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American Apparel, LLC

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Corporate Statistics
American Apparel, LLC logo
Worker Rights Human Rights Political Influence Environmental Business Ethics

This company has Areas of Concern regarding Workers Rights and Business Ethics.

American Apparel, LLC

747 Warehouse St. Los Angeles CA USA
90021
213-488-0226
http://www.americanapparel.net

Type:

Private

La Compania Rebelde: Understanding American Apparel

by B. Dolan, Special to Knowmore.org
August 22, 2006

The CEO of American Apparel is sputtering mad, screaming into the phone at me.

"You think you're doing good... but you're... an information terrorist! I'm sorry to tell you...your hands are filthy! You fucked me! That's what you did. You fucked me and you fucked my workers!"

I try to yell over him and defend myself for a bit, but the shouting match that ensues feels sort of juvenile so I stop. Now I can only take in the show, as Dov Charney's voice cracks wildly, screaming loud enough at times to be inaudible through the receiver.

"You just... take a crap on someone's work without really knowing it... and I'm so confident of it! I'm so arrogant... you just ate the Union's crap! You rely on propaganda propagated by a corrupt union... ok... this union has shit... they've been sued... Take down the website smart man! You should be sanctioned! You are a dirty person due to your negligence!"

Five minutes in, our first interview is going great.

The aforementioned website is Knowmore.org, a corporation-watch web service I created and co-founded in 2005. Knowmore's goal is to compile and organize data about companies, while providing its readers with a Social Responsibility Profile for the brands and products they buy. The site collects tools and information consumers can use to be more critical in choosing which companies to support with their purchases, and encourages its readers to "vote with their dollar." A number of readers requested that we compile an overview of American Apparel's history and ethics. A month later the resulting profile had made its way to Dov Charney's attention.

American Apparel is the largest garment manufacturer in the United States, and as of this writing employs roughly 4,500 workers out of a single factory in downtown Los Angeles. Its growth in the past five years has been astonishing; from 2002 to 2004, the company repeatedly doubled its annual sales figures, and has opened 130 retail stores worldwide in the past three years. [1], [2]

American Apparel has garnered substantial praise, attention, and profits due to its one-time self-labeling as "Sweatshop Free." Formerly, the company's catalogue included a photographic essay of immigrant sewers and cutters at work, and nearly every company press release carried the subheading “Los Angeles Based Sweatshop Free T-Shirt And Apparel Company.” Ads, billboards and clothing tags repeated the claim, affording hipsters with a conscience the opportunity to buy a quality product from an ethical source. In 2002, Dov Charney and American Apparel sold stylish revolution to the tune of $40 million dollars. [3]

Then, in November 2003, the sweat hit the fan.

In a filing with the National Labor Relations Board (NLRB) in November 2003, the Union of Needlework, Industrial and Textile Employees (UNITE) accused Dov Charney and American Apparel of obstructing union efforts to organize workers. According to UNITE, American Apparel was guilty of union-busting activities, including the interrogation of workers about their support for a union, the solicitation of workers to withdraw their union authorization cards and threatening to close the factory if a union was formed. The company was accused of printing anti-union armbands and making employees wear them, in addition to forcing employees to hold an anti-union rally in the warehouse parking lot.

September 2004 American Apparel ad, depicts CEO Dov Charney in bed with a model and reads: "Made in Downtown LA ... Sweatshop Free - Brand Free Clothes". Click to enlarge.
September 2004 American Apparel ad, depicts CEO Dov Charney in bed with a model and reads: "Made in Downtown LA ... Sweatshop Free - Brand Free Clothes". Click to enlarge.

A no fault settlement was eventually reached with the NLRB, but one year later the "sweatshop free" claim had disappeared from company press releases and ads. Anti-sweatshop activists and organizations had begun censuring the company's actions publicly and withdrawing their support, and Charney was telling the Los Angeles Business Journal “[being sweatshop-free] is a secondary appeal and I'm getting a little bored with it... I’m de-emphasizing it.” [4], [5], [6], [7], [8]

Next, a flurry of bizarre press began appearing, casting further doubt on the company's ethics and practices.

A February 2004 article in Jane Magazine described Dov Charney as engaging in oral sex with a female employee and masturbating in front of the female reporter. [9] Later that year, Dov was quoted in the McGill Daily as saying: "Feminism is extremely restrictive. You can’t call a woman a bitch, you can’t call her this, you can’t call her that. But that’s what life’s really like. Yet she can do whatever she wants. It’s out of balance and that’s why young people haven’t embraced feminism, because it’s out of balance.” Later in the same interview, Charney is depicted as ranting about "lawsuit culture," and famously stating, "Women initiate most domestic violence." [10]

"Lawsuit culture" came home for Dov Charney in 2005, with three former female employees filing sexual harassment suits against him.

In their suits, two of the women accused Charney of exposing himself to them. One woman said he invited her to masturbate with him and that he ran business meetings at his Los Angeles home wearing close to nothing. Another employee said he asked her to hire young women with whom he could have sex. All of the women filing suit described Charney using "foul language" in their presence, much of it demeaning to women. [11]

While reporting on the suits in June of 2005, BusinessWeek spoke with seven former workers who claimed they took offense with what they called a "highly sexual atmosphere" at American Apparel. They told of senior managers who pursued sexual relationships with subordinates, and rewarded their "favorites" with promotions, apartments and company cars. BusinessWeek quoted one former employee as saying, "It was a company built on lechery." [12]

2005 American Apparel Ad
2005 American Apparel Ad

In the year that followed, Charney's legal battles, infamous behavior, and inflammatory statements in the press brought renewed scrutiny to American Apparel's notoriously risque advertising. Many commentators began drawing connections between Charney's openly sexual ethos, the charges brought against him, and American Apparel ads that often seemed to resemble amateur pornography. [13], [14], [15]

After these issues were laid out in the original 2006 Knowmore profile of American Apparel, with links provided to relevant articles and company responses for each of the charges, I was contacted by Cynthia Semon, a press agent, on behalf of American Apparel. She disputed a number of the claims made in the various articles and editorial pieces, and challenged Knowmore's committment to journalistic ethics for presenting these sources.

Ms. Semon proved to be accomodating, and spoke at great lengths about the company and its practices, as did much of American Apparel's management. Dov Charney, for his part, spoke extensively with me on several occassions. He provided his personal cell phone and email address should I have any questions, and genuinely seemed to adhere to his much touted personal transparency. Even, and perhaps especially, when he was screaming at me.

"You get on a plane! You get on a plane and come down here! Talk to the workers! If you had any dignity! If you had any integrity as a journalist you would be on a plane tomorrow!"

As it turns out, I have both. What I also clearly had was a responsibility, and an opportunity. I accepted Dov Charney's invitation and challenge. The report that follows is the result of factory visits, countless hours in meetings and interviews with workers, managers, and those in and around the conflicts. What followed Charney's call was six months in pursuit of the original goal: a profile of American Apparel, and a better understanding of the divisive company's history and ethics.

Contents


The Conflict with UNITE

UNITE: "Which Side are You On?"

"This union has shit!" Dov Charney insisted.

UNITE worker in a unionized New York garment factory. Photo: Sam Hollenshead.
UNITE worker in a unionized New York garment factory. Photo: Sam Hollenshead.

Charney, and many others who I interviewed at American Apparel, maintain that the Union of Needletrades, Industrial, and Textile Employees (UNITE) has acted as a corrupt union in the past, and offer the drive against American Apparel as evidence of such corruption. Charney and others point to the information summarized below as support for these claims, charging the organizers of the 2003 American Apparel drive with being misguided at best, if not cynical and unethical.

In the interest of presenting their views, therefore, the following history of past UNITE scandals and controversies has been included with this report.

UNITE was formed in 1995 as a merger between two of America's oldest unions. After more than 50 years of separate (and often competing) efforts, The International Ladies' Garment Workers' Union (ILGWU) and The Amalgamated Clothing and Textile Workers Union (ACTWU) faced mutual decline. From 1979 to 1995, the United States had averaged a staggering loss of 3,451 textile and apparel jobs every month. This drastic export of the American garment industry had hit both unions hard. At one time, the ILGWU and the ACTWU could claim some 900,000 members between them; by the time of UNITE's inception, their combined strength had fallen to less than 300,000. The ACTWU was in need of funds, and the ILGWU needed more members. In June of 1995, UNITE was created with the goal of an "increased organizing capacity," and a high priority on "fostering stronger links with unions in Central America, the Caribbean and Mexico," where so many U.S. garment jobs had disappeared to. [16]

Unfortunately, the union's infancy was to be riddled with controversy, which would undermine its purpose as it struggled to deal with its own failings.

In April 1997, executing a search warrant, FBI agents raided the New York headquarters of UNITE Local 23-25, carting away computers, software, and boxes of union records in search of evidence of "bribery and bribe receiving under the Taft-Hartley Act." Federal investigators, following a three-year investigation, charged the Lucchese crime family with controlling New York’s garment industry through extortion, murder, torture and arson, with the complicity of top UNITE officials. [17]

Edgar Romney, left, pictured with United Farm Workers of America president Arturo Rodriguez, center, and Unite Here hospitality division president John Wilhelm, right.
Edgar Romney, left, pictured with United Farm Workers of America president Arturo Rodriguez, center, and Unite Here hospitality division president John Wilhelm, right.

According to a government affadavit, Edgar Romney, then executive vice president of UNITE, had participated in a scheme that used the threat of unionization as a lever to extract payoffs from non-union companies. In the course of the investigation, agents had watched several illicit transactions take place, including pickups of shakedown cash by New York crime boss Joseph Gambino. In a wiretapped conversation dated May 3, 1996, mob lawyer Irwin Schlacter told Local 23-25 business agent Freddie Menau that he (Schlacter) “needed to sit down with ‘Edgar’ to discuss a couple of firms connected to the Mafia.”

Indictments were eventually handed down in the case, but solely against Schlacter and several Mafia affiliates. Despite hints of coming union indictments in the press, investigators ultimately failed to intercept Edgar Romney's alleged conversations with Schlacter, forcing them to cross his name off the list of suspects. In the end, neither Edgar Romney nor any high-level UNITE official were indicted or convicted.

UNITE's name would not be as easy to clear as Romney's, however, as 1997 was neither the first nor the last time the union's New York locals faced corruption charges. Instead, the union's troubles continued through the late 90s, as distressing reports began to surface and directly undermine UNITE campaigns.

In the midst of a 1997 campaign against Kathie Lee Gifford's sweatshop-manufactured clothing line, the conclusions of an unpublished Department of Labor report leaked to the Wall Street Journal. A survey of conditions, carried out by the department's Wage and House Division, showed that UNITE shops in New York City were predominantly sweatshops -- three-quarters of union shops were found in violation of overtime, minimum wage, or safety regulations. [18]

In December 1998, UNITE staged a holiday "Season of Concern" protest in front of Guess Inc.'s SoHo outlet. A few doors down the street, Attorney General Dennis Vacco held his own press conference. That day, the Attorney General announced to the press that he was prepared to arrest Lai Fong Yuen, a contractor who had been making clothes inside 446 Broadway for Kathie Lee Gifford, for failing to pay nearly 100 workers for 10 weeks and consistently violating state minimum wage, hour, and overtime laws. Some workers in the factory had earned as little as $1 an hour. 446 Broadway was a UNITE shop. [19]

In the summer of 1998, a Daily News reporter's investigation into the murder of an eleven year old chinese immigrant produced a shocking revelation: the murdered girl had spent her last days working in a UNITE garment factory.

UNITE worker in a unionized New York garment factory. Photo: Sam Hollenshead.
UNITE worker in a unionized New York garment factory. Photo: Sam Hollenshead.

"She was so small," one coworker recalled, "she had to rest her chin on the machine." [20]

In December 1999, The Center for Economic and Social Rights published its "Treated Like Slaves" report, revealing Donna Karan International Inc.'s violations of female workers' human rights and use of sweatshop labor. Within the CESR report, UNITE was again implicated.

The report stated that "most garment workers in NYC never see their union contracts and three quarters of unionized shops in NYC are sweatshops by UNITE's own admission."

The report quoted New York University Labor Historian Robert Fitch's argument that "UNITE is unwilling to organize and represent the interests of its mostly female immigrant rank-and-file, as it agrees to contractors' sweatshop conditions in exchange for the right to “represent” the workers (that is, collect their relatively high membership dues)."

