Dov Charney, the embattled American Apparel Inc. founder who lost control of the company nearly a year ago, is not waging outright war against the company’s new leadership.
But he’s not going quietly, either. A slew of recent actions targeting the company – from more than a dozen lawsuits and labor complaints to a union drive – all connect to Charney and his allies. They could signal to the company that the ousted founder, through his connection with employees and shareholders, can drain American Apparel’s money and focus when it has little of either to spare.
Labor and legal actions against the company have been stacking up over the past few months.
The 17-year-old manufacturer’s first union drive is under way, organized by many employees loyal to Charney and supported by an advocacy group that’s had a long relationship with him. One of the goals of the pro-union workers is to bring Charney back.
Thirteen complaints against American Apparel have been filed with the National Labor Relations Board since Charney’s firing, all of them filed by L.A. attorney Keith Fink, who also represents Charney. Current and former employees have filed several lawsuits against the company; some of them are represented by Fink or use information from Charney in their complaints.
In his only direct action against American Apparel, Charney has filed a demand for arbitration, claiming the company owes him an estimated $40 million because it breached his employment contract.
Through a spokeswoman, American Apparel has called the flurry of litigation baseless. And a consultant to the company called all the recent actions “a concerted effort on the part of Dov Charney to bring the company down, to the detriment of the very workers he is allegedly trying to save.”
Charney declined to comment for this story, but Fink, of West L.A. law firm Fink & Steinberg, denied that Charney is orchestrating the lawsuits.
“Charney has nothing to do with them other than he is a corroborating witness on certain issues in the cases,” Fink said. “Moreover, the matters are just cases – they are not strategies.”
Still, Fink implied more is coming; all the legal actions taken so far are “the tip of the iceberg.”
Since his initial ouster in June and his formal firing in December, Charney has said he intends to regain control of American Apparel.
But if that’s the case, it’s a misguided scheme, said local investment banker Lloyd Greif, who has watched American Apparel over the years.
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