Sports bra brand Shefit sued by 2 ex-executives

Michigan-based sports bra and women’s athletic apparel company Shefit is facing lawsuits from two former top executives alleging tax evasion, firing employees because of their weight and salacious comments from 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 Shefit’s former chief executive officer and a former Chief Marketing Officer submitted. The lawsuits also name Shefit’s founder, Sara Moylan, and her husband, Robert Moylan, who are co-owners.

Both former executives are demanding severance payments that they believe the company still owes them.

In a statement Tuesday, the company said the former executives had been “fired” by Shefit after 12 months of continuous business losses and that the allegations were “ridiculous and unfounded”.

“Shefit was founded in a basement by one 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 the baseless and predatory actions of disgruntled former executives.”

Shefit was founded 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 appeared on the ABC reality television 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 has the fit and support they deserve.”

accused of tax evasion

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

Ilagan claims he observed that the Moylans improperly reported personal expenses as business expenses, including characterizing “wasteful” personal vacations as Shefit board meetings even when no such meetings were documented, and listing personal expenses from 2020 and 2021 as debt to Shefit to avoid having to declare taxable income, the lawsuit states.

The lawsuit states that Ilagan discovered the alleged deficiencies while closely reviewing financial information prompted by the threat of a possible suit by a Shefit minority shareholder in New York, Jeffrey Aronsson, related to the distribution of profits.

A message from the Free Press that Aronsson left at his New York firm went unanswered Tuesday.

The sacked CEO alleges in the lawsuit that his resignation violated Michigan’s Whistleblower Protection Act. He also alleges in the lawsuit that the company tried to cheat him out of his full contractual severance package, which entitles him to $900,000 plus a 1.5 percent interest in Shefit.

Allegations 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 resides in Georgia.

Zeller, who is married to another woman, alleges in her lawsuit that Robert Moylan made “unnecessary” references to her sexual orientation, assumptions about her sex partners and inclinations, and mused aloud that a night in bed with him would make her wife straight could.

He also referred to a transgender employee as “it,” the lawsuit says.

Fed up with the alleged harassment, the lawsuit states, Zeller filed a written complaint with Shefit’s human resources department in late August, an action Zeller said the lawsuit intended to protect under Michigan’s Elliott-Larsen Civil Rights Act.

Additionally, Zeller alleges in the lawsuit that during Robert Moylan’s alleged harassment, Sara Moylan broke Michigan law by discriminating against employees based on their weight.

According to the lawsuit, Sara Moylan asked Zeller “directly and specifically” in July to fire two employees because of their weight. However, Zeller refused to fire her, the lawsuit states, telling Moylan that it was illegal for such a reason.

Zeller’s own termination came on Sept. 7 and followed the HR complaint and her earlier refusal to fire the employees, the lawsuit says.

Zeller was only offered a one-month severance payment, even though her contract called for a nine-month severance payment, or $236,250, the lawsuit states.

Separately, Shefit is facing another lawsuit filed last month by a Baltimore marketing and advertising firm, Gray Kirk/VanSant Advertising, alleging nearly $250,000 in unpaid bills.

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


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