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Greek-American John Varvatos’ Company to Pay $3.5M over Employee Discount Policy

March 27, 2020

NEW YORK – Greek-American designer John Varvatos’ company was ordered by Manhattan Federal Magistrate Judge Gabriel Gorenstein on March 23 “to pay $3.5 million to women sales associates impacted by the male-only discounts for free Varvatos gear” following a jury trial over the company’s employee discount policy, the New York Daily News reported.

“Tessa Knox, a former employee at a John Varvatos store in East Hampton, sued in 2017, claiming the discounts unfairly screwed over female employees,” the Daily News reported, adding that “under the policy, male employees annually received a $12,000 store credit.”

“Female employees received a 50% discount at Varvatos’s sister store, AllSaints,” and “the maximum discount at AllSaints was capped at $5,000 per year, according to a complaint,” the Daily News reported.

Varvatos “defended the policy in court papers as a necessary component of the company dress code,” noting that “male sales staff were required to model the clothing while on the job” though “female staff had to adhere to a dress code but were not required to wear John Varvatos,” the Daily News reported.

“If nothing else, the clothing allowance compensates male sales associates for 100% of the cost of the clothes they wear to work, while JV compensates female sales associates 0% of the cost of the clothes they wear to work,” Knox’s attorneys argued, the Daily News reported.

According to court documents, “more than 70 female employees who worked for the company since February 2015 are potentially eligible for the payout,” and “there are at least 22 John Varvatos stores around the country,” the Daily News reported.

“The duties Knox performed for [John Varvatos] as a sales associate required the same skill, effort, and responsibility as the work male sales associates performed,” Knox said in her complaint, the Daily News reported.

The company said it’s not rare for The company told the Daily News that sales associates can earn $80,000 per year, with some earning over $100,000. Knox’s attorney did not comment by press time.

“John Varvatos Enterprises is fully committed to treating all employees fairly and equitably, and we do not discriminate between men and women in determining compensation. We respectfully disagree with the court’s decision and are considering all of our legal options,” a Varvatos spokesman said, the Daily News reported.

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