In a statement released to the Los Angeles Times, the company did not specify the reason for Charney’s removal. The Times reported that the board’s action suspends Charney effective immediately because his contract requires a 30-day waiting period before termination.
Here’s what you need to know:
1. Charney Was Accused in 2011 of Using an Employee as a ‘Sex Slave’
Charney has been accused of sexual harassment multiple times in the past, including in a 2011 lawsuit in which former employee Irene Morales claimed Charney used her as a “sex slave.”
A Brooklyn judge later threw out the suit.
The New York Post reported at the time:
Morales, 21, sued the kinky clothing kingpin last year, saying he began sexually harassing her when she was 17, and marked her 18th birthday by answering the door in is skivvies and sodomizing her. The suit said Morales was “held prisoner” in Charney’s Manhattan pad for hours as she was forced to pleasure him sexually.
Four other women filed a lawsuit alleging sexual harassment shortly after the suit, including Kimbra Lo, who made the following claims, according to the New York Times:
In the interview, Ms. Lo claimed that Mr. Charney, wrapped in a towel, invited her to his bedroom to talk about a job. Once there, she said he undressed her and tried to have sex. Ms. Lo said she sought to resist but was afraid, and that he tried to take photographs.
2. An American Apparel Factory Worker Died in 2011 After Being Crushed by a Knitting Machine
A company factory worker died in 2011 after he was crushed by a circular knitting machine.
According to an Orange County Register story at the time:
Tuan Phan of Garden Grove died at 3:12 p.m. Friday at the West Anaheim Medical Center in Anaheim, about 30 minutes after the machine operator was crushed by a circular knitting machine, according to the injury description on the coroner’s website.
The incident happened at American Apparel, 12691 Pala Drive # B, in an industrial area in Garden Grove, according to Metro Net fire dispatch. Fire personnel responded to a 2:39 p.m. call of a person stuck in a machine.
3. In 2012, Charney Was Accused of Rubbing Dirt in a Store Manager’s Face
In 2012, Charney was accused in a wrongful termination suit of choking and rubbing dirt in the face of a former store manager in Malibu. Charney also allegedly called the employee “a wannabe Jew,” a “fag” and asked if he was sleeping with a certain girl. The company denied the allegations.
4. Charney Prided Himself on Clothing That Was ‘Made in the USA’
Charney describes American Apparel’s “Made in the USA” mantra as follows on his website:
A lot of the people that supported “Made in USA” clothing production support protectionism. But I am not a protectionist. I really believe that Free Trade is positive. With a little innovation, anyone can win, especially in fashion. Simple, less expensively made garments can often be more valuable than more baroque and expensively made products.
5. American Apparel Has a History of Financial Struggles
American Apparel has been on shaky financial ground at various times over the past five years.
In 2010, the New York Stock Exchange sent American Apparel a letter threatening to delist the company’s stock after the company said it might have to file for bankruptcy.
In 2009, shareholders filed a lawusit against company management alleging it had lied about hiring practices after the company fired 1,500 employees after a probe of the employees’ immigration status.
Although executives initially told shareholders the 2009 investigation by the U.S. Immigration and Customs Enforcement would not have a material impact on the company, the dismissal of over 1,500 workers set in motion a series of operating losses and plummeting profit margins.