American Apparel makes graphic allegations about former CEO

In an attempt to stanch an onslaught of lawsuits from American Apparel founder Dov Charney, the company filed court documents releasing a trove of lurid details about his alleged conduct at the firm.

The descriptions are among the most specific released during the year-long saga between the retailer and its former chief executive, who was suspended in June 2014 and then terminated in December.

The documents, filed Friday in Los Angeles County Superior Court, allege that Charney engaged in violent, derogatory and sexually inappropriate behavior. They were filed as part of a so-called anti-SLAPP motion, intended to halt what the company calls Charney’s frivolous lawsuits.

The accusations were vehemently denied by Charney’s attorneys.

According to the filing, Charney told accounting employees that they were “Filipino pigs … with your faces in the trough”; mimed holding a shotgun to an employee’s forehead; stored footage on company equipment of himself having sex with models and employees; and sent sexually graphic messages to employees. The filing also alleged Charney tried to destroy the evidence, telling employees to delete “naughty” messages.

American Apparel declined to comment beyond the filings. But in the documents, the company said that Charney should be barred from filing more lawsuits because the evidence cited in the lawsuit proves he was fired for good cause.

Charney’s attorneys counter that the Los Angeles company is “desperately trying to distort public attention to the fact that Mr. Charney’s firing was illegal.”

“The company has knowledge that much of this information and allegations are completely false,” said attorney Keith A. Fink in a statement.

Michael Chasalow, a business law professor at USC’s Gould School of Law, said the inclusion of graphic statements attributed to Charney could support American Apparel’s argument that it did not defame Charney.

But the extreme level of detail wasn’t necessary, he said, and such alleged statements could have been dealt with confidentially, leading Chasalow to call the company’s motion an “aggressive legal position to try and knock down the adversary.”

“I think what they are really trying to do is to make it clear to him that they were willing to play hardball,” Chasalow said.

American Apparel filed its motion Friday in response to a defamation suit Charney’s team filed in May against the company and its chairwoman Colleen Brown. The May complaint alleged that Brown falsely informed American Apparel employees that Charney had agreed in writing never to return to the company in any capacity.

Later Friday, without referencing the anti-SLAPP motion, Charney filed another defamation suit against the company and former board member David Danziger, alleging that they lied to prevent him from winning the necessary votes to reclaim control of the company.

Brown, in a statement included in Friday’s filing, said the evidence of Charney’s sexual misconduct and employee abuse was “voluminous.”

Among her allegations: that investigators found videos and photos of the then-chief executive “engaged in all manner of sexual behavior with numerous models and employees, which for some incredible reason had been saved by Mr. Charney to the company’s network server by him with the use of his company computer.”

At least one of those encounters seemed to have occurred in his office at American Apparel’s downtown Los Angeles headquarters, according to Brown. Brown also alleged Charney sent inappropriate messages and files to employees, including nude photos, infantilized women, and made graphic sexual suggestions.

The behavior led the company to incur nearly $10 million in litigation costs through September 2014, Brown said.

In one incident, a retail store employee alleged that he was referred to as a “long-haired wanna-be Jew” by Charney, who also allegedly suggested, in an expletive-peppered tirade, that the employee was homosexual, according to Brown’s testimony. Then, Charney allegedly attempted to strangle the employee with his hands and rub dirt into his face.

Fink, Charney’s attorney, questioned the veracity of Brown’s and American Apparel’s claims.

“The answer is simple: these events either didn’t happen, were irrelevant (e.g. such as the blog which the company approved based on the First Amendment) or were of a personal nature (such as an amorous message only discovered when the company broke into Mr. Charney’s e-mail),” Fink wrote.

Chasalow, of USC, said American Apparel probably was also trying to frame Charney as the bad guy to the public and may also be employing a settlement strategy. But Charney, he said, “doesn’t seem like a guy that is going away.”

“At worst, it’s going to make him think twice before pushing the defamation suits and, at best, soften him to a compromise,” he said. “It might take some wind out of his sails.”

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