Trouble is brewing at the notoriously private fashion brand of former child stars Mary-Kate and Ashley Olsen. Just over three months after their brand The Row parted ways with its president, the former executive has waged a legal battle against the famous twins and their critically acclaimed fashion label. A complaint filed in New York state court this month reveals that David Schulte has taken on Mary-Kate and Ashley Olsen, their brand The Row, and their entertainment LLC Dualstar, although, since the complaint was filed under seal, details about the case are scant as of now.
What is known about the proceeding is that late last week, counsel for Schulte filed a request that the case be assigned to the commercial division of the court, a branch of the court system responsible for handling “complicated commercial cases.” In order for a case to be permitted to be handled in the commercial division in New York, the matter must meet the various jurisdictional requirements, including a monetary threshold, “which is generally applicable,” according to the court, and “is an amount in controversy of $ 500,000 or more (exclusive of punitive damages, interest, costs, disbursements, and counsel fees).” (There is an exception to this threshold if the remedies being sought are equitable or declaratory relief).
As for what, exactly, Schulte’s claims against the sisters and their companies are, that is unknown until the documents are unsealed at a later date. However, the UCS 840 addendum that counsel for Schulte – Eric M. George, whose firm bills him as representing clients in “complex, frequently high-profile disputes” – filed last Friday lists “breach of contract or fiduciary duty, fraud, misrepresentation, business tort (e.g. unfair competition), or statutory and/or common law violation where the breach or violation is alleged to arise out of business dealings,” as among some of the key the potential causes of action for a commercial division case.
(Note: Complaints and other filings generally can be sealed upon a showing of a “compelling need” for secrecy that is sufficient to overcome the public’s interest in access. Such a “compelling need” may stem from the inclusion of trade secret information or some comparable interest in the documents).
The filing of the case, itself, which was first reported by the Sun, comes shortly after Schulte reportedly resigned from his role as president of the nearly 15-year old The Row in late October 2019, a post he had held for three years, prior to which he served as CEO of eyewear brand Oliver Peoples.
Not the award-winning brand’s first headline-making legal squabble, The Row was sued back in 2015 for allegedly enlisting and then failing to compensate one of its interns, who claimed that she worked 50-hour weeks for the high-end brand without pay or college credit three years prior. According to the proposed class action lawsuit, plaintiff Shahista Lalani alleged that Dualstar systematically misclassified entry level employees as minimum wage-exempt interns in violation of New York Labor Law. In lieu of pay, Dualstar also allegedly failed to provide Lalani and other similarly situated interns with work that furthered their skills or provided them any academic benefit, as required by both state and federal employment law in connection with unpaid internships.
The case, which the brand called “meritless” and ultimately settled out of court (agreeing to pay approximately $140,000 to a class of 185 interns), coincided with a sweeping number of internship-specific lawsuits filed against fashion brands ranging from Burberry and Gucci to Calvin Klein and Marc Jacobs.
*The case is DAVID SCHULTE vs. MARY-KATE OLSEN, et al, 651466/2020 (N.Y. Sup Ct.).