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American Apparel Battles Dov Charney With More Abuse Complaints


Two controversial apparel CEOs lost their jobs last year.
One, Abercrombie & Fitch's Mike Jeffries apparently recognized when it was finally over for him and left without creating a public spectacle.
The other, Dov Charney (pictured right), the founder of American Apparel, has been fighting tooth and nail to regain his position and control of the company he created, but it's not looking good. After his initial ouster, Charney joined forces with hedge fund Standard General in an unusual deal that combined his stock with their financial backing to regain control of the chain. Ultimately Standard General wound up supporting the board in its firing of Charney for a host of reasons, the most attention getting being his inappropriate behavior in the workplace over the years as well as allegedly misusing funds. Feeling double crossed, Charney has been pursuing legal action, but new reports have American Apparel gathering a sizable dossier of complaints from employees over the years about workplace conditions regarding their former boss's behavior. According to Bloomberg News, the complaints are recorded in e-mails as well as video and audio recordings and include incidents of Charney throwing a medicine bottle at an employee as well as calling another a "slut" and a "whore". A departing employee reportedly stated, "I’m afraid to return to work and face further abuse," in a resignation letter. An unnamed former American Apparel executive is said to confirm the reports that the former CEO was verbally abusive in the workplace causing several employees to quit as he was given to foul, derogatory language and embarrassing staffers in front of coworkers. Aside from the obvious inappropriateness of the behavior, it seems clear that Charney created a reputation for the company's workplace that made it difficult to retain highly qualified employees as well as attract new ones.
Charney denies the reports, and his lawyers are questioning the authenticity of the documents, though it is known that the company settled several sexual harassment lawsuits out of court during Charney's time running the company. What we do know for sure is that this feud is getting uglier and isn't looking like it will end anytime soon. One would have to ask the question, if Charney did somehow regain his position at American Apparel, how would he and the company look after the dirty fight that would have gotten him back there?
As the company attempts a turnaround under new CEO Paula Schneider, it's stock price has tumbled, and th  most recent quarterly reports indicate a wider loss that the company will make up for by selling stock. Charney claims that he has been pushed out because the board wants to sell the company, which it denies, but if business doesn't pick up for American Apparel, it's hard to imagine how it can remain independent for much longer.

American Apparel Has a Dossier of Complaints Against Former CEO It Can Use (Bloomberg)


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