Unfashionable Crisis

Dov Charney, founder, CEO and president of American Apparel, has been hailed by many anti-sweatshop activists as a pioneer in the fair treatment of garment workers in Los Angeles, in an industry notorious for substandard working conditions and abuse. It’s a reputation, along with a quality product and a sexy image, that the 36-year-old, self-described “Jewish hustler” has parlayed into a company with sales expected to hit $250 million this year. But now, a competing, unflattering reputation is beginning to overtake his good press, as allegations of sexual harassment come to light.

In one lawsuit filed in May, two former employees allege that Charney subjected them to a “sexually hostile work environment,” and that Charney’s company and fellow executives “continually, repeatedly and purposely ignored the pervasive sexual harassment at American Apparel.”

A second lawsuit, also filed in May, accused Charney, among other things, of dropping his pants in front of female employees and conducting a job interview in his underwear. The women, who worked at the company for periods of nine months to nearly two years, allege that Charney gave employees vibrators, used derogatory language toward women and asked employees to masturbate with him.

Charney denies any wrongdoing. He labels the lawsuits as shakedowns that are attempts by disgruntled ex-employees to exploit his open personality. “The only victim here, unfortunately, is the accused,” he told The Journal.

At the same time, Charney acknowledged in a series of interviews behavior that pushes the bounds of what is conventionally acceptable in a modern workplace. He speaks openly about having consensual sexual relationships at work, and claims that he is inspired to do better work when surrounded by women with whom he has relationships. More then that, he says his aggressiveness and his sexuality is the fount of his creativity — even the key to his success.

“I’m being demonized for being a human being,” Charney told a reporter. “It’s very simple…. This is 2005, sex is now part of the fashion industry. I admit I am passionate. I don’t think I go over the line. Sexuality and sexual words become part of the daily banter of work life in any free society.”

Charney’s banter, in fact, is so explicit that The Journal edited his comments for vulgarity. Many of the allegations in the lawsuits also involve profane, explicitly sexual remarks.

As Charney sees it, the bigger his business gets, the bigger a target he becomes. American Apparel, under his leadership, has become the prototype for a wildly successful, sweatshop-free business — a company that produces its goods in America, pays its workers living wages and offers them such benefits as health insurance and English classes. The company currently employs about 5,000 people, the majority of whom work out of its Warehouse Street headquarters in downtown Los Angeles.

Regardless of the lawsuits’ outcome, Los Angeles-based organizations, such as the Progressive Jewish Alliance (which featured Charney in their “No Shvitz” anti-sweatshop book) and other anti-sweatshops activists worry that the public stain on Charney’s reputation will hurt their campaign for sweatshop reform.

Even before his legal troubles, some critics had struck a cautionary note, citing Charney’s opposition to a union organizing drive and accusing him of overhyping his company as more progressive then it truly is.

Union issues aside, if Charney transforms himself from progressive poster boy to sexual bad boy, other corporate players will press their claim that “progressive” and “profits” can’t mix after all. At the very least, activists won’t be able to hold up Charney’s company as a model at the expense of appearing to condone sexual harassment.

“If the current harassment allegations against him are correct, it is a real shame, because it will tarnish the good that he’s done,” said Progressive Jewish Alliance President Aryeh Cohen, who is also a professor at the University of Judaism. “Emotional abuse is just as much of a worker-justice issue as living wages are. So if the sexual harassment allegations are correct, then he’s not doing what he claims to be doing. It would be a shame, then, if other people point at him and say [a sweatshop-free business] can’t work.”

The Art of the T-Shirt

Charney hails from a family of successful, creative Jews whose careers have embodied civic involvement and betterment. His uncle is the famous Israeli Canadian architect Moshe Safdie, whose work includes the National Gallery of Canada and the Skirball Cultural Center in West Los Angeles. His father, Maurice Charney, is also an architect, and his mother, Sylvia Safdie, an artist.

“Growing up in Montreal in the 1970s and 1980s,” Charney said in an earlier published interview, “you couldn’t ask for a better milieu to cultivate expanded and creative thinking.”

Charney has talked of launching his career in clothing as a teenager selling screen-printed T-shirts he smuggled from the United States outside the Montreal Forum. His story includes an account of having dropped out of Boston’s Tufts University to set up a forerunner of American Apparel in South Carolina, which had problems and was transferred to Los Angeles in 1997.

Through what turned out to be a genius for marketing and a passion for great-fitting shirts, Charney quickly positioned his company as the brand of choice for cotton goods worn by Gen X and Gen Y hipsters. He photographed the company’s quasi-70s porn-style ads himself, using real men and women he met, not models.

The company is now the largest in-house manufacturer of T-shirts in Los Angeles, and its retail stores are spread from Beverly Hills to Los Feliz, with dozens of retail outlets across the country and in seven countries by year’s end. In addition to the brand’s qualify, low prices and sexy image, its marketing campaign expressly promotes the company as a sweatshop-free manufacturer.

