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Lawsuit has fashion mogul in spotlight

January 17, 2008|Carla Hall | Times Staff Writer

Dov Charney, founder and chief executive of casual fashion giant American Apparel, acknowledges that he has appeared in his underwear many times in front of male and female employees.

And yes, on a few occasions during work meetings, he donned a skimpy garment that barely covered his genitals.

But those events, he said, have to be understood in the context of the fashion industry.

As early as next week, Charney may find out how his explanations play in court, when trial starts in a lawsuit brought by a former employee alleging sexual harassment and wrongful termination.

The case is the fourth against him alleging sexual harassment. One was dismissed. Two others were combined and settled. He has denied the charges in all of them.

Charney's eccentric behavior in and out of the workplace has become legendary. Most notably, he masturbated in front of a magazine reporter interviewing him in 2004.

The case about to go to trial was brought by former sales employee Mary Nelson, who contends that Charney, 38, created "a hostile work environment" by using sexually explicit language and behaving in sexually inappropriate ways. During several meetings with her -- including one at his home -- he was dressed only in his underwear, the suit alleges. On another occasion, according to the suit, he appeared in a skimpier garment.

(The Los Angeles Times and other media outlets have been subpoenaed by Nelson's attorneys, who are seeking access to unpublished material. The media organizations are fighting the subpoenas.)

Nelson, 36, who worked for American Apparel for a little more than a year, claims Charney also referred to women as "whores" and "sluts" and invited her to masturbate in front of him. Nelson's suit alleges she was fired the day she consulted a lawyer.

The company contends that there was no harassment. Rather, "American Apparel is a sexually charged workplace where employees of both genders deal with sexual conduct, speech and images as part of their jobs," Charney's lawyers said in court documents.

Indeed, sexually suggestive marketing is part of what has propelled American Apparel's rapid growth in the T-shirt and cotton fashion market.

The provocative photos Charney shoots of young men and women wearing American Apparel clothing are featured in the company's ads and on its website.

And young shoppers have responded, snapping up the company's close-fitting soft jersey T-shirts and other cotton staples, as American Apparel stores have opened around the world.

American Apparel, which runs the largest garment factory in the United States, also earns high marks for its treatment of workers who make its clothing in a sprawling pink building in downtown Los Angeles.

The company's very success, Charney says, supports his contention that Nelson's allegations are overblown. "I'm the CEO of a public company," he said in a recent interview. "I manage 7,000 employees in 14 countries. . . . Could I have done all this where I'm inappropriate all the time? Where I'm running around in my underwear all the time?"

As creative director of the company, he appointed himself fit model, the person who tests the look and size of his men's line. He has even appeared in the ads. "I weigh 155 pounds, I'm five-10. Am I not fit? Is there any job that is not appropriate for me to do?" he said. "All the big guys did exactly what I do. Versace -- they all wore their own bathing suits."

In a deposition, he said that during the time of Nelson's employment he "frequently had been in my underpants . . . because I was designing an underwear line."

"I'm very proud of the underwear," he added.

In an interview, he also defended appearing in front of Nelson with just his genitals covered. "The demonstration of the" garment, Charney said, "was a product we were considering -- and I was in fit condition for it." He ultimately decided against putting it in the American Apparel line. "It wasn't classy," he said.

Charney's court papers portray Nelson as a poor sales rep who was frequently emotional. By November 2004, according to the papers, Nelson had earned less in commissions than the company had advanced her against those commissions.

"She wasn't performing well," Charney said in an interview. "And we were moving away from commissioned sales people."

Nelson alleges in her suit that she was fired in January 2005, but Charney says he offered to keep her on salary for three months while she looked for other work. "She disappears, never to come back," Charney said. He denies that he ever invited her to masturbate in front of him.

In an interview, Nelson's attorney, Keith Fink, disputed Charney's assessment of Nelson's performance. "If she was a bad sales manager, why did she get a raise? You won't see a single piece of paper in any of her files saying she did anything bad. . . . She was on salary plus commission. She sold more than $3 million worth of merchandise."

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