Human V. House : A Combat for Couture Command of Luxury Labels

As an industry that thrives on - rather than succumbs to - adversity, the couture corporate world demands innovation and encourages risks. When combined with successful marketing and savvy business practices, these risks can result in large payoffs, which exist, primarily, due to the nature of the global fashion market. Endless consumption drives the market, rewarding fashion houses that cater to current trends with top-line growth and damning those whom fail to suffer decreased net earnings. In order to remain a viable player in the fashion industry, the house must have the resources to market and manufacture the product in a timely manner, as well as incur the costs if a collection is poorly received. Despite the clear risks, there is a large incentive to enter the highly competitive fashion industry: success guarantees millions, or billions, of dollars in profit; and, because the industry itself generates over a trillion dollars annually, the opportunity exists for hundreds of labels to each have a million dollar piece of that fashion pie.While extensive research documents the intellectual property concerns of the fashion industry, little research exists regarding other legal issues that arise in the industry. The present paper begins to fill that gap by assessing the employer-employee relationship between the fashion house and its top designer in order to demonstrate the importance of human capital to the house's continued success. Engaged in repeated transactions, both the house and the designer will seek to increase their respective bargaining power over time. The objective of the house is to prevent a designer from gaining excessive bargaining power and from taking actions that could negatively impact the label due to public backlash. In contrast, the objective of the designer is to promote his or her individual style, which requires retaining the maximum amount of creative license available, through the production of collections bearing the name of the house. The examination of this gap will help to develop an understanding of the unique nature of the fashion industry and will highlight the fact that broad opportunities exist to conduct future fashion law research