It's a sorry tale of revenge porn, paying off female employees and putting his family on company payroll
When American Apparel unceremoniously voted to fire Dov Charney last week, it seemed like the founder and CEO's past history of alleged sexual harassment had finally caught up with him. But that's just one side of the story. Buzzfeed obtained the company's termination letter to Charney, and it reads like a list of everything a CEO should not do while in power. Charney is reportedly planning to sue the company for wrongful termination, but it looks like he'll have to deal with the PR fall-out from this list of accused misdemeanours first:
ALLOWING AN EMPLOYEE TO SET UP A "REVENGE PORN" BLOG
Back in 2011, former salesperson Irene Morales acccused Dov Charney of making her his "sex slave". Morales sued the company for $260 million, although the case was sent into arbitration by a judge in 2012. While the case was ongoing, an AA employee created a fake blog posing as Morales and posted numerous nude photographs of the woman in an attempt to discredit her case. Charney knew about the defamatory blog and did nothing to stop it. "You were in a position to prevent this conduct from occurring but, since it benefited you personally, you allowed it to continue," the board states in Charney’s termination letter.
USING COMPANY MONEY TO PAY OFF FORMER FEMALE EMPLOYEES
What happens when you're tired of dealing with all those sexual harassment lawsuits? Pay off the claimants with your company's money, duh! In its letter to Charney, American Apparel accuses him of misusing corprate funds to hand out "significant severance packages to numerous former employees to ensure that your misconduct vis-a-vis these employees would not subject you to personal liability". The hand-outs came out with signed release agreements that were legally binding and covered the "potential subordination of perjury" – implying that Charney expected these paid-off employees to lie under oath if called to court.
REPEATEDLY ENGAGING IN SEXUAL HARASSMENT AND VERBAL ABUSE
"You engaged in conduct that repeatedly put yourself in a position to be sued by numerous former employees for claims that include harassment, discrimination and assault," Charney's termination letter reads. "In the recent past, you refused to participate in mandatory sexual harassment training and undermined the Company’s policies by interrupting employee sexual harassment training mandated under California law."
So not only did Charney engage repeatedly in sexual harassment, he also refused to undergo any training meant to weed out harassment in the workplace. On top of this, he also made "derogatory and disparaging remarks directed at persons of certain ethnicities or related to their gender, sexual orientation or religious persuasion". Classy.
PUTTING HIS FAMILY ON THE COMPANY PAYROLL
Charney wasn't just misusing company funds to pay off employees – he was also using them to pay his parents. Charney's father is on American Apparel's payroll and his mother, although not an employee, is a retail and design contributor to the company, a source close the company told Reuters. In 2013, Daddy Charney received $238,000 in "architectural consulting and director fees".
MISUSING COMPANY FUNDS FOR HIS OWN BENEFIT
Charney didn't just pay his parents with company money, he also used used the company credit card to book flights for them. His parents weren't the only ones to benefit from Charney's generosity as CEO – Charney gave his friends the key to corporate apartments as well as staying in them when he was not on company business.