Finally, the CESR report revealed that since 1987, UNITE had received close to $1 billion in "liquidated damages" from companies that had sent jobs overseas, none of which it had shared with its members. [21]

Meanwhile, on the opposite coast, workers in Southern California were locked in a bitter legal dispute with UNITE. On Jan. 30, 1998, former employees of Sorrento Coats, Inc. filed an action against UNITE in California state court, charging that after 42 of 50 workers in their factory voted to decertify UNITE, the union punitively destroyed their jobs. [22] Workers and their attorneys argued that the union responded to the vote by pressuring Sorrento's sole supplier of work, a unionized supplier in Los Angeles, to withdraw it's contract. The contract was withdrawn and Sorrento Coats went bankrupt, leaving its workers unemployed. [23]

Tauni Simo, the former union shop steward at Sorrento, provided the following testimony before The U.S. House of Representatives in 1998:

"About 1990 the Union came in—not by election—elections were never held. The Union formed a picket line outside the factory to make us strike. They broke factory windows and car windows, threw stones and eggs, tried to hit us with sticks, hurled insults and threatened those who worked inside. They also promised that with the Union we’d have lots of work and benefits. For the most part none of the picketers were employees of Sorrento. We did not want the Union...
When the Union came in we had to sign to join the Union, because if we didn’t sign we could not work there. This is what we were told and understood. But when the Union came in all of the customers pulled out and we lost salary and work days. Under the Union no one could make more than $5 per hour and we only worked about six to eight months out of the year. Many employees were fired or sent home because there was no work." [24]

On January 20, 2003, the U.S. Court of Appeals for the Ninth Circuit ruled in the union's favor. The court found that forcing their employer out of business did not violate the union’s "duty of fair representation" to the Sorrento employees. Though this decision legally vindicated the union, many in the pro-labor camp continue to regard the Sorrento matter as stain on UNITE's record.[25]

At the time of the Sorrento Coats dispute, not more than one percent of LA garment workers belonged to unions, and UNITE had less than 500 members in California. Most of these members found themselves unionized, not because they voted for the union, but because of "top down" agreements whereby manufacturers agree to ship their sewing only to unionized shops.

In our conversations, Dov Charney and others claimed that UNITE sought a similiar "top down" arrangement during the 2003 union drive at American Apparel, citing the union's controversial past as evidence of its duplicitous nature.

I spoke with Chris Chafe, Chief of Staff at UNITE HERE (formerly UNITE), about controversies in the union's past and American Apparel's charges of corruption.

"I think that ... Dov Charney recognizes he's in a campaign, and Dov Charney is a very good campaigner," Chafe said. "It's therefore in his interest to polarize this issue, and make himself look as good as possible and the union as bad as possible. So he wants to talk about a set of very isolated examples that represent perhaps some of the lowest points in our unions entire history, which is of course a hundred years old, and is jam packed with some of the greatest advances for working people in America's history.

"I wonder what Dov Charney would say if he walked through one of the seven or eight health and dental centers our union has built for workers in the city of New York alone, or what he would say about the housing our union has built that members and their families still live in all over New York, Philadelphia, and Chicago. ... What he is counting on is that people won't look at the fullest picture of what our union has done.

"We have dealt with the bad apples in our union," Chafe continued. "We have seen that many of them have gone to jail. To try and link this issue and that history; the worst elements of our union, who have been removed from our union ... is a disservice to hundreds of thousands of workers who make a living wage, work at a safe workplace, and have a real voice on their job."

Chafe points out that prior to its 2004 merger with HERE (Hotel Employees and Restaurant Employees International Union), UNITE voluntarily instituted its own stringent code of ethics. Upon the merger with HERE, the union again came under the perview of a public review board. "We have a third party NGO as a monitor to make sure there is no trace of misconduct amongst our leadership," Chafe told me. "We take steps constantly, not only to review these issues, but to remove people from office for any number of potential conflicts. ... Dov Charney has presented a sliver of our history; it's not irrelevant, but it's a very small set of facts.

"What happens to a worker when they dont fit into the mold at American Apparel? If they're not someone's favorite, ... what is their recourse if they've been discriminated against or harassed? That's the difference that a union makes, day to day, on the job. Knowing that you have a vehicle and a voice that is not dependent on the good will of your employer, but on your own decision of whether you have the means to action. ... When these workers retire will they have the same retirement package Dov Charney has? Low wage workers become middle class workers because they have the capacity to have a pension at a time when our country is tossing pensions out the window, along with Social Security protections. That's the difference a union makes."

Dov Charney Meets the Union


Dov Charney, American Apparel's CEO.
Dov Charney, American Apparel's CEO.

One afternoon in late 2002, a year prior to the UNITE drive at American Apparel, Dov Charney walked into UNITE's New York headquarters at 1710 Broadway, unannounced.

UNITE spokesman Steve Wishart, walking through the building's lobby at the time, by chance encountered Charney. It was the first time the two had met.

"He was in the lobby, talking to the security guard and trying to get access to the building," Wishart told me. "At the time we were running a campaign against The GAP, and he was trying to get the security guard to let him talk to the people responsible. I knew who he was, but he never identified himself to me. ... I wanted to see what he was doing there, so I offered to take him to the third floor to see the GAP campaign and meet some people."

During their elevator ride, Wishart claims Charney was full of loaded questions about UNITE. "He kept kind of being suggestive and insinuating we were this big rich union, ... asking if UNITE really owned this whole building, and if our members were allowed to just walk in."

Once on the third floor, Wishart introduced Charney to UNITE's Director of Industrial Relations, Steve Weingarten. Weingarten recognized Charney and addressed him, and the two discussed American Apparel, unionization and the labor movement.

Wishart said that Weingarten and Charney talked for about an hour at UNITE headquarters that day.

Of their conversation, Wishart said, "Dov was saying his parents kept telling him he should go union, but he wasn't sure if he wanted to unionize 'his' workforce. That's how he was, very paternalistic, ... talking about 'his' workers and 'his' factory. It never occurred to him that it should be about what the workers wanted. Steve Weingarten talked to him that day about letting union reps in to speak with workers during lunch breaks, as did United Students Against Sweatshops (USAS) later on, but Dov would never agree to [union] neutrality."

UNITE's former headquarters at 1710 Broadway. Photo: Alex Leader
UNITE's former headquarters at 1710 Broadway. Photo: Alex Leader

According to Wishart, it was this prior experience of Charney that led UNITE to approach him as a potentially hostile employer in 2003, when UNITE was allegedly contacted by American Apparel workers and began a union drive against the company.

Charney, for his part, completely disputes Wishart's version of the story. "I met [Wishart] once while passing by their headquarters. I took a pamphlet from their rack and I was invited to meet him for 5 minutes after I innocently told them I was in the garment business. They insisted I meet with them. ... [Weingarten] was a paranoid person, concerned why I was there, when I just found the place walking around. They were much more intrigued by me then I was of them." Charney also claims the UNITE reading room was open to the public, and so there was no reason that he would have introduced himself to a security guard. "The argument that I was a hostile employer because I took a pamphlet that was offered to me is a farce."

Charney also claims he had a phone conversation with USAS officers, in which he assured them he would remain neutral in the event of a union drive.

Charney did, however, admit to being personally opposed to unionization at the time. "I did see them as an adversary. They were old school. They had nothing to do with my world or what I was doing."

Still, Charney left the meeting with UNITE thinking about unionization, according to American Apparel's press agent, Cynthia Semon. Ms. Semon indicated that Charney returned to LA shortly after speaking with Weingarten and arranged a meeting with Christina Vasquez, UNITE's then Regional Vice President in Los Angeles. According to Ms. Semon, she and Dov met with Ms. Vasquez in 2002 and inquired as to "what the union could offer" to an employer that was already treating its workforce responsibly. Reportedly unimpressed, Charney left the meeting with no intention of "top down" unionizing his company.

On Nov. 19, 2002, American Apparel had sought to align itself with the Clean Clothes Connection and Peace through Interamerican Community Action (PICA), a community-based anti-sweatshop campaign run out of Bangor, Maine. In a disclosure form filed by the company, American Apparel indicated to the CCC and PICA that they would "meet a higher standard than that required by law with regard to workers' right to organize a union."

American Apparel representatives also signed a union-neutrality pledge at the time, stating, for example, that the "plant manager will tell employees about [American Apparel's] neutrality" if a union campaign began at the factory, and that they would grant union representatives "equal time" to discuss union issues with employees "during non-work hours in places regularly frequented by employees, such as break rooms and lunch rooms."

Then came the fall of 2003, when Charney, Wishart, and Christina Vasquez would meet again, and American Apparel's pledge of neutrality would become widely disputed.

Summer 2003: The Union Drive Begins

American Apparel's factory in downtown Los Angeles.  Photo: Desarae Downs
American Apparel's factory in downtown Los Angeles. Photo: Desarae Downs

If the official stories have slightly diverged up to this point, it is here where they part ways almost entirely to form the opposing sides of a bitter dispute.

UNITE claims it was contacted by about 20 disgruntled American Apparel workers, and after a brief, standard evaluation, began organizing workers throughout the summer of 2003.

During this time, the union claims it worked with a small number of employees to make lists of their fellow workers' home addresses or telephone numbers, which UNITE later used to make housecalls and speak to workers about unionization.

"We would ask one of the workers 'what are the names of the other people in your department, or the people that work around you,' and thats how we built our lists," Wishart told me.

I spoke with one American Apparel employee, provided by the union and wishing to remain anonymous, who told me union affiliated workers circulated fake petitions in order to gather signatures and addresses. "The petition said it was for something silly like to put a coke machine in the cafeteria, everyone signed and that's how we got their names and addresses," he said.

In American Apparel's version of the story however, UNITE's motives and tactics were infinitely more cynical and deceptive, and employee lists were stolen from the company. I met with Manou Vaezi, who is the former manager of a now defunct LA garment co-op called Sweat X, and is currently an American Apparel employee. During the UNITE drive against American Apparel, Manou was managing Sweat X and claims to have had a close relationship with Christina Vasquez and UNITE. He told me that after UNITE had "failed" Sweat X in numerous ways, and upon realizing the company was about to fold, UNITE had tried to unionize American Apparel in a desperate grab at adding members (and dues) in Los Angeles.

"Christina [Vasquez] was under intense pressure from [UNITE leadership in] Washington to add members," Manou told me, "The signs were clear that Sweat X was about to go out of business ... the same month that [investors] told us he would not be putting any more money into Sweat X, the union drive at American Apparel began."

This version of UNITE and Ms. Vasquez's motives was retold repeatedly as I interviewed American Apparel's upper management, as was the claim that UNITE had stolen employee lists from American Apparel. Both Cynthia Semon and Human Resources Director Kristina Moreno claim the union was in possession of workers' social security numbers during the drive, which could only have been obtained by stealing employee lists. I was never able to substantiate the claim or speak with a worker who knew of their SSI number being in UNITE's possession.

UNITE denies that employee lists were stolen as well as any connection between Sweat X's closure and the American Apparel union drive. Christina Vasquez, for her part, declined to speak with me after numerous calls and visits to her office.

In early September 2003, UNITE made public its attempts to organize American Apparel's workforce. During a "blitz weekend" drive, the union visited workers at their homes to speak about unionization, soliciting workers to sign union authorization cards. Steve Wishart led the campaign, as did Christina Vasquez, who took an unusually active role in the organizing. "Sometimes the region wont have any involvement," Wishart told me. "In this case, Christina got a little hands on. She actually went out on the case and did leafletting, worked with me to do a lot of the political stuff, and had meetings with some of [UNITE's] allies. She was involved in that manner."

UNITE authorization cards similiar to those used in the American Apparel drive.  Click to enlarge.
UNITE authorization cards similiar to those used in the American Apparel drive. Click to enlarge.

According to Wishart, all of the UNITE representatives who visited workers at their homes spoke fluent spanish, and all but one were native speakers. The union cards that workers signed were also printed in English and in Spanish; American Apparel workers who received union housecalls fully understood what they were signing, Wishart maintains.

By the end of the "blitz weekend," about 40 authorization cards had been gathered from 50 housecalls, and Charney was notified that a union drive had begun among American Apparel's workforce. A coalition of organizations and politicians had also been made aware by UNITE that a drive was taking place, including People of Faith Network, Sweatshop Watch, Sweatfree Communities, No More Sweatshops, the National Labor Committee, and Co-Op America. All parties involved in the coalition urged American Apparel to remain neutral during the drive.

