The lawsuit has been filed by Ian Jack Miller who worked as the company's General Counsel from January 2008 until March 2015, serving as Zara's only in-house attorney throughout the United States and Canada.
The lawsuit, filed in the Supreme Court in the state of New York this week, has named Zara, Dilip Patel and Moises Costas Rodriguez as defendants.
Patel is the Country Manager for Zara USA and works at Zara's Manhattan office while Rodriguez is the former CEO for Zara USA and the current Director of Expansion for North and South America.
Miller is seeking damages resulting from his discrimination on the basis of religion, national origin, and sexual orientation, including lost compensation, back pay, front pay, compensatory damages, liquidated damages, and punitive damages, in an amount in excess of USD 40 million.
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The lawsuit alleged that Zara's senior executives, including several close confidants of Zara's founder Amancio Ortega, treated Miller's ethnic and sexual orientation "as a strike against" him.
"Supervisors and colleagues sent Miller homophobic emails, made anti- Semitic remarks in his presence, and boasted that Spanish employees enjoyed more job security than employees of other nationalities," the lawsuit said.
"The overriding message of these actions and communications" was that Miller was an "outsider" who was unwelcome at Zara.
Miller said in the lawsuit he was unlawfully fired from the company in March 2015 shortly after his counsel wrote to the company and raised concerns about unlawful discrimination and retaliation.
The lawsuit said several of the individuals who were primarily responsible for discriminating against or harassing included Patel and were installed personally by the Ortega.
It added that Patel is a "friend" of Ortega and was installed by him personally in 2013".
It also alleged that Patel had a strong personal connection to the company's founder and as a "result of this personal connection, Defendant Patel engaged in discriminatory and harassing conduct with impunity.