Luciano Manganella’s Final Sale

Let the arbitrators tell you something: Luciano Manganella gets the money.

The contract that Manganella signed with New York & Company contained a clause mandating that any claims of a major employment breach would be decided in arbitration. In November 2006, his firing was taken up by a panel of arbitrators in New York. During the ensuing hearings, Manganella’s four accusers all testified against him. Manganella’s attorneys, in turn, challenged the women’s credibility, pointing out that Burgess, for example, did not bring up the oral-sex allegation during her first conversation with the Stier Anderson investigator. At the time, she said Manganella had commented on her breasts and would try to kiss her on the cheek. The oral-sex bombshell had only come out when she was being questioned before the arbitrators.

In the end, the panel determined that Manganella had failed to comply with New York & Company’s policy on sexual harassment. “The women employees who testified in this proceeding were forthright, courageous, and wounded by [Manganella’s] treatment of them,” they stated. “He failed terribly as a leader.”

But even so, Manganella ultimately won the suit. The decision boiled down to the fact that New York & Company should have provided him with written notice of the allegations against him and allowed him 30 days to remedy his behavior. On that technicality, he was awarded his $7 million, plus legal fees.

Now let other Jasmine Sola employees tell you something: New York & Company, not Luciano Manganella, killed the stores.

Before the sale to New York & Company, there were virtually no official company policies in place at Jasmine Sola. No employee conduct handbook. No sexual harassment training. Manganella believed he knew best, and staffers kowtowed to their boss just to prevent his notorious screaming sessions. On any given day, he could stroll in to check up on your store, decked out in a hip designer outfit. At times he was friendly. Perhaps he would compliment your new Miss Sixty skirt. But it didn’t take much to spark his wrath. If Manganella saw something or someone he didn’t like, he would roar, throw merchandise off shelves, bring employees to tears. He was known to fire people on the spot.

But—a lot of his employees loved him. More than a dozen recall him fondly. Even the singular management style, even the risqué remarks, which many took to be merely a byproduct of his avuncular personality. “I don’t think he ever meant to harm, abuse, or make people feel uncomfortable. I didn’t care, and neither did most of the other girls,” says Denise Lucciola, a former manager. Adds a current manager, “Some of the girls that were testifying against him, I wouldn’t believe a word coming out of their mouths.” Though they weren’t surprised when they heard the allegations, the majority of the women who spoke for this story said they never themselves felt ill at ease around Manganella. (“I think one person got angry, and this was all blown out of proportion,” says his mistress. Their romance ended a few years ago—their spouses eventually discovered the affair—but she refuses to believe he would attempt on other women the advances that she herself ultimately fell for.)

Former Jasmine employees reminisce about the friendly staff culture, how they were encouraged to take on as many or as few hours as they wanted, how their boss, though maniacal, was always on call. “He really cared,” says Lucciola. “He was fun—fun and crazy. I’d work for him again in a second.” Manganella’s staffers also appreciated how quickly he promoted talent. “Jasmine was great,” says one manager at the Newbury Street store. “I went from associate to key holder in three months.”

New York and Company’s management style, by contrast, was resolutely corporate. After it took over, there were fewer sales associates, fewer managers, and a strict bureaucratic hierarchy. Most buyers and merchandisers were transferred to the New York headquarters. “You had to go through 90 people to get an answer for something,” says one former Newbury Street manager, “when you used to be able to just call up Luciano.” Most of the remaining associates and managers quit soon after the buyout. The cuts and the turnover kept Jasmine Sola employees from providing the customer service that had been a point of pride for the stores. “Luciano would have 30 people working with me on a Saturday,” says Lucciola, “but once New York & Company came in there would be three of us. It was impossible to control everything. Who’s going to watch the door? Who’s going to put things away? Who’s going to help the customers? They were so cheap that at this point, we were begging for people.” Where there was once a surplus of job applicants, by the summer of 2007 Jasmine was resorting to filling vacant positions by advertising with fliers.

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