Sweatshop labor is a heated issue for Los Angeles activists, where garment manufacturing employs about 250,000, according to the California Fashion Association. Some activists say the city leads the nation in the exploitation of primarily Latino and Asian immigrants, who are forced to produce clothing under illegal conditions and for unlivable wages.

Charney says he aspired to something more humane by refining a form of “vertical integration,” in which all manufacturing, design and marketing is done under one roof, cutting down on expenses and controlling all the variables (different designer, production and marketing companies) that usually contribute to sweatshop practices.

“Vertical integration hadn’t happened on the scale that he attempted it,” said Ilse Metchek, executive director of the California Fashion Association, an industry networking organization.

“There’s always been a shooting star at any given time,” she added, referring to Charney’s sudden rise. “There’s always someone who comes out of nowhere and people say, ‘Where the hell did he come from?'”

Charney once said that he got the idea for vertical integration from seeing it done at a bagel shop in Montreal. “We’ve been able to advance a business machinery that’s really a human kind of business machinery, that can produce products that people really love to wear,” he said. “We’re a capitalist company, but we try to be a good place to work.”

Charney’s work made him almost a hero in the justice community, said activist Rabbi Sharon Brous of the IKAR Spiritual Community in Los Angeles. Brous, who also sits on the board of the Progressive Jewish Alliance, observed, “The Rabbis said of such people ‘adam chashuv shani’ — it is different with important people — those in the spotlight have an even greater responsibility to work against their inner demons, to fight for consistency.”

That’s a challenge perhaps for Charney, who explained the source of his fashion instincts to the Ottawa Citizen by thumping his chest and saying: “I know it here and in my pants.”

A Sexually Charged Workplace

The publicity tide began to shift for Charney in July 2004, after the writer of a Jane magazine profile wrote that Charney masturbated multiple times in front of her, with her consent, while she was reporting the story. Charney confirmed the encounter, saying, “It was 4 a.m., and there was alcohol, and friendship and pleasure in the air.”

“The Jane article, unfortunately, may have laid the groundwork for these lawsuits,” Charney added.

But if the former employees’ allegations — by a sales manager, a recruiter and a trade show coordinator — are true, Charney has been a lawsuit waiting to happen for some time. In the lawsuit, former recruiter Heather Pithie claims that “throughout the course of her employment,” she was subjected to “continual, repeated, egregious, sexually explicit comments, gestures and behavior.” At least once, he allegedly yelled at her: “I want you to find some hot girls: The kind of girls I am going to want to [word deleted]. He also allegedly told her to hire “any kind of _____, black, white, Asian, ooh! I love Asians, I just want to ____ them all.”

Pithie also accused Charney of simulating sex in front of her and telling her she need to stop this “feminist ____.”

Plaintiff Rebecca Brinegar’s bill of particulars include an episode in which Charney allegedly exposed himself “in the nude in front of her.” Brinegar, a trade show coordinator, claims in the suit, that she complained to her immediate supervisor, but that nothing changed. The lawsuit also alleges that there was an unreported rape of one employee by another. The unnamed alleged rapist was not Charney.

Charney, who considers himself an artist, says that the lawsuits misinterpret and misrepresent his company’s modern, creative work environment, and that he is being exploited because of his success and sexually open persona.

“The vernacular of the fashion industry should not be used as a device to extort money,” he said.

As for exposing himself, he joked: “I could pull my penis out right now, and I guarantee you no one would be offended.”

And as for allegations that he walked around the office in his underwear, Charney said, “Of course you have me in my underwear in front of high-level employees. Guess what? I design underwear!” Charney said that he thinks the culture at American Apparel is “healthy,” and he has no plans to change it.

“I never gave out sexual vibrators in my business,” Charney added. “I never exposed myself to any of these parties, and I never had sexual intentions, and I never invited anyone to masturbate with me as far as these three parties are concerned.”

That said, Charney says that he sees nothing wrong with having sexual relationships with the women who work for him: “Is it illegal to ask someone to masturbate, or to say to an employee, ‘Hey, do you want to go to a hotel or motel and let’s ____?'”

A ruling by the California Supreme Court last week could add to Charney’s worries in this respect. The case had been filed by female employees over a relationship that their supervisor had with another underling. The court ruled that the women not involved with the supervisor suffered from a hostile work environment and could proceed with claims of sexual harassment.

Charney is “not only vulnerable to a lawsuit from every woman he did have sexual relationships with, he’s also vulnerable to every woman he didn’t sleep with as well,” said Judith Kurtz, a Bay area attorney who specializes in employment discrimination. “It’s not illegal to have consensual sexual relations with employees, but there could be women who say that they feel like they didn’t have any choice. And there could be other women who say that the women who did have relationships with him gained advantages from it.”

Even if sexual favors were not demanded or provided in exchange for something, Kurtz said, it’s also illegal to “create a hostile working environment.” The allegations, if true, could certainly quality, she added.

Two of the women suing Charney, Pithie and Brinegar, are represented by feminist attorney Gloria Allred who would only say, “We look forward to trying this case in court.”

