Todd Oldham vs. Old Navy: Appeals Court Rules in Favor of Oldham, Case Will Proceed

In this corner, the ebullient and widely loved designer, author, and television personality Todd Oldham. And in this corner, the San Francisco-based retail giant Gap, Inc., which yesterday reported yet another month of sagging global sales. The two parties shook hands back in September 2007, when they inked an agreement to make Oldham creative director of the Old Navy brand. A couple of years later, they came out fighting after Oldham sued the company for flaking on its deal, which included a licensing agreement for a Todd Oldham-branded line of clothing to be sold exclusively in Old Navy stores. Gap immediately terminated its agreement with Oldham, and the lawyers took over.

It looked like a victory for the corporate heavyweight when, back in January, a New York District Court dismissed Oldham’s complaint (on all five counts) and later denied his motion to replead the case. The plucky New Yorker didn’t give up, and thanks to Wednesday’s ruling by the Court of Appeals for the Second Circuit, the case will proceed. Oldham’s complaint, originally filed in February 2009, has been reinstated on two counts: “Old Navy’s failure to negotiate in good faith an alleged agreement to develop and launch” the Oldham-branded line to be sold at its stores and the company’s wrongful termination of the agreement for Oldham’s services as design director. That last one is rather complicated, as Gap says it had no choice but to fire Oldham after he sued. However, the designer was careful to file the suit under seal. The upshot? Stay tuned. “The ruling is a great vindication in this long ordeal,” said Oldham yesterday. “We are grateful that the court unanimously ruled in our favor and now allows the depositions of Gap CEO Glen Murphy and Old Navy President Tom Wyatt.”