Why Did Under Armour Executives Bring It To Court?

According to the world clothing shoes and hats net, at the end of the year,

A lawsuit was received from former executives.

Recently, Thomas Walsh, a former vice president of global store development, filed a lawsuit in the circuit court of Baltimore, claiming that Thomas Walsh had been dismissed suddenly and for unknown reasons.

To this end, he asked his employer for a total of $2 million 355 thousand in claim.

It is said that the compensation includes the $785 thousand stock reward that the company promised earlier but failed to cash in, and the claim for damages that has not been dismissed.

Thomas Walsh first filed a lawsuit with the court in November 28, 2018.

He said he had been "dismissed" in August 2018 and had not received any notice and written reasons.

The lawsuit showed that although Under Armour claimed that he had conducted an investigation into the former executive and made "vague allegations", Thomas Walsh believed that the company fired him for cost cutting.

In November 2017, when the brand performance was sluggish, Under Armour had announced a restructuring plan with a cost of $200 million, headed by Patrik Frisk, President of Patrick Frisk.

In addition to the "downsizing" of the business and some of the less efficient ones, the company also does a lot of job cuts.

Under Armour announced earlier that it will lay off about 400 people by March 2019, accounting for 3% of the world's total workforce.

The cost of severance payment is estimated to be about $10 million, which is now estimated to be between $200 million and $220 million, up from the previous 190 million to $210 million.

To this end, the indictment wrote, "Walsh believes that the company fired him for layoffs and spending cuts (including stock options), which is part of the recent restructuring plan and management changes, with the aim of completing the reorganization by firing the remaining executives."

Thomas Walsh has worked in Under Armour Baltimore headquarters for 10 years, and has been a store developer in different regions.

After many promotions, he was eventually appointed Vice President of the company in 2016.

During this period, Walsh was responsible for this.

The expansion of overseas markets in Latin America, Europe and Asia.

According to the indictment, although Under Armour did not provide a formal written agreement to Walsh, the latter claimed that the company promised to reward its stock options if it had completed its three year performance target, but until Under was fired, Under Armour failed to honour its commitments.

Because of the reason for his dismissal, Thomas Walsh used to prosecute for violation of the labor contract law of Maryland, which claimed a total of 2 million 355 thousand US dollars, including the value compensation of stock options.

At present, Under Armour declined to comment on the lawsuit.

Affected by the lack of obvious improvement in performance, since 2017, Under Armour executives have changed frequently, including executives.

Senior vice president of business Peter Ruppe, sports fashion President Ben Pruess, Asia Pacific executive director Erick Haskell, and women and youth business executives have left office.

The latest news is that in December 2018, Ryan Kuehl, senior sports marketing vice president and Walker Jones, senior director of sports marketing, were both dismissed.

Subsequently, the company confirmed that two executives had already left, but did not publicly explain why.

Reported that the Under Armour fired two people, is very close to CEO Kevin Plank executives.

According to people familiar with the matter, two executives had misconduct in such items as "sports events, giving gifts to athletes and going out for the night".

The US sports brand's layoff plan was not completed until March 2019.

It is foreseeable that in the near future, personnel changes will remain a major topic of Under Armour.

According to Under Armour's latest 2018 quarter fiscal year three quarter earnings, global sales grew 2.4% to 1 billion 440 million US dollars over the same period.

Overseas market contributed significantly, sales grew 15% to $351 million year-on-year.

But the domestic market in North America is still struggling, with sales falling by 2% to 1 billion 100 million dollars.

In December 2018, Under Armour held an annual investor conference. CEO Kevin Plank led executives to talk about the company's development prospects and strategies.

The annual dialogue did not boost investor confidence in the brand. As Under Armour lowered its profit forecast for the 2018 fiscal year, the capital market was disappointed by the company's financial objectives and North American performance prospects. On the day of the investor conference, the company's share price fell 10.5% at the close.

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