Patel engaged in discriminatory and harassing conduct with impunity.
On March 4, 2015, Miller’s counsel sent a letter that notified Zara of Miller’s claims of unlawful discrimination based on his religion, national origin, and sexual orientation, and expressed interest in reaching an amicable resolution.
On March 5, 2015, Zara terminated Miller and expressed no willingness to provide Miller with a severance or a transitional period to seek other employment or to otherwise negotiate the terms of his future with Zara.
“As I said many times, the fashion world, its system, can be disturbing,” observed Azzedine Alaia. Miller claims Zara’s influence among fashion retailers and real estate companies limits his ability to find a job in the same field. The man who earned two law degrees from McGill University in 1991 claims Zara’s termination of him embarrassed him and tarnished his well-earned reputation.
When companies show you who they are, believe them the first time. Zara is infamous for selling products featuring racist and anti-Semitic images and messages, including handbags depicting swastikas, children’s pajamas resembling concentration camp uniforms (a product that, after an international outcry, Zara said would be “exterminated”), necklaces containing figurines in black face, and a T-shirt proclaiming that “White Is the New Black.”
After it was revealed Miller is Jewish, Francesc Fernandez Claramunt, one of Zara’s most senior employees, probed him about why he had not shared this important information before. (According to Miller, for most of his tenure at Zara, he was the sole Jewish employee at Zara’s corporate headquarters in New York.) Miller maintains that after Patel discovered he was Jewish, the Country Manager marginalized him, interfered with his duties as General Counsel, and isolated him from his colleagues around the globe.
Miller also claims Zara loathes hiring recognizably Jewish candidates. For example, Will Klein, Miller’s Jewish paralegal, began work as a temporary employee. Despite Klein’s excellent performance and Miller’s recommendation that Zara hire him permanently, Zara strongly resisted Klein on a permanent basis, according to the lawsuit.
As a wholly owned subsidiary of the Inditex Group and one of Spain’s largest corporations, Zara is being blamed for demonstrating a preference for hiring employees from Spain and offering Spanish employees greater advancement opportunities than American employees. Miller argues Spanish employees are subject to relaxed performance expectations compared to their American counterparts and that Spanish employees are paid more than similarly situated American employees.
If true, the allegations set forth in Miller’s complaint establish that civil rights progress cannot come soon enough to Zara. Case in point, Defendant Moises Costas Rodriguez sent Miller an email highlighting language that marriage is an institution “sanctified between a man and a woman.” In another instance, Rodriguez directed an email to Miller drawing his attention to a “gay sex scene” in a video game.
While Miller says he struggles with severe emotional distress as a result of the hostile work environment he endured at Zara, Amancio Ortega just passed Warren Buffet as the second-richest man in the world, according to Bloomberg. The world’s wealthiest retailer has amassed a net worth of over $70 billion. No doubt some of those billions stem from Zara’s ability to exploit the fast fashion archetype.
“We do not tolerate any behavior that is discriminatory or disrespectful, but value each individual’s contributions to our dynamic organization,” Zara said in a statement responding to Miller’s suit. The power of proof will reveal truckloads about Zara’s ethics and practices in the coming months, and we will continue to monitor this case closely.