Monday morning, UNITE representatives were at American Apparel's factory gate speaking with workers and soliciting them to sign union cards. The union claims it gathered about 100 cards that morning. If any miscommunication or partial understandings of unionization took place, Wishart noted, they were more likely to occur at this point. Workers on their way into the factory may not have had as much time to fully examine the cards and question union reps before signing. Still, Wishart claims workers would have understood what they were signing, however, he seemed reluctant to guarantee a flawless understanding of unionization at the factory gate.

According to Charney and American Apparel, however, workers solicited at their homes and the factory gate were falsely told: "Dov wants you to sign this card." The union lied to employees so they would sign cards, Charney claims, and the workers later reacted in outrage when they learned the truth. Wishart and UNITE deny having told workers any such thing, and charge Charney with inventing this claim.

Wishart also raised a point worth noting with regard to the number of house calls made, and union cards collected, in the early stages of the union drive. "They say we stole employee lists, but of 1500 workers at the factory, we were only able to get addresses for and visit 50 or so. If we had stolen employee lists, we'd certainly have been able to contact a much bigger percentage of AA's employees over the weekend."

The same morning cards were collected at the factory gate, UNITE called Charney to request a meeting about unionization. Charney's response was to complain about UNITE's making house calls over the weekend, and to decline the meeting.

Accusations, Confusion, and a Failed Union Drive

Pickers in the American Apparel factory assemble orders for shipment.
Pickers in the American Apparel factory assemble orders for shipment.

At this point the lines between rumor, spin, and fact blur even further.

In 2003, American Apparel's workforce was comprised of roughly 1,500 people. The majority of the company's employees were and are immigrants, any number of whom may be using false documentation by the company's own admission. This factor, combined with the precarious financial situation most workers at the factory face, leads to a highly suspicious, nervous attitude towards changes in the workplace and outsiders.

Further complicating matters is the fact that many of the company's sewing supervisors and floor managers were former sewers and cutters themselves, and had received little to no managerial training at the time of the drive.

When I visited American Apparel's factory in 2006, more than three years after the UNITE conflict, the company was preparing to release its first ever employee handbook. Kristina Moreno, head of the company's Human Resources and Risk Management department, told me American Apparel was the only company of its size she had ever seen functioning without a handbook. Ms. Moreno was hired in May 2003, and is now in the process of instating various training programs for supervisors and managers, none of which were in place prior to her arrival.

As a result of these factors, it is doubtful that American Apparel's managers and supervisors were properly trained or aware of their constraints in the event of a union drive, making American Apparel's LA factory was an environment ripe for the spread of rumors and questionable managerial conduct in 2003. The company has admitted to all of these considerations, but adds that their simple existence does not prove or disprove any of the allegations made by UNITE.

Charney has also admitted to at least one act that may be deemed questionable; he told me he "broke down crying" in front of a group of female employees during the drive, who immediately began comforting and reassuring him. "I was a little bit emotional. ... I was like crying one day," Charney told me. "We made some mistakes because we probably should've just shut up even more, or I should've said 'I'm sorry I can't comment on that but the way I am a few people are gonna ask me and I'm gonna tell them how I feel."

Memo from Dov Charney to American Apparel staff, received by Stephen Wishart of UNITE on September 26, 2003.  American Apparel denies that this letter was circulated during the union drive, and claims it is being taken out of context.  According to AA's press agent Cynthia Semon, this letter is from an unrelated period of time.
Memo from Dov Charney to American Apparel staff, received by Stephen Wishart of UNITE on September 26, 2003. American Apparel denies that this letter was circulated during the union drive, and claims it is being taken out of context. According to AA's press agent Cynthia Semon, this letter is from an unrelated period of time.

According to Steve Wishart of UNITE, however, Charney made the entire staff aware of how he felt. Wishart provided me with copies of two memos, both written by Charney and addressed to all American Apparel staff, that were allegedly circulated during the union drive. In the first memo, given to a UNITE organizer by an American Apparel employee on Sept. 26, 2003, Charney describes walking the shop floor on the previous day and talking to sewing workers about how they felt about their jobs.

After briefly acknowledging the frustrations of some employees due to frequent style changes, Charney uses the rest of the letter to plead his case. While never mentioning unionization or UNITE directly, Charney promises his workers that "the company will change dramatically and I promise the workers' conditions... will get better."

While never explicitly threatening repercussions if the factory unionized, Charney made statements in his letter that could and have been interpreted as such by workers, reviewers and outside reporters. In the memo, he mentions trouble with skeptic bankers, faulty electricity in an aging factory, lack of equipment and outdated computer systems, and claims that he can "barely go on." All of this is given as a reason workers should give him "more time."

American Apparel denies that this undated memo was circulated during the union drive, and claims it is being taken completely out of context. According to American Apparel's press agent Cynthia Semon, this letter is from an unrelated period of time during which Charney was communicating with workers about style change issues.

A memo from Dov Charney to American Apparel staff, dated September 23, 2003.
A memo from Dov Charney to American Apparel staff, dated September 23, 2003.

In a second memo, provided by UNITE and dated Sept. 23, 2003, Charney states that employees names and phone numbers have been stolen from American Apparel's information system. Charney claims the matter is under investigation, and that he is "horrified that information belonging to American Apparel employees has been threatened in this way."

Other events which took place in the weeks following UNITE's blitz remain under heavy dispute.

On Nov. 18, 2003, UNITE filed charges with the National Labor Review Board against American Apparel. According to UNITE, American Apparel had intimidated and interrogated workers regarding their union activity, threatened to close the factory if workers unionized, forced workers to attend an anti-union rally, and forced workers to sign petitions demanding their union cards back. "The intimidation was so severe," Wishart told me, "that we received over 200 requests from workers wanting their union cards back. That was more workers than there were union cards. People were so scared that they were writing to ask for cards back that they never even signed."

In two sworn affidavits presented to the NLRB, American Apparel workers told of managers calling workers to the cafeteria in groups, and "briefing" them on what would happen if the company unionized. One worker described a meeting at which Human Resources director Kristina Moreno and vice president Marty Bailey spoke, in addition to an unidentified manager named Gabriel. The worker's testimony is as follows:

"[Kristina] told us that we had seen the people outside handing out flyers. She said that they were part of a Union and we did not need a union, because the company was very good. She said the union charged dues, and asked where we thought the dues came out of. She said the dues came out of our pockets...
At this point, Gabriel spoke. He mentioned that if the Union came into the employer, it was possible that the employer would have to shut down and move locations... He also stated that the Union only wanted to take our money. He then asked who had signed the cards."

Kristina Moreno and Marty Bailey both deny involvement with any such meeting, and American Apparel maintains that these meetings never took place.

"Is it possible that managers or supervisors took groups of workers aside? Yes," said Cynthia Semon. "But at no point were we calling people down on the loudspeakers or anything of the kind."

The affidavit goes on to describe intimidation and interrogation by superiors regarding the union, including a second meeting with an unidentified manager and then-supervisor Ruben Eustaquio, during which Ruben allegedly interrogated and berated the worker for signing a union card and endorsing the union.

Eustaquio's name arose frequently in the course of my visit and inquiries, though often in drastically different contexts. According to American Apparel's management, Eustaquio's story is one of the most inspiring examples of Charney and his company's benevolence. Ms. Semon claims that Eustaquio was homeless when Charney met him, and that Charney hired Eustaquio on the spot as a janitor at the factory. After eleven years at the factory, Eustaquio now works as a customer service representative, and is by all accounts one of the company's most loyal employees.

Workers at American Apparel.
Workers at American Apparel.

But from the perspective of the three anonymous American Apparel workers presented by UNITE, one of whom I spoke with, Eustaquio was American Apparel's union-busting tool among supervisors and workers during the 2003 drive.

Though technically not management during the drive, workers told me that Eustaquio's personal ties to Charney were well known within the factory, and that "when Ruben spoke people listened" as if management was talking. In addition, workers' sworn affidavits claim Eustaquio was part of a "committee," formed during the drive, whose job it was to convince the workforce that the union should be rejected.

"Ruben was in charge of threatening people," an anonymous worker told me.

Affidavits claim Eustaquio and his committee orchestrated and played a prominent role in a controversial anti-union protest that took place in American Apparel's parking lot on Oct. 3, 2003. "I came downstairs, and saw Ruben opening a big box and passing out t-shirts to each of the workers, and telling everyone to put them on and go outside in the parking lot," one worker told me.

The t-shirts read: "American Apparel es una compania rebelde" (American Apparel is a rebellious company), and once in the parking lot workers claim to have seen Eustaquio with a megaphone. One worker's affidavit reads:

"There were sandwich boards and stickers that had anti-union sentiments written on them. Ruben said that the workers of American Apparel did not need a union. He said that we did not need any outsiders to help us get anything. He repeated anti-union statements. He told us that we had been called down for an election but that the Union had not showed up. Then Ruben started chants. He would say 'Queremos union?' (do we want a union?) and the workers would yell back 'no!'..."

American Apparel has repeatedly claimed no management was present at the rally, and that managers watched from upstairs as workers took it upon themselves to cease working and demonstrate. In addition, the company claims the t-shirts and anti-union armbands employees wore were worker-made without management's knowledge or instruction. UNITE alleges the anti-union drive and apparel were both created by management and forced on workers. Video footage of the anti-union rally has since surfaced, and played on monitors at American Apparel retail stores.

Dov Charney vs. UNITE

Christina Vasquez of UNITE HERE! speaks at a rally for No More Sweatshops
Christina Vasquez of UNITE HERE! speaks at a rally for No More Sweatshops

By the second week of the union drive at American Apparel, open hostility had broken out between Charney and UNITE. According to Steve Wishart, UNITE's coalition of allies sent American Apparel a private letter during the second week of the drive, asking American Apparel to respect workers' right to organize. Charney responded by calling each of the coalition members personally and inviting them to visit the factory and speak with his workforce.

In late October, a group of anti-sweatshop coalition members did visit American Apparel and tour the factory. The delegation was comprised of Bjorn Claeson of Sweatfree Communities, Erica Zeitlin of No More Sweatshops, Victor Narro of Sweatshop Watch and David Dyson of People of Faith Network. All four visited American Apparel's factory and talked with workers both during and outside of work. Their conclusion, which they notified Charney of in a private letter, was that American Apparel workers could benefit by belonging to a union.

Upon receiving the letter, Charney reportedly continued to pursue dialogue with coalition members aggressively and argue his points. "Dov would not leave me alone after that. Everytime he was [in town] he would be calling me up, asking me to go out to dinner. I couldn't get rid of him after that. All he wanted to do was talk about the union thing with me," said one member of the coalition. In fact, the coalition member declined to be named in this article, lest "Dov starts calling me all over again and starting up with this."

"Dov wants to create his own world [at American Apparel]," continued the coalition member. "He doesn't want anyone to come between him and 'his workers'. American Apparel is not a company we would campaign against, but they're not a company we would support either."

At the end of the drive's second week, Dov Charney and Cynthia Semon again met with Christina Vasquez in a closed door meeting. Ms. Semon made several serious allegations regarding this meeting, which can neither be proven nor disproven. Chiefly, Ms. Semon alleges that Christina Vasquez privately admitted that the entire union drive was "about getting Dov's stamp of approval" and getting Charney to sign a contract to "top down" unionize his entire factory. "They wanted Dov to be their poster boy, and Dov said 'no way'," Semon said.

I also spoke with Kimi Lee of LA's Garment Worker's Center, an organization unaffiliated with American Apparel and familiar with UNITE, who repeated this claim. "The union tried to just force Dov to sign a contract, which neglects the workers voice," Ms. Lee said.

Christina Vasquez, as stated earlier, has declined to comment on this or any matters related to American Apparel.

Charney's response to Vasquez's alleged offer was to call for a union election among American Apparel's workforce the following week. The union declined to hold an election, claiming Charney had already swayed employees attitudes with his anti-union campaign, and instead filed the infamous complaint with the National Labor Review Board. In the course of the NLRB proceedings, Charney challenged UNITE's then president Bruce Raynor to a public debate on the matter. Raynor declined.

Conclusion

Flyer for LA's Garment Workers Center's annual May Day event.
Flyer for LA's Garment Workers Center's annual May Day event.

Both Dov Charney and Steve Wishart of UNITE have admitted to making mistakes during the 2003 union drive. Three years later, the resulting debacle has served neither UNITE, American Apparel, nor L.A. garment workers in the least.

