Reformation internal investigation finds workplace culture and ex-CEO Yael Aflalo 'not racist' — despite rampant allegations of discrimination from current and former employees

• An internal investigation at Reformation published last week found the "workplace culture is not 'racist,'" and asserted it "did not find any evidence that [former CEO and founder Yael Aflalo's] conduct toward any Reformation employee was racially motivated."
• The report — conducted by the law firm Morgan, Lewis, and Bockius LLP and involving interviews with 47 employees — comes five months after a series of allegations against the buzzy "cool girl" brand for systemic racism and discrimination stemming from the top.
• However, the investigation did cite various workplace issues tied to an overall lack of transparency, inadequate human resources, and a "cliquish" culture that has caused some employees to "feel less included."
• "Reformation is addressing these issues through a range of actions, which focus on instituting HR processes for operational improvement, fostering an environment of growth and development, and creating a culture of respect, accountability, and inclusion," the company said in a statement.
• Business Insider previously reported claims of a toxic culture of racism that pushed out, silenced, and degraded Black employees at Reformation.

Five months after allegations of discrimination erupted against Reformation and the fashion brand's former chief executive Yael Aflalo, findings from an internal company investigation released last week claim otherwise.

The report — which was conducted by the Chicago-based law firm, Morgan, Lewis and Bockius LLP and included interviews with 47 employees — concluded that "the Reformation workplace culture is not 'racist,'" and asserted it "did not find any evidence that Ms. Aflalo's conduct toward any Reformation employee was racially motivated."

"We did not find the Reformation workplace culture to be racist," the report states. "Nor did we find that its former CEO — or, furthermore, that its current CEO — are racist."

Read more: Reformation's CEO and founder just resigned — 12 employees claim the company has a 'horrible' culture of racism that pushed out, silenced, and degraded Black employees

The findings fly in the face of claims of racism stemming from the top at the buzzy "cool girl" brand shared both publicly on social media and with Business Insider earlier this year.

Reformation first came under fire after former employee Elle Santiago detailed her experiences at Reformation on Instagram in June, inspired by Black Lives Matter protests in the wake of the killings of George Floyd and Breonna Taylor.

In her viral post, Santiago said she was passed over for promotions in favor of white employees, experienced discriminatory behavior from Aflalo and other executives, and started to develop panic attacks due to issues at work.

The Instagram prompted subsequent calls for a boycott of Reformation, including at retailers like Nordstrom, which made a statement at the time that it was investigating the allegations because it "does not tolerate discrimination of any kind and that extends to our partners." (Nordstrom is still currently selling Reformation products.)

"The foundation at Reformation is rotted in prejudice and poor leadership," Santiago wrote in an email to Business Insider in June. "Accountability goes for everyone who plays a role in the mistreatment of others. Employers need to take real responsibility for how they affect not only the livelihood but also the spirit of their employees."

In a statement to Business Insider, Reformation emphasized the report's conclusion that its workplace culture is not racist, while noting "there has not been a strong enough recognition of the importance of people, namely the employees at Reformation, and that has had negative impacts on the workplace culture."

"Reformation is addressing these issues through a range of actions, which focus on instituting HR processes for operational improvement, fostering an environment of growth and development, and creating a culture of respect, accountability, and inclusion," the company said in a statement.

Though Aflalo stepped down shortly after the allegations emerged in June, concerns surrounding her had been mounting. A former digital marketing employee who left Reformation in 2019 told Business Insider in June that the culture was "toxic" and "horrible," with a pervasive "mean girls" attitude that came directly from top executives like Aflalo.

While the report acknowledged personal issues between employees and Aflalo, it stated "employees who commented on this subject said that they do not believe that Ms. Aflalo is racist," noting that "various employees of all racial backgrounds reported, in similar fashion, that she had treated them in ways that were upsetting to them."

Beyond Aflalo, the investigation detailed workplace issues tied to an overall lack of transparency, inadequate human resources services, and a "cliquish" culture that has caused some employees to "feel less included." It also noted a lack of attention to several facilities-related complaints related to heating, cooling, and water infrastructure at Reformation stores. Employees at the New York City and Los Angeles flagship stores told Business Insider in June that they experienced several issues on the job, ranging from freezing temperatures that required staffers to wear coats indoors to overflowing plumbing, adding that their reports of these incidents largely went unheard from upper management."

Morgan, Lewis, and Bockius LLP wrote that Reformation is taking multiple steps to improve its culture, including hiring a Chief People Officer "to strengthen its human resources and employee relations functions." Reformation has also "engaged a diversity, equity and inclusion consultant to initiate foundational learning on these important topics," according to the report.