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Ex- New Avon CEO: Company Reneged On $1M Severance
Laurie Ann Goldman said she was let go after LG Household & Health Care’s deal in April to buy the company.
New Avon’s former chief executive officer, Laurie Ann Goldman, sued the company on Tuesday, claiming she was terminated in August and denied $1,050,000 in severance pay she is owed.
In a breach of contract lawsuit filed in
New York State court, Goldman argued that the company, which operates the Avon business in North America, was essentially mischaracterizing her departure as a “resignation” in order to avoid paying her the sum.
Goldman claimed that the company is making the argument based on an older contract from when she became a director at the company in August 2018, which had apparently included a provision that leaving the director post would count as a resignation. But Goldman is arguing that the controlling contract is the newer one she signed in
January 2019 when she became ceo.
“And, the superseding employment agreement plainly provided that upon Goldman’s removal as a director, she remained ceo of New Avon,” she said in the complaint, referring to her January 2019 employment agreement. “Thus, no resignation occurred.”
A representative for New Avon and attorneys for Goldman could not be reached for comment Wednesday.
Goldman, who is also former ceo of shapewear brand Spanx, is seeking some $700,000 in base pay severance that she claimed the company should have started paying in September, as well as $350,000 in bonus severance allegedly due to her by March 2020, according to the suit. But New Avon has said so far that it does not believe it has to pay the bonus severance amount, Goldman said.
Those severance payment provisions were included in contract documents surrounding her January 2019 agreement, from when she was appointed to serve as ceo, she said.
“Unfortunately, New Avon, in a decision driven by its new owner, is attempting to avoid its contractual severance obligations,” she claimed in the suit.
Goldman, also a former executive at the
Coca Cola Co., had become a member of New Avon’s board more than two years after private equity firm Cerberus Capital Management L.P.’s $605 million investment with Avon Products
Inc. in March 2016. That deal resulted in Avon’s North American business being split off into the private company now known as New Avon.
Goldman described a sense of trouble on the horizon around the time that Korean consumer goods company LG Household & Health Care Ltd., a unit of LG Corp. announced this year in April that it would acquire New Avon.
A Q&A about the transaction at the time removed a line about Goldman staying in her role, she said, and then, in August, New Avon informed employees that Goldman would be replaced by Paul Yi as ceo after the transaction closed, according to the complaint.