The third woman, Mary Nelson, is being represented by attorney Keith A. Fink, who characterized Charney as someone who mistakenly believes “that the First Amendment gives you a right to be a jerk.” Charney, in turn, asserts that Nelson is suing him because he didn’t renew her contract.

Charney calls his accusers substandard workers who never complained about his behavior while at the company. “It was well known that I was a pretty open person,” he told The Journal. “They just want money.”

“I’m an atheist, but I swear on the Torah, my bubbe and my zayde, that I had one fantasy about these women,” Charney said. “Want to hear it? I wanted to fire them all. I thought they were all lousy employees from the beginning.”

Charney drew parallels between his case and a lawsuit over sexually charged language in the writers’ room of the NBC sitcom, “Friends”: “You have to be able to speak freely in a creative environment, or else creativity doesn’t really happen.”

Charney likened his problems to homophobia, except in his case, “It’s sex phobia.”

Just ask Metchek of the California Fashion Association if Charney is beyond the pale. “He’s a kook, but they’re all kooks,” she responded. “They all have their own style. We have a lot of kooks in our business. He is very modern. In today’s world, and the looseness of the society of today, he is of this generation.”

She added: “You don’t see people who are not successful being sued by people who are ‘offended.’ If you don’t think that’s extortion, what is? The business community, as a community, is tired of it.”

In the end, she predicted, Charney could benefit from the furor. “Positively,” she said. “His business is up 15 percent this week. You’ve only heard of American Apparel since his notoriety.”

A Jewish Looking Glass

Despite his atheism, Charney feels sufficiently challenged to circle the tribal wagons.

“I think the Jewish community should have an inquiry,” he told The Journal. “What the hell is this? I think I’ve been an outstanding contributor to the dignity of Los Angeles. I’m committed to this city. I’m committed to my employees…. How do you think it is on a Jewish mother? It’s horrible for her to see her son facing these accusations.”

“I’ve participated with great joy in building American Apparel,” Charney added, “and I love every day of it…. I don’t think I should be cast this way as some ‘horny mack-daddy’ who humiliates women. There are some very strong women who work for American Apparel. Powerful women. More then half of the executives are women.”

That’s not enough clarity for Brous: “Let me make this clear: Everybody is flawed. But we are dealing with a person whose fame and fortune came from a public refusal to exploit workers — the very same people whom he is now accused of intimidating and abusing. That is, in my estimation, an incongruity that cannot be chalked up to ‘people are complex.’ It is utterly impossible to separate out economic and social justice — an environment of sexual intimidation is just as intimidating and abusive as a sweatshop in which a worker is afraid she’ll lose her job if she takes a bathroom break.”

The litigation discomforts anti-sweatshop activists who have supported American Apparel. They’d already had to accept Charney’s staunchly anti-union position. And for some time, a small chorus has never quite accepted Charney’s pro-labor bona fides, especially because he never submitted to voluntary inspections.

“Based on anecdotal evidence we’ve heard, he’s a cut above other manufacturers in Los Angeles, but I don’t know if he really lives up to the extravagant claims he makes,” said Richard Applebaum, author of “Behind the Label: Inequality in the Los Angeles Apparel Industry” (UC Press, 2000). “He claims to pay higher wages, a living wage, but there’s no independent evidence of it. He made insurance available to his employees, but they had to pay for it. It’s like saying something is kosher, without having a rabbi look at it.”

A research colleague of Applebaum’s agrees.

“Charney is a master PR man, a great self-promoter, a very effective entrepreneur and hustler,” said Peter Dreier, a professor of public policy at Occidental College in Los Angeles.

“The only way to know if a garment factory is ‘sweat free’ is still to look for the union label,” he said. “There are garment factories in the U.S. where employees have union contracts, get full family health benefits, decent wages, three and four weeks of paid vacations, a decent pension and respect from their supervisors. When you buy a shirt, a dress, a suit or a T-shirt from these companies, you can shop with a conscience. This isn’t the case at American Apparel.”

Metchek of the Fashion Association defends Charney’s record: “Dov’s doing the very best he can for a workforce that is working under the cloud of illegal immigration.”

However, if the harassment allegations prove out, those activists who’ve supported Charney’s business model could find themselves in a quandary.

“It is very dangerous to judge based only on allegations,” Brous told The Journal. “That said, I would personally not feel comfortable associating with someone who, when faced with these accusations, responds in such a glib and dismissive way…. If these charges are true, he has made a mockery of his supposed pursuit of justice. Needless to say, I, for one, will not shop at American Apparel until this is resolved.”

A conclusion like that could loom larger over Charney’s future then even the two lawsuits. Still, others are withholding their judgment.

“We don’t want to prejudge … innocent until proven guilty,” said professor Aryeh Cohen, who has never met Charney. But “if the allegations are right, it’s kind of tragic. It’s disappointing. Here was a model, a guy who was doing well by doing good, and he wasn’t doing so good if the allegations are right.”

Portions of this article first appeared in The Forward. Additional reporting by Jim Crogan.