SheFit, the sports bra manufacturer with the slogan ‘Rethink Your Sports Bra, Rule Your World,’ finds itself in a tight squeeze these days after a pair of lawsuits filed by former employees accuse the Michigan-based company of breach of contract, sexual harassment, and whistleblower retaliation in documents filed in a U.S. District Court on Oct. 31.
The plaintiffs in the separate cases are represented by the same law firm and both accuse SheFit owners Robert and Sara Moylan of breach of contract for not paying them severance according to their contracts after each was fired for what both consider unjust reasons.
The day after the suits were filed, SheFit denied all allegations and defended the firing of both employees as decisions made based on poor financial performance.
“SheFit was founded in a basement, by a woman to empower all women to be their best,” the statement said. “Any allegations of sexual harassment or discrimination are simply false. SheFit looks forward to vigorously defending itself and its employees against any baseless and predatory actions by disgruntled former executives.”
One of the plaintiffs is SheFit’s former chief executive officer Angel Ilagan, who held the position from Oct. 19, 2021 until his termination on Sept. 7, 2022 and previously was the chief marketing officer at Vera Bradley and Pandora.
Ilagan claims that according to his contract, he was to be paid 18 months severance, all remaining PTO and be vested 1.5 percent of equity, all of which, the plaintiff contends, the company reneged on in the final days of his employment and drew up a new plan which Ilagan rejected.
He is seeking $900,000 in backpay, plus the stock in Count 1. Count 2 contends that his termination was unlawful in the first place under the Whistleblower Protection Act.
In Count 2 of the court filing, Ilagan says he was fired after he brought to the Moylans attention evidence of tax evasion and upon informing them of his intention to report the matter to the IRS, his employment was terminated.
The other plaintiff, Michelle Zeller, was hired as chief marketing officer by SHEFIT on Oct. 7, 2021 and fired Sept. 7, the same day as Ilagan, her immediate supervisor.
Like Ilagan, Zeller is suing for breach of contract in the amount of $236,250 for nine months of severance, plus damages, and, like her former boss, contends that her firing was unlawful in the first place.
In Count 2 of her filing, Zeller accuses the Moylans of sexual harassment and discrimination. In court documents, Zeller, who is married to a woman, contends that Robert Moylan made “sex-based comments… including musing that one night in bed with him could turn Plaintiff’s wife straight.”
The complaint also accuses him of making comments on Zeller’s appearance, sexual orientation and “demonstrating hostility to a transgender employee (referring to the individual as an ‘it’).”
In Count 3, Zeller accuses the defendants of retaliation under the Elliott-Larsen Civil Rights Act. She says that after she complained to the company’s human resources department, she was ordered to terminate certain employees based on their weights. When Zeller refused, she contends, she was fired.
Both plaintiffs have requested jury trials.
SheFit was founded in 2013 by Sara Moylan, a former Miss Teen Michigan and Mrs. Michigan winner, who says she started the concept not in an effort to start a business, but rather to make her own bras more comfortable. That concept of solidarity and camaraderie among women and girls is central to SheFit’s branding image.
The fully adjustable sports bra leapfrogged to a new level of success in 2016 when the Boylans appeared on “Shark Tank” and won a $250,000 investment from Shark investor Daymond John, who took a 33 percent share in exchange. Wirecutter recommends the bra as a top pick for larger-busted women
Nearly a decade on, the company now reportedly does $7 million per year in sales and became the official sports bra of USA Pickleball in June.
The lawsuits filed by former executives aren’t the only legal troubles facing the company. SheFit is being sued by Baltimore-based Gray Kirk/VanSant Advertising for unpaid bills of nearly $250,000, according to documents filed Oct. 14 in a Maryland district court.