American Apparel has continued to make incredible strides in the benefits it provides to its workforce, and intends to continue doing so. UNITE has since merged with HERE, and by all accounts has affected extremely positive change in the hotel and laundry workers industries. As for the garment workers of L.A., theirs is the real loss: as of this writing there are an estimated 90,000 garment workers in Los Angeles, and less than 1% are represented by unions.

LA's Garment Worker's Center is an organization that has been created to fill the void left by traditional unions in Los Angeles. The center hosts monthly educational workshops that explain issues such as wage and hour laws, health and safety regulations, and discrimination. In addition, garment workers can visit the GWC to receive help with work problems - if they have been withheld pay, if they were fired unfairly or if their company is engaging in discriminatory or dangerous practices.

I spoke with Kimi Lee, Executive Director of the GWC, about UNITE's failed union drive at the company. As someone who has worked closely with American Apparel employees outside the workplace, and witnessed the events of 2003 as a third party, Ms. Lee's perspective is extremely valuable.

"I think there was and is room for a union at American Apparel, or some kind of worker committees or collective representation," Ms. Lee said. "But if UNITE or any union were serious about unionizing American Apparel they would be having lots of house meetings, saying to workers 'your boss isn't evil, but collective bargaining is a good thing.' The workers there don't need to be flyered and treated like their boss is running a sweatshop. ... People like this boss, but things there could be better. If you're going to go in there your message better be at least recognizing that people like him. But when the union went in, they didn't take that approach. They treated it like a typical shop. You can't just plug in the old school model at American Apparel, ... so then what you saw in two days was a thousand workers signing a petition against the union. In two days, you might be able to force some workers to sign but not all of them. ... They couldn't have forced that many people to sign that fast."

"Then, the union tried to just force Dov to sign a contract. Which neglected the workers voice," Ms. Lee continued. "The union didn't want an election anymore [following the events and confusion of the drive], which is understandable, but then the union just wanted the management to sign a contract. Ultimately, the union didn't invest enough to work and educate the workers in this situation."

On Jan. 30, 2004, American Apparel reached a no-fault settlement with the National Labor Relations Board. The settlement neither implicated or absolved American Apparel from guilt, but simply stated that the matter would be dismissed if American Apparel agreed to post in its factory a notice to employees regarding union neutrality. American Apparel complied and on May 10, 2004, the case was dismissed.

Since the UNITE conflict, various organizations have disputed AA's "sweatshop free" claim, including the Clean Clothes Connection and Sweatfree Communities. In some cases representatives of these organizations have visited American Apparel, toured their facilities, and spoken with their workers. In other cases these organizations have not had first hand experience with the company, and appear to be acting out of blind solidarity with UNITE and preconceived notions based on the rumors and reputation of Charney.

Ultimately, important work remains to be done at American Apparel and, perhaps more importantly, in LA's garment industry. Three years later, the UNITE/American Apparel controversy needs to be "un-spun," honestly analyzed, and moved past.

In the course of our interview, Charney promised neutrality should American Apparel workers desire to unionize in the future.

Worker's Rights at American Apparel

A sign posted in the lunchroom at American Apparel's factory informs workers of their benefits.  Photo: Desarae Downs
A sign posted in the lunchroom at American Apparel's factory informs workers of their benefits. Photo: Desarae Downs

At the time of the UNITE union drive in 2003, American Apparel workers were making an average of $7. The company offered Health Benefits to workers at $60 per family, per week, and $8 a week for a single person. Workers received no paid sick days, vacations or holidays.

Following the NLRB settlement in January of 2004, some paid sick days, vacations and holidays were added.

Since 2003, the company has nearly doubled its profits every year, and the workforce it employs has nearly quadrupled. Correspondingly, benefits to American Apparel's workforce have grown with the company.

As of this writing, average pay for an employee on the sewing floor is $12.50 an hour, with some sewers earning as much as $18 an hour. Base pay at the company is $8 an hour. Workers have access to company-subsidized health insurance for $8 a week with the same benefit available to spouses. Health insurance for each of a workers' children costs $1-$3 per child, per week. The company also offers dental insurance for less than $1 a week per employee, and is about to begin construction of an on-site clinic where workers and workers' families can be treated.

"For a worker in our factory riding the bus to work, it's often half a day's journey from bus to bus to visit a doctor," one manager told me. "That's also a whole day they have to take out of work. ... By building a clinic on site we'll cut down on all of that."

Therein lies the philosophy that seems to infuse the entire company: by recognizing the symbiotic nature of company and worker, and actively seeking to benefit both equally, American Apparel succeeds where others fail. Vice President Marty Bailey told me, "If we can make the people within this company succeed, they will make the company succeed."

Since being hired in 2002 to revamp the company's manufacturing process, Bailey himself played an important part in boosting profits and employee earnings at American Apparel. Under Bailey's guidance, the company switched in 2002 to a custom designed "modular" manufacturing system. In the modular (or "team") system, employees on the sewing floor are placed in teams of 8-10 closely grouped sewing stations. Each worker in the team repeats a step in the garment's production, and each team produces complete garments from start to finish.

Some of the fastest teams in the factory complete a finished garment every six seconds, according to Bailey.

Cutters at the American Apparel factory.
Cutters at the American Apparel factory.

The sewing floor at American Apparel's factory is overwhelming, frenetic, and ruthlessly efficient. Everywhere you turn, teams are bent at their machines keeping an astonishing pace. Some workers wear headphones, and many wear scraps of cloth over their noses to protect their breathing. Near the center of each group, usually posted high on a beam, is a clearly visible dry erase board filled with numbers.

The numbers on the boards represent how many garments the team produces each hour, how many garments the team aims to produce each hour, and the equivalent in hourly wages earned by each team member throughout the day. At the beginning of each day, team members decide on hourly production and wage goals in order to measure whether they have met, exceeded or fallen short of their expectations throughout the day

If, for example, a team hopes to produce 15 garments in its first hour of work and produces only 12, the team is not penalized, but will often strive to exceed its goal for the following hour in order to meet its goal wage for the day.

Workers are initially grouped into teams according to their speed; fast workers in fast teams, etc. From then on, workers are expected to improve within their team and as a team. Supervisors first identify the weakest link in the production chain, which is usually an unnecessary movement or movements being made by a particular worker in the process. The individual is then trained to eliminate said movement, benefitting the entire team. "I have teams that have been together for five years," Bailey told me. "They wouldn't let me separate them if I tried."

In addition, the teams' dry erase boards and tallies are placed in clear sight of other teams, mainly to encourage inter-team competition. According to some workers I spoke with, this has led to tension among workers and between teams.

Workers and observers critical of the modular system told of fights breaking out on the sewing floor, teams pressuring their members to skip bathroom and water breaks to meet goals, and a highly pressurized work environment. Even a member of American Apparel's management candidly admitted that the company's work environment tests the boundaries of 'sweatshop free.'

"People are certainly being compensated fairly for their work [at American Apparel], but who's to say what a 'sweatshop' really is anyway. ... You go out on the factory floor and our workers are working hard, ... probably harder and faster than in some so called sweatshops," she said.

Kimi Lee of the Garment Worker's Center in LA told me of workers who have left American Apparel because of its "inhumane speed." As a result, the Garment Worker's Center neither supports nor boycotts the company, and stopped accepting donations from Charney. "We don't recommend workers there anymore, but we also don't dissuade them from working there. We tell them it pays well, and what kind of job it can be, and they make the decision."

According to Martin Bailey and the modular system's supporters however, the sweat is the point. "The modular system turns each team into a kind of business within the business," Bailey told me. "It puts the workers in control of their own wages and lets them set their own goals."

And the workers of American Apparel are setting, and reaching, impressive goals. As of this writing, some of the factory's experienced garment sewers earn as much as $18 an hour. The average employee on the sewing floor earns over $12.50 an hour, more than double the U.S. federal minimum wage. The company maintains a base pay of $8 an hour for some non-sewing positions, and claims to be steadily raising its lowest tier wage as the company expands. Simultaneously, workers are powering a company that has managed to compete with cheap offshore labor while competitors fold and disappear overseas; American Apparel and the workers within it are thriving.

In collaboration with the Los Angeles Unified School District, American Apparel offers free English classes to workers, and has begun building a library within the factory for workers.

The company employs five certified massage therapists who work exclusively with factory workers, free of charge, and has hired an occupational health and wellness specialist who is available to council workers.

The company offers free parking in front of the facility and subsidized bus passes for workers, in addition to a bicycle lending program for workers who can ride to work. Bicycles are repaired free of charge, receive monthly maintenance, and are available to any worker upon request, along with a lock and helmet.

During work hours, employees may go to the bathroom any time and can receive brief cell phone calls or use company telephones, free of charge, for quick personal calls. The company also offers a number of computers in and around the lunchroom, which provide free internet access to workers.

Courier at the American Apparel factory.
Courier at the American Apparel factory.

American Apparel offers employees paid days off, and has devised a system based on the number of years an employee has worked, making workers eligible for between 5-15 paid personal days off per year.

The company offers on-site check cashing when workers are paid on friday, and is currently collaborating with Wells Fargo to provide each worker with a bank card and/or free checking account. According to the company's website, most garment workers in LA use check-cashing companies to deposit their paychecks, costing each worker 1 percent to 2 percent of their paycheck. The company estimates that American Apparel employees collectively spend more than $150,000 annually on check cashing. American Apparel and Wells Fargo's free checking account program would counter this trend, and additionally provide workers with Visa Check/ATM cards, significant because they allow workers to send and spend money abroad. While American Express and Western Union often charge exorbitant fees for simple transfers in Mexico or Central America, giving workers Visa cards allows them to save on both check cashing and wire transfer costs.

Vice President Martin Bailey told me he has personally issued interest-free loans from the company to workers in personal emergencies, and the company subsidizes and has provided free lunch for workers who are in need. The company also fields a recreational soccer team, and has offered Yoga classes in the past.

I spoke with Roian Atwood, American Apparel's Coordinator of Community Relations, Organic and Environmental Programs, about the future of the company's employee benefits. He talked of plans to build a daycare, or perhaps even a middle school, on or near the factory site, and said all of these ideas and more were under active investigation by the company for feasibility.

"We want to do all of these things ... and it comes down to do we have the money," Cynthia Semon told me. "Even if you have a union telling you what benefits you have to give your workers, if you can't afford it then you can't afford it." Therefore, Cynthia maintained, as the company's profit margin expands, so will worker benefits. So far, the company's actions support this claim.

Remaining Criticisms of Worker's Rights

American Apparel workers in a module.  The team's dry erase board can be seen in this picture.
American Apparel workers in a module. The team's dry erase board can be seen in this picture.

At post-union drive American Apparel, some outstanding criticisms remain.

Workers have been complaining of favoritism within the company for years, dating back to the UNITE drive. Steve Wishart of UNITE and Kimi Lee of the Garment Worker's Center both cited favoritism as a major problem at American Apparel, and Kristina Moreno of the company's Human Resources Department recognized the issue as well.

"At any given time I have a hundred workers telling me I need to get their cousin and their uncle a job," Charney said in one of our conversations.

In response to this problem, the company claims to have created a list of names for future hiring. New workers are reportedly hired from the list in the order they are listed, and no name is allowed to advance up the list faster than others.

In a lawsuit filed in 2005 against American Apparel, former employee Mary Nelson claims the company violated wage and hour laws by designating and treating her as an "independent contractor." I spoke with Keith Fink, legal counsel for Mary Nelson, about his clients' charges.

"American Apparel gave Ms. Nelson an office, supervisor and assistant," Fink said. "They gave her health insurance, and gave her a cell phone ... [They] gave her job tasks, put her on employee rosters, and had her fill out employee expense reimbursement forms."

Still, Fink claims, American Apparel designated Ms. Nelson and employees like her as "independent contractors" in order to cheat these employees of benefits and the government of taxes. Fink also claims that since the filing of Ms. Nelson's lawsuit the company has changed many independent contractors' status to that of employees.

American Apparel claims it is standard fashion industry practice to treat salespeople as independent contractors, and that no laws are broken in doing so.

Concern about American Apparel's treatment of employees also surfaced in 2005 following the leak of a letter of resignation from the "longest standing [American Apparel] retail employee in Canada," addressed to Charney and much of the company's upper management. In her March 2005 letter, obtained by The Consumerist blog, then-manager Laurelle Miciak complained of "discrepancies regarding [American Apparel]'s treatment of employees," and a "disorganization of its stock and product situation-which is as random as the company's absent (but much needed) human resources department."

