Discrimination, Misuse of Funds Led to Dov Charney's Firing from American Apparel

This might actually be worse than we thought.
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Alyssa Vingan Klein
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This might actually be worse than we thought.
Photo: Johannes Kroemer/Getty

Photo: Johannes Kroemer/Getty

Late last week, the board of directors at American Apparel announced rather suddenly that it was stripping Dov Charney of his chairman title and suspending him as CEO of the company he founded, following an "ongoing investigation into alleged misconduct." 

Although the reasons behind his firing were left very vague in a press release from the brand, details about Charney's misbehavior during his time at American Apparel are beginning to surface. On Sunday, Buzzfeed received a copy of Charney's letter of termination, which lists misuse of company funds, discrimination against employees, and mishandling information regarding a brand-damaging sexual harassment lawsuit as the main reasons behind his dismissal.

The letter states that American Apparel's investigation led it to discover that Charney engaged in "willful misconduct that has materially injured the financial condition and business reputation of the Company." First, he breached the ethical relationship between himself and the brand, namely by taking advantage of female employees.

The letter cites former AA staffer Irene Morales, who came forward and accused Charney of making her his "sex slave" back in 2011, inciting another employee to create a blog defaming Morales and posting nude photos of her, essentially tarnishing her case against Charney. Although the former CEO knew about this "revenge porn" blog, he allowed it to continue, as it benefitted him personally.

Next, Charney was caught paying off female employees, offering them severance packages in exchange for their silence about his misconduct. In addition, he refused to take part in AA's mandatory sexual harassment training.

The letter also claims that Charney couldn't be trusted with the company's finances, and in addition to the aforementioned hush money, he had members of his own family on the AA payroll and has racked up plenty of "unauthorized business expenses," including personal travel.

Charney technically has a grace period (ending July 19) to fight back — he is expected to come forth with legal action against American Apparel soon — but if the above allegations are any indication, he doesn't stand a chance at getting his gig back.