Class Puts Saks at Helm of Wage Stagnation in Luxury Retail

BROOKLYN. N.Y. (CN) — Touting the prowess that made her a star saleswoman at Saks, Ying-Liang Wang says she was the perfect fit to jump ship to a more lucrative career at Gucci and Prada.

Representatives for both brands were ready to hire her — she’d just have to leave Saks and cool her heels for six months before applying so as not to trigger a pesky noncompete clause that controls all hiring in luxury retail.

A model wears a creation as part of the Gucci cruise collection that was presented at the Capitoline Museums in Rome on May 28, 2019. (AP Photo/Andrew Medichini)

Challenging that scheme as a breach of U.S. antitrust law, Wang and two other sales associates brought a federal class action with the law firm Faruqi & Faruqi.

In addition to Gucci, Prada and Saks, the clothier with 150 locations across the country, Louis Vuitton, Fendi, Loro Piana and Brunello Cucinelli are all named as defendants to the complaint in Brooklyn.

Wang, whose salary at Saks stagnated at $65,000, labels the retailers’ no-hire agreements as a conspiracy with one illegal goal: to keep wages low and otherwise reduce natural industry competition.

The complaint says no-hire arrangements eliminate the possibility of moving laterally to climb the industry ladder and earn more money.

Employees who wanted to change positions “had no choice but to accept employment for lower compensation at less prestigious companies where the same opportunities to sell luxury retail goods do not exist, an untenable option,” the complaint states.

Wang and her fellow plaintiffs also accuse the retailers of setting salaries at coordinated baseline levels, blunting the effects of any salary negotiations by their employees.

Such practices allegedly allow retailers like Saks to pay less, offer less appealing benefits, and not actively work to keep employee morale high.

“Without the benefit of cold calling and open communications with prospective employers such as Fendi, a Saks Luxury Retail Employee lacks information regarding Fendi’s pay packages and other compensation terms. Without this information, the employee lacks leverage when negotiating with Saks,” the complaint states.

It’s not clear who will represent the defendants in Brooklyn. Representatives at Saks, Louis Vuitton, Fendi, Gucci, Prada, Loro Piana and Brunello Cucinelli did not immediately return requests for comment Tuesday.

The plaintiffs seek unspecified damages.

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