The letter reads, in part:

Drastic changes in all facets of management are not "progressive" or "youth driven" or cutting edge: they are a cause for concern and stress for all employees who have to deal with it. Working under a non-system which is missing structure is not only unproductive and inefficient-its fucking anarchy. Not to say that there isn't a pecking order, though: there are plenty of girls in this company who are being compensated for whatever it is that they do well, whenever it is that they do it, I guess... The amount of people who have been promoted then demoted/fired/forced to quit because they were prematurely moved up or wrongfully chosen is simply astonishing. Perhaps this is part of AA's 'Socialist-Capitalist' fusion. Because Socialism suits the company just fine, until a personnel issue arises. ...
I was recently told that perhaps in 2-3 years, when the company has "stabilized", that I could probably be compensated for my time properly. That maybe, by that time, working between 60-80 hours a week would mean making more money than just enough to cover my rent and the bills that I have to pay. In short, I was told that I was lucky to have what I do with American Apparel right now. That running a store (small warehouses, really), managing and disciplining an entire staff, and everything in between is essentially a priviledge granted, not a position that has been earned. How's that for motivation? Trial periods vary between 2 weeks to 6 months, based loosely upon how much time they want you to spend "proving yourself" before they have to pay you at a higher rate. ...
The amount of dedication that this company expects from anybody in a management position is hugely disproportionate to the amount of money that they are forced to accept.
And then there are the complaints about senior management. The things that I know to have taken place that are lacking basic and proper professionalism are enough to embarrass and stun me into silence. They come from far and wide, tales of being granted "monetary encouragement" to leave peacefully, ie: paid off to shut up and quit. So often, whenever a retail employee has tried to take a stand for what they were promised, granted, or approved for, their pleas fall upon deaf ears.
....You can peg me right now as dramatic or disgruntled, but since working for American Apparel for the past year and a half, my 'salary' parallels that of a novice telemarketer. Getting a raise from this company is like trying to draw blood from a stone. (Except for the favorite(s)/flavour of the month, who are special. Seniority doesn't take you very far with AA.)
American Apparel prides itself on being a pioneering company. No doubt that I supported many of its initial ideas that built the foundation of its business model. But the company that looked so good on paper no longer corresponds with itself . The stores have lost concept and look like flea markets, your products have lost quality, and your business ethics are being erased and replaced with the usual corporate shtick- in short, you are well on your way to becoming another institution, and your outrageous company has become horribly predictable. In addition to this, the exploitations of the cultures, sexual orientations, and individuality of the people featured in your advertisements only serves to show that you really don't understand what is relevant and edgy today within youth culture; your target market. You've effectively moved the exploitation of workers in your "non-sweatshops" to your own retail workers and models featured on the pages of newspapers and magazines, cashing in on what you assume a generic public will perceive as subversive and political."

Ms. Miciak goes on to describe employees being given Blackberry phones instead of pay, and alludes to the company questionably "laying off" garment workers during the previous week.

Charney expressed interest in commenting on Ms. Miciak's letter, but was unable to be reached by press time. American Apparel's press agent, Cynthia Semon, declined to comment extensively on the letter citing a lack of personal experience with the matter. "From what I understand, Laurel regretted writing the letter and was unhappy that it got circulated," Ms. Semon said. "She and Dov are friends now and they speak. She was upset at the time and chose to blow off some steam, unfortunately in a very public way."

Charges of sexual harassment at American Apparel remain unsettled, and continue to be an obvious concern for both employeess and consumers. For an in-depth report of the harassment charges brought against American Apparel and Charney, see below.

As mentioned in the previous section, American Apparel's modular system remains a point of contention for many workers. The speed it causes workers to keep and the tension sometimes created between teams and fellow employees represent the system's shortcomings in the eyes of its critics.

It is, however, unlikely that the company will alter or abandon the manufacturing system that has brought it so much success, and better training for supervisors and workers may remedy these problems in part.

When I interviewed Kristina Moreno, American Apparel's Human Resources Department was just about to publish the company's first ever employee manual. The manual, and in some ways Moreno's entire department, have been established in an attempt to institute procedure where once there was a loose system of "understanding." It appears that for years, and especially for the years Charney was present in the factory, American Apparel was run more like an idealist summer camp than a multi-million dollar corporation.

Veteran workers at the factory spoke of a time when no one brought lunch to the factory on Fridays, and Charney paid workers to cook a free lunch each week. Employees came to work one Halloween and found Charney in costume and the lunchroom decorated; Charney lived at work and treated his workers like family.

It was during this time that Charney went so far as to initiate the legal immigration process on behalf of several workers, spending thousands of company dollars and numerous years since to help a small group of American Apparel workers obtain green cards. As of this writing the company is still spending money and time to meet Charney's original promise to these employees.

The company also maintained an open door policy during this time, with workers feeling free to walk into the office of Charney or upper management at any time and voice complaints. Charney's LA home is in the same neighborhood as many of his workers, and employees reportedly felt free to visit him there during off hours to talk.

Which raises perhaps the most crucial question facing American Apparel today: having undergone explosive growth in the past four years and quadrupled its workforce, can American Apparel make the transition from a casual, "family" atmosphere to that of a larger institution, while retaining the values and spirit of Charney towards its workforce? Charney already spends much of his time outside the factory, working to open new retail stores. What if Charney were to die suddenly, or be bought out of his company? What would ensure that his non-unionized company would retain its original vision?

This question, and the question of worker's ability to collectively bargain with management at American Apparel, remain in doubt.

From Charney's perspective, both questions are answered by the "vertically integrated" manufacturing system the company employs. Vertical integration means that every step of the garment production process occurs in the company's single LA factory; from knitting and dyeing to cutting and sewing. By comparison, almost none of the retailers or manufacturers in the U.S. garment industry currently produce, at their own factories, any of the garments they sell. Many industries instead use a sub-contracting system to keep their workforces "fragmented and flexible," according to the Center for Economic and Social Rights' "Treated Like Slaves" report.

By vertically integrating his factory, Charney argues, he has given American Apparel's workers the power to completely halt his operation at any time, should they choose to.

According to the "Treated Like Slaves" report, in the sub-contracting system "workers are separated from the retailers, who are the smallest in number but exercise the most control in the industry, through several layers of sub-contractors, contractors and manufacturers ... because numerous sub-contractors may be involved in the production of even one apparel item, monitoring conditions and establishing visible links between retailers and manufacturers is difficult." The report concludes:

"The embodiment of this system is the current day sweatshop – workplaces characterized by extreme exploitation, poor working conditions, absence of a living wage or benefits, extremely long hours, intense pace of work imposed through constant supervision and the piece rate system, violation of labor laws, and arbitrary discipline. The sub-contracting system has exacerbated and spread sweatshops conditions in the U.S., especially in industries such as apparel manufacturing in New York City (NYC) and Los Angeles."

In his book Solidarity for Sale, NYU Labor Historian Robert Fitch cites American Apparel as a "sign of change" for garment workers, and notes that the company's elimination of subcontracting was once a demand of the early ILGWU. [26]

But Charney's compassion is aligned with his bottom line; vertical integration is also the company's strategy to maintain a competitive edge in the fickle fashion industry.

"There's a high cost to going offshore," Charney told 20/20 on July 31. "If you're working with a supplier in China you've got to work months in advance. ... If you're working with your own factory you can wake up and say 'let's make 10,000 tank tops today.' ... We can go to a vintage store, snap a picture of a garment that we think is hot and ... 20 or 30 days later we can have it in stores."

"Vertically Integrated" in Action, Conclusion

A 2005 American Apparel ad describes Vertical Integration.
A 2005 American Apparel ad describes Vertical Integration.

In 2002, when Martin Bailey came to American Apparel and implemented the new modular manufacturing system, the majority of American Apparel workers opposed the change. Workers feared the new system would lead to a reduction in their wages, and reacted without a union or any formal leadership. Within an hour workers had shut down the entire factory, and halted American Apparel's production entirely.

I viewed raw footage of negotiations during the strike, during which workers formed a de facto committee and bargained with Charney, or more accurately listened to Charney's pleas, regarding the modular system. Ultimately, Charney was able to end the strike by training the committee's members as supervisors in the new system and guaranteeing all workers their current salary as base pay through a trial period. Once workers were persuaded to try to the new system, their wages increased as promised and opposition disappeared.

Charney has also stated that he believes modern news media can provide the checks and balances to his company that a union traditionally would. In March 2004, American Apparel fired one of its cutting managers for allegedly extorting workers. The cutting manager contacted Channel 22 in Los Angeles, which ran the story, and a few days later the story appeared on television in Mexico.

"His first choice wasn't to run to the labor board," Charney told Salon.com. "He went to the media! He said: 'I've been fired unfairly!' Well, you can't do that when the company's offshore. If it was a subcontractor working for American Apparel, we could say we don't know anything about it, but because he has something to say against one of the great companies of L.A., the cameras were there right away, before I had a chance to wipe my ass and get out of bed. .... We're not saying it's a perfect environment here. I'm sure some workers get kicked in the ass occasionally. But at least it's in our shop. Especially in modern times, apparel is movable. With e-mail, fax machines, and logistics companies, you can move a box from L.A. to China in 20 hours. There are so few restrictions on the movement of apparel, the one thing that does ensure the workers' rights is an integrated model, especially if it's in a media environment like L.A." [27]

The 2002 strike, and 2004 firing controversy, are meant to illustrate a key point of Charney's: that American Apparel's workers do not necessarily need a union to exert power over him. Charney argues that by virtue of the system he has created, his workers are empowered. The question remains however: are they empowered enough, and is their empowerment secure?

In the opinions of Kimi Lee of the Garment Workers Center, numerous sweat-free organizations aware of the company, and this reporter, there is room for a union or permanent worker's committee at American Apparel. The creation of such a committee or union would institutionalize the existing spirit of worker empowerment at American Apparel, and ensure that spirit's survival beyond the reign of Charney or his current staff.

Just as American Apparel's Human Resources department was created to institutionalize the "open-door" policy maintained by Charney while he was at the factory, so would a workers' committee institutionalize the lessons and practices behind the 2002 strike and its resolution. The company's workforce has doubled since 2002 and continues to grow, making it increasingly unlikely that workers could spontaneously organize in the event of a dispute. By providing no formal, collective body through which workers can voice complaints, American Apparel seems to be falling slightly short in practice, if not in spirit.

Adam Neiman, CEO of rival No Sweat Apparel, had the following to say about American Apparel:

"I think the union shop is so critical here. What we're doing [at No Sweat Apparel, which sells only union-made garments] is what I'd call next-wave social enterprise. The first wave of social enterprise is really like the American Apparel model, or the Ben and Jerry's model, or the Whole Foods model -- this whole, "Oh, we're so righteous we don't need union contracts. Can't you tell? We have pony tails!" What we've found about first-wave social enterprise is that things change. As companies get bigger and the owners and founders get older, it's not uncommon for them to sell out or get bought out or change the fundamental conditions. Our point is, if you're so righteous and giving the workers a fair shake, put it writing and give them a contract!" [28]

The Harassment Question

Screen capture from a video showing Dov Charney in his underwear at the American Apparel factory.  In this video, Charney is running around the sewing floor, surprising his workers in his underwear.  The short film was originally posted on American Apparel's website, but has since been removed by the company. Click here to watch movie.
Screen capture from a video showing Dov Charney in his underwear at the American Apparel factory. In this video, Charney is running around the sewing floor, surprising his workers in his underwear. The short film was originally posted on American Apparel's website, but has since been removed by the company. Click here to watch movie.

Sex gets attention.

Dov Charney knew this when he designed his company's ad campaigns, and knew it when he began exhibiting his personal sexuality in interviews and advertisements. The CEO of American Apparel must therefore have known what to expect when four former employees brought sexual harassment lawsuits against his company, and when Jane Magazine published a graphic account of what appeared to be his aggressive sexual advances towards a female reporter.

Internal company memo from Dov Charney to employees, stating that Charney is to be sent a "head to toe" picture of all retail employees worldwide, subject to his approval and comments before they are hired.  American Apparel claims this is done in the interests of presenting a sexy, fashionable image at retail locations.
Internal company memo from Dov Charney to employees, stating that Charney is to be sent a "head to toe" picture of all retail employees worldwide, subject to his approval and comments before they are hired. American Apparel claims this is done in the interests of presenting a sexy, fashionable image at retail locations.

