Sports bra brand Shefit sued by 2 former executives

Michigan-based women’s sports bras and activewear company Shefit is facing legal action from two former top executives that includes allegations of tax evasion, firing of employees in because of their weight and the raunchy remarks of the founder’s husband.

The lawsuits against the company, which is headquartered west of Grand Rapids in Hudsonville and known for its TikTok following and body-positive marketing, were filed in US District Court last week by the former chief executive of Shefit and a former chief marketing officer. The lawsuits also name Shefit founder Sara Moylan and her husband Robert Moylan as co-owners.

The two former executives are asking for severance packages which they claim the company still owes them.

In a statement on Tuesday, the company said the former executives had been “released” from Shefit after 12 months of continuous business losses and said the allegations were “ridiculous and baseless”.

“Shefit was founded in a basement, by a woman to empower all women to look their best,” the statement read. “Any allegations of sexual harassment or discrimination are simply untrue and the predatory actions of disgruntled former executives.”

Shefit was launched in 2013 by Sara Moylan, a former Miss Teen Michigan and Mrs. Michigan, who created the company’s first adjustable sports bra.

She and Robert Moylan went on to appear on the ABC reality show “Shark Tank” in 2016 and landed an investment in Shefit. In June, Shefit became the Official Sports Bra Partner of USA Pickleball. The company’s website states, “We won’t stop until every woman and girl gets the shape and support they deserve.”

Alleged tax evasion

Former Shefit CEO Angel Ilagan claims in one of the lawsuits that he was fired in early September after telling a company executive he intended to report the Moylans to the Internal Revenue Service for “widespread tax evasion”.

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Ilagan alleges he observed Moylans misreporting personal expenses as business expenses, including referring to ‘lavish’ personal vacations as Shefit board meetings, even when no such meeting took place. been documented, and listing 2020 and 2021 personal expenses as a debt to Shefit to avoid having to report taxable income, according to the lawsuit.

The lawsuit says Ilagan uncovered the alleged irregularities during a thorough review of financial information, prompted by the threat of a potential lawsuit from Shefit New York minority shareholder Jeffrey Aronsson related to the distribution of profits. .

A Free Press message for Aronsson left at his New York company was not returned on Tuesday.

The fired CEO claims in the lawsuit that his firing was a violation of Michigan’s Whistleblower Protection Act. He also claims in the lawsuit that the company tried to cheat him out of its full contractual indemnity, which he claims entitles him to $900,000, plus a 1.5% stake in Shefit.

Complaints of harassment, discrimination

The other lawsuit was filed by the company’s former chief marketing officer, Michelle Zeller, who was also fired in early September and now lives in Georgia.

Zeller, who is married to another woman, claims in her lawsuit that Robert Moylan made “unnecessary” references to her sexual orientation, assumptions about her sexual partners and inclinations, and mused aloud that one night in bed with him could turn his wife right.

He also called a transgender employee “it,” according to the lawsuit.

Fed up with the alleged harassment, according to the lawsuit, Zeller filed a written complaint to Shefit Human Resources in late August, an action that Zeller said in the lawsuit should be protected by Michigan’s Elliott-Larsen civil rights law.

Additionally, Zeller claims in the lawsuit that while Robert Moylan’s alleged harassment was occurring, Sara Moylan violated Michigan law by discriminating against employees based on weight.

According to the lawsuit, Sara Moylan “directly and explicitly” told Zeller in July to fire two employees because of their weight. However, Zeller refused to fire them, according to the suit, and told Moylan it was illegal to do so for such a reason.

Zeller’s own firing took place on Sept. 7 and came in the wake of HR’s complaint and its earlier refusal to fire employees, according to the lawsuit.

Zeller was only offered one month’s severance pay, even though his contract called for nine months’ severance, or $236,250, according to the lawsuit.

Separately, Shefit is facing another lawsuit filed last month by a Baltimore marketing and advertising firm, Gray Kirk/VanSant Advertising, over what the ad company says are unpaid bills totaling nearly $250,000.

Contact JC Reindl: 313-378-5460 or [email protected] Follow him on Twitter @jcreindl.

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