The demise of the Zac Posen brand is not coming without at least one lawsuit, which sheds some light into the winding down of the famed fashion brand. It turns out that a few weeks before Zac Posen announced that it would shutter after 20 years in business, the New York-based womenswear brand favored by supermodels, pop stars, and big-name celebrities was named in a new lawsuit by its former chief financial officer Dominic Miachon-Hobson, who is seeking upwards of $200,000 in unpaid wages and unreimbursed expenses.
According to the complaint filed in a New York state court last month, Miachon-Hobson claims that House Of Z, LLC d/b/a Zac Posen owes him $167,177.51 in unreimbursed business expenses, as “in the course of his employment, [he] paid for various expenses incurred by [the brand], including, but not limited to, tax payments, utilities bills, and shipping fees, with his personal credit card.” While the brand had previously “reimbursed [him] for all business expenses that he had paid for with his personal credit card” in accordance with the terms in the company’s Employee Handbook, Miachon-Hobson says that that practice came to a halt recently, leaving him with more than $150,000 of unreimbursed expenses, “despite [his] repeated requests for reimbursement.”
Beyond the outstanding expanses, Miachon-Hobson – who joined the brand as CFO in early 2017 after serving in the same role at Los Angeles-headquartered retailer Curve – claims that Zac Posen is also on the hook for unpaid wages, as it failed to pay him at least a month’s worth of wages before giving him the boot in late September.
Miachon-Hobson claims that Posen “failed to pay [his] wages” between August 30, 2019 and September 27, 2019, at which point the brand “advised [him] that he was being suspended without pay” in lieu of “providing a reason for [his] suspension.” Less than a week later, Zac Posen announced that it would shutter, effectively immediately, after spending at least a month, according to a statement that Mr. Posen gave to WWD, “trying to find the right strategic partners” and conducting a “comprehensive strategic and financial review of the businesses.” So, it is safe to say that that is the reason.
Nonetheless, by failing to reimburse his for the business expenses, and to pay his wages, an amount that Miachon-Hobson does not specify in the complaint, the brand’s former CFO claims that it has run afoul of his employment agreement, and sets forth claims of breach of contract, violation of New York Labor Law, promissory estoppel, and unjust enrichment.
Miachon-Hobson claims that he “has sustained various injuries as a result of his reliance on [Posen’s] promise [of payment], including, but not limited, to monetary damages in the amount of the unreimbursed expenses, damage to his credit, and out-of-pocket medical expenses,” and argues that it “is against equity and good conscience to permit [the brand] to retain the benefits of the [business expenses] without reimbursing Miachon-Hobson.”
The New York Post, which first reported on the case, cited Miachon-Hobson as saying that he permitted the brand to use his credit card “to help the company get credit,” and says that he “even paid the payroll taxes from my own account.” At the same time, the publication cited a source who said that while “everyone was trying to make it work,” Miachon-Hobson “wasn’t authorized to put expenses on his credit card” and has “signed a clause saying he wasn’t going to put in his personal money” to aid in the failing company’s operations.
As for Posen’s board, it said that it is “determined to cease business operations and carry out an orderly disposition of its assets.
*The case is Dominic Miachon-Hobson v. HOUSE OF Z, LLC d/b/a ZAC POSEN, and OKZ, LLC, 159942/2019 (N.Y.Sup).