In July of 2004, Claudine Ko's now infamous American Apparel article appeared in Jane magazine. In it, Ko gave this account of a meeting with Charney and an unnamed American Apparel employee:

"I asked him how he relaxed. Oral sex he says, settling into a chair behind a cloud of smoke. 'I love it … I am a bit of a dirty guy, but people like that right now.'
Explaining exactly how the rest of the night unraveled is somewhat difficult. Let’s just say, the female employee helped him 'put on a show' for me. I watched, trying to be objective, detached - sorta like a … war reporter?"

Later in the article, Ko describes a trip to Charney’s home for a late night 'interview session':

Charney conducts a meeting at the corporate apartment.
Charney conducts a meeting at the corporate apartment.
"Soon enough he loosens his Pierre Cardin belt.
'Are you going to do it again?' I ask.
'Can I?' he says adjusting himself in his chair.
Charney poses in an American Apparel print ad.
Charney poses in an American Apparel print ad.
And thus begins another compulsive episode of what Dov likes to call 'self-pleasure,' during which we casually carry on our interview, discussing things like business models, hiring practices and the stupidity of focus groups.
'Masturbation in front of women is underrated,' Dov explains to me later over the phone. 'It’s much easier on the woman. She gets to watch, it’s a sensual experience that doesn’t involve a man violating a woman, yet once the man has his release, it’s over and you can talk to the guy."

In the Jane article, Ko claims that in the month she spent with Charney, she watched him pleasure himself "eight or so" times. She ends the article with a description of leaving Charney in New York, interview completed, and hailing a cab. “Then as I step into the depths of the backseat, I realize I don’t want this trip to end just yet.” [29]

In response to the Jane article, Charney claims that Claudine Ko told only half the story. "We had a relationship, you know. ... We got jiggy. It was a beautiful thing," Charney told me laughingly. "Then I see this article and she's written all these things about me."

As for Ko, she has publicly agreed with Charney's version of the story, telling one blogger after the fact, "Whenever I see a picture of Dov I can’t help but smile and think fondly of him. That reporting experience was fun, engaging, stimulating and interesting. Dov Charney is a mad man and I like that." Ko also told Businessweek magazine her relationship with Charney was entirely consensual. [30], [31]

Charney, for his part, candidly admits to engaging in consensual relationships with employees, and being open to such relationships in the future. He has repeatedly asserted in the press that consensual relationships between adults should not be restrained in the workplace. [32], [33]

It is worth noting that while it is legal for superiors to make advances toward their employees as long as those advances are welcome, the lines certainly begin to blur when power, sex, and employment are allowed to interact so freely. In Miller v. Department of Corrections, for example, The California Supreme Court unanimously held that sufficiently widespread sexual favoritism can convey a demeaning message to female employees that they are viewed by management as "sexual playthings," creating an actionable hostile work environment under California's Fair Employment and Housing Act ("FEHA"). [34]

San Francisco attorney Phil Horowitz, chair of the California Employment Lawyers Association, told Businessweek: "Any chief executive who's thinking of having sex with subordinates ought to have his head examined." [35]

It turns out Charney's head was destined to be examined by the public. In the summer of 2005, four plaintiffs filed three separate sexual harassment lawsuits, claiming that while working on American Apparel's staff they endured sexual misconduct, innuendo and an environment in which women did not feel safe.

Rebecca Brinegar's sexual harassment complaint, filed with California Department of Fair Employment and Housing.
Rebecca Brinegar's sexual harassment complaint, filed with California Department of Fair Employment and Housing.

Heather Pithie, who worked at American Apparel as a recruiter between June 2004 and March 2005, charged that Charney referred to women in vulgar, derogatory and sexual terms. She said in her suit that she was "terrified" of being alone with him, and claimed that Charney once called her into his office with a co-worker and gave them both vibrators, saying, "It's great during sex." At another time, the lawsuit claimed, Ms. Pithie was recruiting in LA when Charney instructed her to talk to a young woman because she was "hot." He offered the woman a job on the spot, she claimed.[36]

Rebecca Brinegar, who coordinated trade shows and worked in customer service between December 2002 and January 2005, charged that Mr. Charney exposed himself "in the nude in front of her," told her to "grow a dick", and told her that he "needed hotter pussy" at trade shows. Ms. Brinegar claimed that despite her complaints, Mr. Charney continued this behavior, leading to her departure from the company.[37]

Heather Pithie's sexual harassment complaint, filed with California Department of Fair Employment and Housing.
Heather Pithie's sexual harassment complaint, filed with California Department of Fair Employment and Housing.

Ms. Pithie and Ms. Brinegar both quit their jobs and filed joint lawsuits in June 2005. [38]

According to American Apparel's press agent Cynthia Semon, Charney has spent thousands of dollars litigating each of the allegations made against him because he is innocent and determined to clear his name.

The Pithe/Brinegar case was recently dismissed, with prejudice as to defendants American Apparel and Charney, in February 2006.

A second harassment suit was brought in 2005 by a former employee who had never met Charney, but claimed that she was exposed to a hostile work environment in an American Apparel retail store. Specifically, the plaintiff complained about a collage of vintage Penthouse magazine covers used to decorate the store. American Apparel responded by stating that "vintage magazine covers (which included Playgirl and news magazines such as Life and Look), were art and fashion artifacts — a celebration of sexuality, pop culture and kitsch from the 70's and 80's". [39]

A United States Federal District Court Judge entered the order in favor of American Apparel on November 3, 2005, dismissing with prejudice the case brought by the former employee, who received no money from the case.[40]

The fourth-and sole remaining-case was brought by Mary Nelson, an American Apparel sales manager from November 2003 to January 2005. Ms. Nelson claims in her lawsuit that Charney invited her to masturbate with him, used inappropriate and demeaning language in her presence, and conducted business meetings with her in his underwear. Charney, in turn, asserts that Ms. Nelson is suing him because he didn’t renew her contract, and accuses her of being a substandard, disgruntled employee.

I spoke at length with Keith Fink, legal counsel to Mary Nelson, regarding his client's case and all of the sexual harassment charges Charney has faced.

According to Mr. Fink, Mary Nelson brought suit against Charney following the January 2005 rape of an American Apparel model, committed by a fellow employee, at a company trade show in Las Vegas. After the rape occurred, Ms. Nelson was allegedly sent into the victim's room to "take care of her" emotionally, and subsequently came to believe that Charney and American Apparel were ultimately to blame for the crime.

Declaration of Heather Harris accusing Dov Charney of harassing behavior.
Declaration of Heather Harris accusing Dov Charney of harassing behavior.

"Mary had warned Dov that something like this could happen," Fink told me. "She realized this [rape] had occurred in large part due to the environment fostered by Dov hiring drug addicts, and having drugs and alcohol present at tradeshows. She spoke with Ms. Brinegar, and she and Rebecca decided enough was enough; they were going to see a lawyer. At the time they told a third employee that she should consider joining them to see the lawyer, and that third person turned out to be a stool pigeon who informed the company of her intentions to sue. ... We have the testimony of company representatives who admit that only then did they decide it was time to fire Mary Nelson; she was far from a substandard employee."

Ms. Pithie and Ms. Brinegar eventually retained Attorney Gloria Alred as their legal counsel, while Ms. Nelson chose Mr. Fink to represent her. "Gloria's clients weren't as tough as my client is," Fink said. "They sort of rode on my coat tails, used all my depositions, and didnt do any work."

Still, Fink claims, "They filed a lawsuit, and they had [Charney] dead, simply based on the evidence that I had garnered... but instead they went into a mediation, and they entered into a confidential settlement agreement. They can't talk about the facts of the cases, and they had to agree to have the suit 'dismissed with prejudice.' Now American Apparel is talking about these cases as 'dismissed with prejudice' as if that means Charney was vindicated, when in fact I'd bet they settled for hundreds of thousands of dollars to reach those decisions."

Excerpts of restraining order filed against CEO Dov Charney by Tina Pellegrino, pages 1-4
Excerpts of restraining order filed against CEO Dov Charney by Tina Pellegrino, pages 1-4

Mr. Fink claims that it is standard practice at American Apparel to pay off employees who complain of sexual harassment, and points to the case of Tina Pellegrino, a former employee who filed a restraining order against Charney, claiming he harassed, threatened and beat her, and whom Fink claims has been paid to "keep quiet."

American Apparel claims that Charney and Tina Pellegrino were friends for years, prior to the disagreement which resulted in the restraining order. Following a confrontation with Charney, Ms. Pellegrino left the company and filed the restraining order. As of this writing however, Ms. Pellegrino has reportedly mended her relationship with Charney, and has returned to work at American Apparel. She expressed interest in commenting for this article, but was unable to be reached by press time.

"I dont think you're ever going to find an individual as cavalier, and unconcerned about the laws in this country as Dov Charney," Fink said. "He views himself somewhat as a modern day Larry Flynt. ... What is truly bizarre about this is that usually in [sexual harassment] cases they're just allegations; 'he said she said.' In this case, Charney admits to most of it and claims it's his First Amendment right!"

Excerpts from restraining order filed against Dov Charney, pages 5,7,8.
Excerpts from restraining order filed against Dov Charney, pages 5,7,8.

Knowmore.org has obtained transcripts of Dov Charney, Vice President Martin Bailey, and Human Resources Director Kristina Morena being deposed for the Nelson case, in the course of which the following exchange takes place between Keith Fink and Dov Charney:

Fink: Did you ever, at work, refer to women as “sluts”?
Charney: In private conversations, where such language was generally welcome.
Fink: Do you view "slut" to be a derogatory term?
Charney: You know, there are some of us that love sluts. You know, it’s not necessarily—it could be also be an endearing term.
Fink: An endearing term. Is that something you call your mother?
Charney: No. But it’s maybe something that you call your lover.

Later in his deposition, Charney admits to using a number of explicit terms for female body parts—including the word "cunt".

Charney: During the period when she worked, did I use the word cunt?
Fink: In the workplace?
Charney: Absolutely, as she did.
Fink: I didn’t ask you if she did.
Charney: I’m telling you a little more. I’m volunteering a little more ha ha [sticks out tongue].

In the Nelson case, Charney and his lawyers are expected to argue that it is perfectly appropriate for Charney to take off his pants at the workplace. They argue that Charney is in the business of selling underwear, and also serves as a fit model for the company (hence the need to try products on at work). Charney also claims he builds enthusiasm for the product by modeling it.

Fink: At the workplace in the years 2003 and 2004 how often in the work week would you be in your underwear?
Charney: There were months I was in my underwear all the time. It became very common. ... There was a time in fact we put it on the Internet that I was running around in my underwear.
Fink: Why did you do that?
Charney: To be humorous.
Fink: And did all the employees tell you that they thought it was funny seeing the CEO walk up and down the workplace in his underpants?
Charney: We had people cheering.

In his videotaped deposition, Charney declined to answer whether he had ever had sex in the workplace, or to discuss which women in the company he’s been involved with. However, Human Resources Director Kristina Moreno admitted in her deposition that she has witnessed Charney having sex with employees on the fourth floor at the factory.

This exchange took place between Charney and Keith Fink on the subject of sex in the workplace:

Keith Fink: Now, as you understood this American Apparel policy or spirit of having freedom in the workplace, does that encompass American Apparel employees having sex at the workplace?
Dov Charney: Provided they’re in a private setting and no one else is aware of it and they’re on their break.
Fink: How about if they take their 10-minute break which the law allows them and they go into a supply closet and no one can see them and they actually have intercourse?
Charney: Well if no one could see them and or there is a reasonable expectation of privacy, I’m not going to run rush in like some Nazi and tell them to stop having consensual activities.

In a recently aired episode of Dateline NBC, a former American Apparel employee anonymously told Dateline correspondents that Dov Charney was "eager to pursue a number of his subordinates."[41]

"It was understood that Dov was looking for sex almost constantly... [and that] he was looking for sex from his employees," said the employee. "His language was constantly inappropriate talking about sex, talking about—his own genitalia, talking about—other people’s.""[42]

While the former employee acknowledged that he was fired by Charney, his account of Charney’s behavior was backed up by six other former employees Dateline spoke with, from American Apparel locations in three different cities.[43]

Charney declined to speak with Dateline, but a company spokesman said NBC's sources were “disgruntled ex-employees” asserting “blatant falsehoods under a cloak of anonymity.”

