A messy story of the Hayley Paige and JLM legal nightmare
Two major things to learn from the JLM Couture Inc (wedding dress maker) bankruptcy and lawsuit with designer and influencer Hayley Paige Gutman.
-You need your legal ducks in a row before things go wrong
-If in a legal dispute - keep your emotions private
What happened?
I can’t even begin to cover everything that happened. All I can say is it got messy. REAL messy. What started as unclear ownership of social media accounts, turned into several years of ugly lawsuits and emotional trickery. This is a very brief summary of what I have learned from multiple public sources.
Hayley Paige Gutman began employment in 2011 to design wedding dresses for JLM. Gutman also created an Instagram account in 2012 which grew to over $1M followers in 2019. While these statements might not feel connected, they are the centerpoint of years of legal battles.
Gutman says in this instagram post that JLM began to overreach control into her personal life because her social media accounts were a blend of her personal and professional life. JLM wanted approval of all social posts to the social media accounts because they saw it as part of the brand they owned… aka, nothing personal posted. Near the end 2019, Gutman abruptly removed all links and references to JLM on her social media accounts. This triggered a “renegotiation” of the employment terms in 2020. Meaning, they believed her actions were in violation of her employment agreement.
According to Business Insider, “ Gutman's original agreement with JLM granted the company "the exclusive world-wide right and license to use her name 'Hayley', 'Paige', 'Hayley Paige Gutman', 'Hayley Gutman', 'Hayley Paige', or any derivative thereof [...] in connection with the design, manufacture, marketing and/or sale of bridal clothing, bridal accessories, and related bridal and wedding items,”
The original contracts are clear and absolutely skewed towards JLM in terms of control and rights. Gutman confesses she did not have an attorney review the initial contract (although this seems to also be debatable). THIS is what we need to learn. You need to work WITH an attorney on contracts. Professional advice, but also be well educated on what you are signing.
A lot of back and forth happened during 2020, and it appears mistakes from rash decisions were made on both sides. It all centered around who owned the social media accounts, and if they were personal or professional.
In December 2020 Gutman once again took off all references to JLM on her instagram account and also removed the company access. JLM then sued the designer over her use of @misshayleypage social media accounts. The lawsuit covered not only who has ownership of the accounts, but also who benefited when Gutman posted as an influencer content and ads for other companies/products.
A Temporary Restraining Order was granted which prevented Gutman from posting anything on the account that was not JLM approved. Gutman took to another social media account and announced all the things, including her resignation. The public backlash against JLM was significant.
So, things are tricky here. It’s clear JLM owned her name. What’s not clear is if they owned her social media accounts, but initially the courts gave JLM the control. Meaning, she was legally blocked from accessing her social media accounts.
In March 2021, JLM was granted a preliminary injunction that blocked Gutman from competing with the company until the end of their contract, preventing her from using "Hayley Paige" in advertising and gave JLM control of the "Hayley Paige" social-media accounts. She immediately filed a counterclaim, and the mess got worse. This counterclaim also claimed JLM CEO Jim Murphy sexually harassed JLM employees.
It just keeps going. Another lawsuit surfaced that was against Gutman’s fiance and his use of her “birth name” for profit. And yet another defamation lawsuit against Gutman based on her public statements about JLM. She was consistently on another social media channel telling all the details of the dispute. And more lawsuits, and more negative chatter on social media and publications.
In late 2023 (yes some lawsuits are still ongoing), JLM Couture, Inc filed Chapter 11 bankruptcy. Chapter 11 is a restructuring bankruptcy - meaning they get help to restructure and forgive debts, but aren’t forced to sell off what they own. JLM claims the bankruptcy was necessary and connected to the legal issues with Gutman.
In early 2024 a second appeal by Gutman was reviewed by the Second Circuit Court of Appeals regarding the ownership of her name and social media accounts. The Second Circuit vacated the order granting JLM ownership of the @misshayleypaige account. This appeals order references that social media ownership determination should follow the same methodology as any asset ownership. The original ruling was reversed and Hayley Paige Gutman was granted ownership of her social media accounts in May 2024.
While awaiting a revised ruling, Gutman also filed a motion on JLM’s bankruptcy as a “person of interest”. The motion argued that JLMs bankruptcy should be transferred to a Chapter 7 case (dissolving assets), as their litigation could possibly go on for years and would further harm JLMs finances.
Now what?
To WRAP THIS UP… in May 2024, Gutman and JLM reached a settlement agreement that was also approved by the bankruptcy court. Ownership of the name Hayley Paige and social media accounts is now with Gutman. All of it. JLM will continue through Chapter 11 bankruptcy.
Why does this matter?
This was a very nasty, public war between influencer identity and business. And a very public battle regarding contract clarity. Hayley Paige Gutman eventually won, and retains the rights to her name and social media accounts. BUT - it was a long and probably expensive mess. And it got personal.
What can we learn?
READ and UNDERSTAND anything you are about to sign, no matter how excited you are about the relationship being established.
Social media is not the place to air your dirty laundry. This battle being played out publicly made everything much, much worse.
Oh, there’s so much more.
If you want to read all the nitty gritty, this Business Insider article has it all. It’s long, and reads like a soap opera.
I am very curious. As a business owner what’s the one detail you learned that shocked you?
