• Adidas investors sue the company over the 2018 Yeezy deal with rapper Ye, formerly known as Kanye West
• Shareholders argued that the company was well aware of the individual's problematic behavior
• Adidas opted to end its partnership with Ye in October last year following the rapper's antisemitic remarks

Adidas investors filed a class action lawsuit against the company over its 2018 Yeezy deal with rapper Ye, formerly Kanye West.

The lawsuit alleges that Adidas executives were aware of Ye's problematic behavior before it cut ties with the individual in October last year following a series of antisemitic remarks. Shareholders argued in their suit, filed on Friday, that the company already knew the risks of partnering with the rapper.

Investors Sue Adidas

They argued that Adidas failed to take precautionary measures to limit negative exposure from the partnership. The suit referenced the Personnel Risk section of the 2018 Report's discussion of risk, as per CBS News.

shareholders wrote in the suit that Adidas "extolled its commitment to having an equitable workplace, and its strategic workforce management process," which was known as "People Strategy." This all came as the company failed to discuss how it ignored Ye's extreme behavior amid their partnership.

The deal between the company and the rapper was announced in November 2013, and the first Yeezys came out in February 2015. The products immediately surged in popularity even after the controversial rapper was criticized in 2018 over his slavery remarks.

In 2022, Yeezy accounted for roughly 10% of Adidas' annual revenue, said analysts in October. In February earlier this year, the company noted that it was expecting to lose roughly $1.3 billion in sales this year because Yeezy clothes and shoes would not be made available for customers.

In response to the lawsuit, Adidas officials said they rejected the "unfounded claims" against the company. According to BBC, they added that they would take necessary measures to defend themselves from the lawsuit.

Read Also: Katy Perry Urges Fans to Watch American Idol Amid Backlash 

Rapper Ye's Problematic Behavior

Despite the lawsuit and Ye's relationship with the company, he is not a party to the investors' lawsuit against Adidas. Following the announcement to cut ties with the rapper, Adidas said that it would not tolerate antisemitism or any other sort of hate speech.

Adidas added that Ye's comments and actions were unacceptable, hateful, and dangerous, violating the company's values of diversity and inclusion, mutual respect, and fairness.

A report published excerpts of an open letter written by Adidas employees, claiming that their bosses were aware of the rapper's problematic behavior but chose to turn their moral compass off amid the partnership.

The company responded to this by saying that it was unclear whether the allegations made in the letter were true. It said it opted to launch an investigation into the matter to determine the authenticity of the claims.

Adidas predicted it would lose roughly $535 million in earnings and $750 million in operating losses this year. This would be true if the company does not opt to repurpose its current Yeezy inventory, said USA Today.

Related Article: Eva Green Wins $1 Million Settlement Over Failed Sci-Fi Film