Regarding plaintiff Mary Nelson, Charney had the following to say in his deposition:

Keith Fink: Did you ever ask Ms. Nelson if she would masturbate in front of you?
Dov Charney: No.
Fink: Did you ever say to Ms. Nelson you had so much faith in her that she could come over to your house, watch TV, have a drink, even masturbate and leave, and you would still have faith in her?
Charney: I don’t recall making that statement.
Fink: Is the “don’t recall” a categorical “No,” you didn’t, or you just don’t remember?
Charney’s lawyer: Objection; argumentative.

Here American Apparel makes two arguments: First, they don’t agree Charney made the comment. Secondly, they say even as described, it’s an offhand remark and not an actual invitation. Mary Nelson claims Charney did make the comment — while they were discussing whether she would get a raise.

Print ad features Charney's exposed penis.
Print ad features Charney's exposed penis.

And finally, at issue in the Nelson case is an infamous business meeting held at Charney's L.A. home, which Mary Nelson claims to have attended.

Fink: [former supervisor Tony Augistine] recalled you wearing a sock on your penis while Ms. Nelson was in your home, is that correct?
Charney: The product is called a cock sock.

Charney says he doesn’t recall whether Ms. Nelson was present at the meeting, but he says there wouldn’t be anything wrong with wearing the item in front of her. He says he was simply modeling a potential new product.

Keith Fink and Mary Nelson claim this document shows the amount of new business brought into American Apparel in the year before she was fired. Click to enlarge.
Keith Fink and Mary Nelson claim this document shows the amount of new business brought into American Apparel in the year before she was fired. Click to enlarge.

Dov Charney and American Apparel have repeatedly claimed that all of Mr. Charney's accusers were substandard workers, who never complained about his behavior while at the company.

Charney with employees, in his underwear at the Rose Bowl.
Charney with employees, in his underwear at the Rose Bowl.

“It was well known that I was a pretty open person,” he told The Jewish 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 continued. “Want to hear it? I wanted to fire them all. I thought they were all lousy employees from the beginning.” [44]

According to Keith Fink, however, Ms. Nelson was an excellent employee and the decision to fire her was made after company executives learned she had seen a lawyer. Mr. Fink claims that Tony Augastine, a former supervisor of Ms. Nelsons, will testify to that effect. Additionally, Mr. Fink claims that Mary Nelson received a raise a few months before being fired from American Apparel.

"We can show evidence that Ms. Nelson was given a raise, from $60,000 to $70,000 annually," Fink said. "That's a problem for Dov Charney. Dov and Pat Honda have both lied and denied that Mary Nelson was given a raise. They've painted a story that is factually inaccurate and I have the paperwork to show they're lying."

Mr. Fink claims that Charney's lawyers have submitted to the court a fraudulent piece of paper which Dov knows is not contract, indicating that Mary's salary would remain the same. Fink also claims to be in possession of an actual checkstub, which Mary Nelson kept, that contradicts the false contract and shows the raise she was given months before her termination from the company.

Additionally, Keith Fink provided us with an American Apparel company printout which allegedly shows the amount of new business brought into the company by Mary Nelson in the year before she was fired.

"The printout shows Mary Nelson bringing in over 7000 percent growth on some accounts, though Dov has said she brought in no accounts," Fink said.

"What they really want to do is drag this out to 2008 and make me spend millions of dollars, and hope that we'll go away for a small settlement," Fink concluded. "If Mary Nelson only wanted money she could've snapped up settlements like the rest of the these people who've gone away. Ask them if they've ever made her an offer, see if they'll deny it. Mary Nelson doesn't want money. This is a slam dunk. Dov Charney is going down. American Apparel is going down."

Since the filing of Mary Nelson's lawsuit, American Apparel has begun requiring employees to sign an arbitration agreement. The agreement reportedly prevents workers from suing the company on the grounds of established elements in the workplace such as language, decor and behavior. While company representatives claim they are attempting to cut down on frivolous lawsuits with these agreements, critics are accusing them of silencing employees who object to inappropriate policy.

"Why are employees being made to sign arbitration agreements when Mr. Charney wants to run his company on a culture of freedom?" Keith Fink said. "Is he afraid of a jury deciding if the way he runs his business is legal in this country?"

In the course of this investigation, Knowmore.org obtained DVD video of Charney's deposition, which we intended to post online for readers to download and view. The depositions were public record at the time we obtained and endeavored to post them. Since learning of our intentions, American Apparel has sent lawyers to court to prevent the public disclosure of copies of videotaped depositions in the Nelson case. We have, however, obtained text transcripts of several depositions in the case, which are avaliable below.

Love for Sale: Criticism and Defense of Advertising

American Apparel print ad from 2006.
American Apparel print ad from 2006.

In 2005, Jason Rowe, a columnist for NYU’s Washington Square News, described American Apparel's ads as, “Photographs of young women in compromising positions, some as young as fifteen... juxtaposed alongside text giving accounts of meeting the models on the street and inviting them to be photographed... conveying the feeling of some sort of perverted conquest." Rowe called the ads "sexually exploitative" and noted that they "seem more like amateur pornography than anything else."[45]

American Apparel print ad from 2005.
American Apparel print ad from 2005.

As American Apparel's slinky ads have spread across urban landscapes, the internet, and the pages of weekly culture rags, many commentators have begun to voice similar criticism. The ads have been compared to child pornography, called "sleazy" and "creepy," and have constantly been linked with Charney's rumored sexual antics and legal battles. [46], [47], [48]

In a 2005 interview with NowToronto.com, Media Watch founder Ann Simonton called for a boycott of American Apparel products over the ads. "This is beyond 'sex sells,'" Simonton told the interviewer. "It goes to a level of humiliation." [49]

And yet the same NowToronto article found Charney's ads being defended, by porn star turned PhD sexologist Annie Sprinkle.

"I like the sweat, the grit, the reality," Sprinkle said. "He obviously appreciates female sexuality in all its glorious sleaziness. And I think you can worship female sexuality and also worship women in the workplace. If you see sex as bad, dirty, and ugly, then you're going to see these ads as bad, dirty and ugly. These ads are kind of a mirror. In a way, they're almost neutral."[50]

American Apparel ad from 2005, featuring porn star Lauren Phoenix.
American Apparel ad from 2005, featuring porn star Lauren Phoenix.

I spoke with Alexandra Sprunt, head of American Apparel's marketing department, about the ads. Ms. Sprunt echoed Annie Sprinkle's defense, explaining that many of the controversial photographs used for the ads were culled from "random shots" taken by a number of employees and their friends.

As evidence of this "random" motif, which she claimed Charney created in the company's early days, Ms. Sprunt showed me an American Apparel print ad featuring a picture of an elderly couple in Montreal, and another featuring a car's bumper in the company parking lot.

She also singled out ads featuring photos she and her friends had taken, and told me the back-stories behind some of the images.

American Apparel ad from Boston's Dig Magazine.
American Apparel ad from Boston's Dig Magazine.

"If you saw this without knowing where it came from you might just think it's a dirty picture I guess," she said of one photo. "But to me that's a great picture from a funny night that sort of captures what me and my friends do when we hang out."

American Apparel ad from Boston's Dig Magazine.
American Apparel ad from Boston's Dig Magazine.

This is a central feature of the company's defense of its advertising: that the ads it uses are the natural outgrowth of a genuine youth culture at the company. In defense of their advertising, company representatives often point to a "sexy lifestyle" being lived by the company's employees, from which the ads spring spontaneously. The company goes so far as to include a "gallery" section on its website, featuring collections of amateur photography by employees, videos of photo shoots and office Christmas parties, and other pieces of what the site calls "American Apparel Culture". In a way then, American Apparel wants its ads to be viewed as spontaneous art, produced by and among its employees, featuring its employees.[51]

But isn't there a difference between art and advertising? And what about those who don't want to participate in American Apparel's sexy "youth culture"? Isn't there still something basically irresponsible in plastering city buses and park benches with pictures of spread eagle girls blowing bubblegum, for the sake of selling t-shirts?

In my conversations with American Apparel's press agent, Cynthia Semon, she acknowledged that the ads are just that: advertising. They are created in a prescribed way, to appeal to a targeted audience with the aim of selling goods to that audience. In this way, they are funadementally different from art created for art's sake.

However, Ms. Semon still defended the company's ads by comparing their critics to those who would censor erotic art.

She and American Apparel assert that it is the viewers individual responsibility to curb the harmful societal trends blamed on advertising and art. Parents should educate their children about sex and raise them properly, she maintains; advertisers should not be faulted for selling their products as they see fit. "No corporation can influence a child moreso than their family," she said.

Many critics of advertising disagree. In her book Can't Buy My Love: How Advertising Changes the Way We Think and Feel, author Jean Kilbourne takes exception to the kind of 'individual prevention only' approach to social problems that Ms. Semon is advocating. Kilbourne argues that there is a need for a more widespread, "systems approach" of regulating businesses and advertising if people are to curb the social problems they are linked to. She writes:

"People make choices, for better or worse, in a physical, social, economic, and legal environment. The credo of individualism and self-determination ignores the fact that people's behavior is profoundly shaped by their environment, which in turn is shaped by public policy. Certainly individual behavior and responsibility matter, but they don't occur within a vacuum. ...
The systems approach is easily misunderstood because some of the interventions can seem trivial, especially in light of the extent of the problems. When some parents in a Boston suburb complained about an advertisement for beer in a Little League field, a well-known Boston columnist ridiculed them as "touchy-feely, politically correct busybodies" who thought the ad would immediatly "turn their kids into drunks."... Like a lot of people, he completely missed the point. Which is that we give a message to our children about the normalcy of beer-drinking and about societal expectations when we allow such an ad on a Little League field. A single ad-or scores of ads- won't turn kids into drunks, but they are part of a climate that normalizes and glamorizes drinking, and research proves that this especially effects young people.

Ms. Kilbourne writes that where a focus on individual prevention has failed to curb social problems like drinking and tobacco use, systems approaches have succeeded dramatically.

She uses as an example the history of antismoking organizations, who for years focused on the individual smoker as "the problem," offering consumers health information, pictures of diseased lungs and advice for quitting. Data showed, however, that an individual prevention approach was not improving public health. Antismoking organizations then began switching their strategies, highlighting the role of the environment and the institutional responsibility of the tobacco industry. Bans were placed on cigarette advertising and promotion, aggressive counteradvertising was created, and higher taxes and better warning labels were placed on cigarettes.

As a result of this shift to a systems approach, consumption of cigarettes has plummeted in states that launch aggressive anti-tobacco campaigns, and the norms for cigarette smoking have changed dramatically in the past 20 years.

American Apparel print ad from 2005.
American Apparel print ad from 2005.

But do ads that use sex to sell contribute significantly to a harmful environment? A number of academics, activists, and consumers seem to think so.

Mallory Hanora, a feminist and contributor to Knowmore.org, had the following to say about American Apparel's ads:

"American Apparel is built not only on what it sells, but how it sells it. If worker's rights are truly important to the production of a t-shirt, why isn't the objectification of female models important in the process of selling that t-shirt? After all, the models in American Apparel's advertisements are part of the company's workforce. For a so called visionary company, it's hypocritical and shortsighted to trumpet the influence you have over labor policies in garment manufacturing, but deny that same influence over marketing by submitting to the sexist, exploitative status quo in advertising."
Calvin Klein ad from 1994.  Following a public outcry, Klein recalled the ads.
Calvin Klein ad from 1994. Following a public outcry, Klein recalled the ads.

