The ongoing saga of American Apparel versus former CEO Dov Charney is about to get a lot more expensive. Charney is suing Standard General, the hedge fund that now controls American Apparel, for $30 million, plus legal fees, in a case that accuses the company of defamation against the ousted CEO, reports the LA Times
Charney was fired following an investigation into his conduct last December. Today, internal documents of the investigation were leaked to the NY Post, and they contain some pretty damning evidence against Charney. According to the documents, the former CEO was sexist, racist, and overworked his employees. Human resource reports show that Charney often described employees as "sluts" and "pigs" while "punching holes in tables and throwing things." One employee claims that Charney told a primarily American-Filipino staff he was their “[Ferdinand] Marcos [a former president of the Philippines who was known for corruption and brutality]," before adding, "I will tell you what to do.” Charney also made staffers work 12-hour days and promised to fire them if they said no, according to one executive.
However, the disgraced CEO still insists that the Standard General's investigation merely created reasons to fire him. "The Charney 'investigation' was a sham, a witch hunt, a whitewash designed" by Standard General, according to court documents obtained by the LA Times. The lawsuit also claims that Standard General threatened to "destroy [Charney's] character and ruin [him]" if he refused to leave the company.
Standard General is not overly concerned with the claims or the lawsuit. "Charney and his associates continue to file frivolous, meritless lawsuits at a breakneck pace," the company said in a statement. "We are confident that Mr. Charney will be held accountable for this knowing, intentional abuse of the legal system." One such lawsuit is a completely separate one from Charney, who is suing American Apparel for $40 million due to the emotional distress he was caused.
This seems like a desperate money grab from Charney, who claims he is already broke. Even before the new startling claims above, there was already plenty of evidence, including multiple sexual harassment lawsuits and the time when he threw dirt at an employee, that could be used against Charney.
