Lululemon Board Dodges Suit Over Ex-CEO’s $5 Million Severance

Lululemon Athletica Inc.’s directors don’t have to face claims that they paid $5 million in severance to the company’s ex-CEO, instead of firing him over #MeToo allegations, to cover up their own oversight failures, a Delaware judge ruled Thursday.

In addition to the board, the derivative lawsuit targeted former CEO Laurent Potdevin, who was forced out in 2018 for having an affair with an employee and fostering a “toxic culture” at the clothing chain. It was filed in the Chancery Court by an individual shareholder.

The suit claimed Potdevin turned Lululemon’s leadership into a hard-partying “boys club” and “engaged in ...