With the help of Alexandra Sprunt and Cynthia Semon at American Apparel, I compiled a diverse collection of about 80 of the company's ads from the past two years. The ads were then shown to Dr. Susan Bordo, Professor of Gender and Women's Studies at the University of Kentucky. Dr. Bordo is the author of numerous books involving gender, cultural images and their relation to body image issues, including Unbearable Weight: Feminism, Western Culture, and the Body. She had the following to say about American Apparel's advertising:

Calvin Klein ad from the controversial 1994 campaign.
Calvin Klein ad from the controversial 1994 campaign.
"My biggest complaint against ads such as these is the way they get away with soft-core porn body postures and motifs -- for example, spread legs and orgasm-like facial expressions, done in an 'unposed' polaroid-type style -- under the guise of being 'young, fresh, and authentic.' The marketers use post-modernism and 'youth culture' ideology as an excuse for moving the bar lower and lower regarding what is acceptable to show. Calvin Klein was the first to employ this strategy in his famous 1994 series of TV ads, which looked like home movies with underage models, and which were ultimately yanked from the air. Klein defended the ads by saying the models weren't actually underage (as though that were the issue) and by insisting that for him they had less to do with sex than with spontaneity and youthfulness. The idea: These young people are simply being 'natural'; it's the sleazy-minded viewers that see the dirty sex in the ads.
Screen capture from American Apparel's website.
Screen capture from American Apparel's website.
The reality of imagery is, however, that the more stylized and polished photos are -- the more 'high fashion' drama they express -- the less pornographic they look. In the posed, glossy, and highly stylized photos of most (not all) fashion spreads, the models do not look like they've been caught unaware or don't fully understand the meaning of what they're doing. They look like models. These American Apparel ads, in contrast, which pride themselves on using 'real people,' for that very reason have a much more pornographic edge to them.
It's distressing that the same kind of images that had to be taken off TV in 1994 are, in 2006, are stuff of 'left-wing' advertising!
Do the images have an effect? All you have to do is walk down any suburban street and you'll see the answer to that. Six and seven year olds, who don't have any real idea of what they are doing, are aping the poses, the gestures, the personae. Young, fresh, and spontaneous? Or little girls learning how to play by the current rule that if you aren't sexy, you aren't worth anything?"

Charney remains dismissive of those who would criticize his company's ads. In our conversation, Dov pointed to soaring profits as evidence that "the average consumer doesn't care about this stuff. Most people are responding to our ads. All of this criticism is academic. ... It all comes down to personal taste. Look it's not like I'm selling beer, you know. We're selling sexy underwear, so we have sexy ads!"

Sustainable Practices, Organic Products

[[Image:|thumb|right|280px|American Apparel's Sustainable Edition on display. Photo: Desarae Downs]] According to Organic Exchange, Nike Inc. is the world’s leading consumer of organic cotton. In 2003, the mega corporation used 3 million pounds of organic fiber, which represented roughly 2.5 percent of the cotton it used globally. [52]

American Apparel, which produces only a fraction of the merchandise Nike manufactures, already uses nearly 750,000 pounds of organic cotton annually, between 5 percent to 7 percent of its raw materials. Additionally, the company aims to produce and use 80 percent organic materials within a few years. [53], [54]

100 percent organic cotton clothes are avaliable, for the same price as conventional garments, in each of American Apparel's retail stores.

In an interview with Sustainable Industries, Roian Atwood of American Apparel stated, “We did not want to make the organic product a product that appealed only to the pocketbook elite or the hippy and organic crowd.”

Atwood has also stated that the company doubles sales of its Sustainable Edition every two months. "We've had an amazing response," he told one interviewer. [55], [56]

American Apparel uses more than 3 million pounds of cotton per month, and sells thousands of pounds of its scrap fabric each week to a textile company that spins it into new yarn.

Citing difficulty with the organic cotton growing process, Mr. Atwood recently told the attendees of the Compostmodern 2006 convention that American Apparel "has its eye on alternative fabrics made from bamboo, even corn sugars — and foresees using more blends, such as equal parts organic and conventional cotton with bamboo and recycled ingredients."

ASE solar panels line the roof of American Apparel's factory.  Photo: Desarae Downs
ASE solar panels line the roof of American Apparel's factory. Photo: Desarae Downs

Beyond the use of organic materials, American Apparel's actions have proven its committment to sustainable practices and technology.

Freestanding ASE solar panels line the factory's roof, which Mr. Atwood proudly described as the “Cadillac of solar panels.” Last year the company invested $1.3 million in construction of the panels, which now supply the factory with about 20 percent of its electrical needs.

As of this writing, the company maintains five trucks running on biodiesel, supplied by a processor designed by east LA high school students. The Eco-Fuel Project is a class and an after school activity at Gabrielino High School in San Gabriel powered entirely by students: writing grants, testifying in Sacramento, implementing alternative energy strategies for schools, addressing public transportation, and designing and building the machines they use.

According to American Apparel's daily update, the company is working with Gabrielino students to develop a machine that will provide biodiesel to its entire fleet. [57]

During our interview, Roian jumped up on a chair to show me the new "daylight harvesting" lights his department was testing for use in the factory. He placed his hand over a small sensor on the light fixture, and the bulb glowed brighter; removed his hand and the bulb grew dimmer. The lights sense the amount of ambient light in the room (light coming from windows, nearby rooms, etc.) and adjust their output accordingly to save energy.

In fact, the purpose of Atwood's entire department is to advance a sustainable and socially responsible agenda within the company, test sustainable innovations for their feasability, and "sell" management on new ideas.

Despite all of these efforts however, Charney claims he doesn’t want to force his values onto the consumer.

“We don’t want to seduce people with the tribalism of sustainability,” he told one reporter.

“We’d rather they buy our product because it’s a great product, and if they appreciate how it was made or the conditions under which it was made, all the better.” [58]

Political Influence, Support for Immigrants

"Legalize L.A." banner on American Apparel's downtown LA factory.
"Legalize L.A." banner on American Apparel's downtown LA factory.

"At the headquarters of American Apparel in Los Angeles, sewing machines at the largest garment factory in the United States fell silent when managers shut down to allow all 3,000 workers a chance to join the protests. 'The government has to realize how important Latinos are to this economy and give us full rights,' said American Apparel customer service representative Ruben Eustaquio."
- Reuters, 5/1/2006.

"'This is part of human history. Immigrants are Americans — that's the point. They are future Americans. We need to embrace immigrants and say, 'Hey, this is what makes L.A. so exciting!'' Charney said.

By noon, Charney had left the factory and joined his workers and their families, who had arranged to march together on Broadway. Many wore company T-shirts emblazoned with 'Legalize L.A.,' carried American flags and shouted 'Sí, se puede!'

'The standards of the company are the kind of standards we've been fighting for — we want to make sure that all that we have at American Apparel is there for other workers at other companies,' said Ruben Eustaquio, 33, who began his career at American Apparel about eight years ago sweeping floors."
- LA Times, 5/1/2006.

American Apparel factory worker Irene Hernandez, 29, is originally from Durango, Mexico.
American Apparel factory worker Irene Hernandez, 29, is originally from Durango, Mexico.
According to Dov Charney, roughly 75% of American Apparel's workforce is composed of Mexican immigrants, and the company has verified the legal status of each worker.

"Everyone who works here, we check their documents -- but we don't over-document or under-document," Charney told NPR last month. "We follow the law in a very precise manner."

Still, American Apparel admits that fake identification cards are easy to come by, and that many employees in the apparel industry and similar businesses are undocumented, illegal immigrants.

"Agriculture, apparel, all the fundamental industries -- they're laced with falsely documented workers," Charney continued. [59]

Charney has been vocal and demonstrative in the press regarding his stance on immigration issues; he says he is in favor of liberal immigration policies, including open borders and an amnesty for immigrant workers. "Immigrants are the engine of our economy, whether we want to admit it or not," said Charney in the NPR interview. "They're here, legal or illegal -- [a] fundamental part of the economy is these workers." [60]

On May 1, 2006, an estimated one million Americans took part in a El Gran Paro Americano ("The Great American Strike"), a boycott of United States schools and businesses held to coincide with May Day. In a continuation of the 2006 U.S. immigration reform protests, organizers called for supporters to abstain from buying, selling, working, and attending school, to demonstrate the extent to which illegal immigrants' labor is needed for the U.S. economy. [61]

During the strike, American Apparel generated considerable press by closing its factory in solidarity with protesters. Reuters, the LA times and the Wall Street Journal all took notice of the factory's closure, with Charney quoted in each of the publications expressing his affinity to the protester's cause. The company also made note of its stance on its daily update blog, and republished angry letters it had received from customers on the subject. [62]

When asked if American Apparel would make political contributions, as a company, or attempt to influence politics in any way, Charney responded in the affirmative. He said he planned on working 'behind the scenes' of the immigration debate, and using his company's weight to leverage his pro-immigrant agenda. "What I can do is try and shape the law, by working with people that are writing the laws ... and try to influence them," Charney said.

Community Involvement

In the wake of Hurricane Katrina, American Apparel donated approximately $600,000 worth of merchandise to tens of thousands of victims. The company sent a pair of employees in a rented truck directly into the disaster area, where they spent a week hand delivering 80,000 new T-shirts and underpants to shelters.

American Apparel community relations coordinator Roian Atwood told the Los Angeles Garment & Citizen that he and colleague George Lewis III were given a "carte blanche directive" from American Apparel co-owners Dov Charney and Sam Lim, and vice president Marty Bailey.

"They told us, 'look, this isn't Indonesia, this isn't across the ocean, this is our backyard," Atwood said. "They just told us to go and do whatever it takes to help." [63]

The Future of American Apparel

2005 American Apparel ad.
2005 American Apparel ad.

In our last interview, Charney spoke excitedly about the future of his company.

"The real struggle at this point is if I can keep [American Apparel] private and not get involved with partners that may not go the extra mile," Charney said. "The bankers don't understand American Apparel. They're not young; there's a generational conflict in terms of perception and where the company is going, and people asking me 'why don't you just go overseas?'"

"I spent so much time arguing with these academics it kinda of took a toll on me, but now im focused on execution. I'm worrying about lightbulbs in the stores, and if they have enough air conditioning ... if the sales are there. We can do all kinds of crazy stuff [in terms of Social Responsibility], but if the sales start collapsing we can't perform. ... If the company's got earnings, then the doors are open."

"There's so much passion there," Charney said of his company. "There's a little culture that's working for us... it's not that it won't evolve or other options don't exist. It's just a little bit more human than some of these academics want to recognize. ... That's not an easy thing, to keep it human, as you scale it larger. I think we can do it though... there's people [within the company] that give a shit too that are emerging."

Regarding the future of Vertical Integration and worker's rights at the factory, "Supposing I die and a new guy comes in and just bears down on the workplace and tightens it up, or suppose I'm bought out of American Apparel. I think American Apparel is a very unionizable factory because it's not outsourced and its not in the shadows, and also there's only one factory. I think the workers possess a lot of power, because they've been positioned to be a working part of the company. If I disappear tomorrow, I think that the workers have options that they could exercise. I mean they could just stop working completely. I don't think they need to follow the rules. They could have an illegal strike, and what's [an abusive employer] gonna do, just stop working."

"The Baby Boomers franchised everything and outsourced everything," Charney said at one point. "That was their solution. I believe in free trade all the way, but globalization was basically an outsourcing project, but that's not what it's about. You have to be there making the stuff with your own hands and getting into it, and dealing with the people and dealing with [garment] quality problems, dealing with the love and dealing with the hate."

"There's nobody that can take the cake and say they're perfect," Charney said at the end of a long rant. He was speaking rapidly and trying to catch his breath, as he scrambled through what sounded like an airport somewhere.

"I'm barely getting started," he laughed between breaths. "Give me a chance!"

Acknowledgements

I'm indebted to a number of translators, editors, scholars, activists, and media representatives, without whom this research would not have been possible.

Dr. Robert Fitch of New York University helped fact check UNITE's history, in addition to providing much of the source material used. Dr. Susan Bordo of the University of Kentucky, Mallory Hanora and Tobie Jane provided criticism of ads. Bjorn Claeson of Sweatfree Communitees, Kimi Lee of the Garment Worker's Center, and Sean Donahue of the Clean Clothes Campaign assisted with facts and perspective on the UNITE drive. Buddy Wakefield, Mark Gonzales, and Gabriella Garcia Medina conspired to provide us with excellent translation in our conversations with workers. Ron Hiner and his family opened their home to me in Minneapolis for a week, and Alex Leader rode his bike to the former UNITE headquarters in New York just to take a picture. Cynthia Semon, Dov Charney, Steve Wishart, Andrew Kaplan, Keith Fink, Chris Chafe, Manou Vaezi, Marty Bailey, Kristina Morena, Roian Atwood, Weronika Cwir, and Alexandra Sprunt all gave generously of their time in interviews and correspondence.

Ramsey Bitar, Mallory Hanora, Desarae Downs, David Blomquist, Tom Inhaler, Winfield Peterson, and Sage Francis have provided crucial help with editing and direction throughout. Desarae also assisted in factory visits and interviews.

Supporting Materials

Materials Related to Nelson v. American Apparel

Brands & Subsidiaries

American Apparel Organics, American Apparel Store, American Apparel Canada

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