Dov Charney’s Failed Utopia

Ten years ago, Alberto Chehebar, then the editor of Loft, a Hispanic men’s magazine, struggled to keep up with Dov Charney, the founder of the clothing retailer American Apparel, as he speed-walked the floor of Magic, a Las Vegas trade show. Chehebar’s magazine story, which appears on the American Apparel Web site, opens with Charney “trailed by his faithful, like a prophet”; a female assistant holds up a hamburger so that he can take a bite whenever he wants. As the article continues, Charney keeps up a manic monologue that touches on the Gap, the Berlin Wall, Bill Gates, Jesus, sweatshops, wanting to get naked, and women who wear Christian Dior. (“If a woman can’t be liberated from that tribalism, I could fuck the living shit out of her, but it would just be a fuck.”)

Chehebar wrote, “The message of freedom, sex, and rebellion is clear in everything about American Apparel. Charney is after more than justice for immigrant workers; he wants to bring back the freedom of the Sixties and Seventies. He studies the sociology of community and hopes to help rein in the excessive regulation imposed on contemporary American society. You could say that’s the American Apparel mission: to serve as a model for a free society that is both happy and profitable.” Presumably, Chehebar approved of the mission. Two years ago, he joined American Apparel’s board of directors, which has seven members, including Charney, all of them men.

Last week, though, the board concluded that Charney’s behavior had become a liability. In a letter that has since been leaked, the board suspended Charney as chief executive and said that it intends to fire him for cause. The allegations against Charney show that American Apparel has been neither happy nor profitable lately. “As is evident from a number of recent court rulings and arbitrator awards and decisions, you repeatedly engaged in conduct that violated the Company’s sexual harassment and anti-discrimination policy,” the letter states. “Furthermore, 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.” The board also alleges that Charney misused company funds to cover up his behavior.

Charney built American Apparel, which has about two hundred and fifty stores in twenty countries, into a midsized retailer with an outsized reputation. He earned good will for employing U.S. workers to sew his clothes, at a time when most apparel production has moved overseas. The retailer is also known for its hypersexualized advertising. Many of the photos, often shot on a rumpled white bed, show half-naked young women wearing a single piece of American Apparel clothing. Frequently, the images show only the women’s body parts—thighs, buttocks, pelvis—but not their faces. In one, a woman wearing a black leotard spreads her legs toward the camera, next to the words “Now Open.”

Charney appears in several of the ads, including one with two women, all three of them fully clothed, titled “In bed with the boss.” He is known for walking around in his underwear in front of his employees. His messianic, provocative persona has been a large part of American Apparel’s image; with his often extravagant facial hair and retro clothing, he resembles a character in “American Hustle.”

Allan Mayer, the new co-chairman of the American Apparel board and a prominent crisis specialist, told me that the brand’s commitments to sweatshop-free labor and U.S. factories “have always made me very proud to be associated with the company, and that started with Dov. The power of the brand is also tied up in its transgressive attitude. That’s a reflection of who Dov is, too.”

The American Apparel board was “painfully aware” of the sexual-harassment lawsuits and the newspaper stories, Mayer said. “What I think most people don’t appreciate is that, in the fog of all that, to get down to the actual, hard, indisputable facts is more difficult than you might think.” In most of the harassment suits, he said, either the case was thrown out because the employee had earlier signed a release as a condition of receiving severance, or the case was settled without an arbitrator determining the facts of what had happened. Over the years, Mayer said, board members did discuss their concerns with Charney about his conduct. “He’s not a moral monster,” Mayer said. He paused. “I guess that’s faint praise.”

But Mayer said that new information uncovered during an investigation this spring forced the board to act. Its letter claims that Charney gave employees salary increases and bonuses to induce them to sign releases protecting him from liability. It also says that he gave former employees large severance packages to hide wrongdoing, without telling the board. In addition, the board alleges, Charney knew about, but didn’t stop, an employee who created “false, defamatory, and impersonating blog posts” about former American Apparel employees, which included naked photos. The company may have to pay significant damages.

American Apparel has also had trouble raising money, because potential lenders objected to Charney’s reputation, the board says. The company owes its lenders two hundred and fifty million dollars, some at interest rates of fifteen to twenty per cent. In the past four years, American Apparel sold more than two billion dollars’ worth of its wares—stretchy, colorful T-shirts, tights, leotards—yet it lost more than two hundred and seventy million dollars.

Charney, who has appeared stunned by the board’s decision, intends to fight. He is American Apparel’s largest shareholder, owning more than a quarter of its stock. His attorney, Patricia Glaser, in a letter to the board, calls the firing “not merely unconscionable but illegal,” arguing that Charney had no opportunity to negotiate. The charges against him are baseless, she adds. “Most involve activities that occurred long ago (if at all) and about which the Board and the Company have had knowledge for years,” she writes. In an interview with the Financial Times, Charney called the board’s actions “grotesque,” adding, “I think I will be back in my office before long.” Glaser did not respond to requests seeking comment. Mayer told me that the board believes it is on firm legal ground.

Charney may preach “free love,” but if the allegations against him are true, he misused that ideal. It was meant to be a connection chosen by two equal adults, not an ethic of promiscuity without accountability. But then, the notion of free love has a history of being distorted. As women involved in the New Left have written, many of the men in that movement acted the same way in the era for which Charney is nostalgic. When women complained about their position in the Student Nonviolent Coordinating Committee, the activist Stokely Carmichael joked, “The position of women in the S.N.C.C. is prone.”

At American Apparel, Charney wanted to recreate the mythologized atmosphere of the sexuality of the sixties and seventies, without changing the power structure to make the free love that he advocates possible. In the Chehebar story, he treats his female assistants like servants. (“ ‘Napkin, Erika!’ Charney demands. Erika scurries off to find one.”) Later, he says, “I’m going to make so much fuck’n’ money, it’s going to be disgusting.”

Mayer told me, “Let’s say I had called Dov and said to him, ‘What the hell is that doing on our Web site?’ He would accuse me of being a prude and a puritan. When you criticize his behavior, he says you’re indulging in some form of sexual shaming. He believes he represents a very authentic and honest sexuality that middle-class America just can’t accept.”

Charney may have believed that he could loosen the restrictions of society within his corporation, but American Apparel is a public company, not a private home. In news stories, some female American Apparel employees have argued that they chose to work in a sexually charged office. And, legally, not all sexual behavior in a workplace constitutes harassment. The conduct must be unwelcome. It must also be severe or pervasive. And it must affect an employee’s working conditions or create a hostile or offensive work environment. Still, so long as the hierarchy exists—so long as Charney, as C.E.O., had the power to fire anyone else—it is unpersuasive to maintain that a sexual encounter between him and another employee could happen on equal footing.

The reporter Claudine Ko, who recorded Charney repeatedly masturbating in front of her in an article for Jane magazine in 2004, rejected the idea that she was a victim of his behavior. “Who was really exploited?” she writes in a follow-up article. “We both were—American Apparel got press, I got one hell of a story. And that’s it.” But Charney didn’t control Ko’s salary; he couldn’t fire her.

For the past few days, a video has been circulating online of Charney dancing naked in front of two women, one of whom is recording him. (The video does not appear to be related to the board’s decision.) A rumpled white bed sits in the background. The woman shown in the video doesn’t look happy—she looks annoyed, and a little repulsed. Toward the end, the woman holding the camera calls out to Charney, “Shake your booty!” His smile fades, and he turns away, saying, “Stop. You’re gonna get me in trouble.”

Photograph by Keith Bedford/Bloomberg via Getty.