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Friday, Feb 23, 2024

American Apparel Union Says Company Cutting Spousal Health Coverage

American Apparel Inc.’s newest union, representing production workers at the downtown retailer, has alleged that the company is longer offering to pay health insurance premiums for employees’ spouses.

Nativo Lopez, a senior adviser with Santa Ana immigrant advocacy nonprofit Hermandad Mexicana and a trustee of the General Brotherhood of Workers of American Apparel, said employees were informed during last week’s annual open enrollment period that the company would no longer offer coverage for employee spouses.

American Apparel, which is self-insured, had previously contributed something toward coverage of spouses and children, he said, but did not know how much. Children will continue to be covered, Lopez added.

“We will get more involved with the health insurance when we get involved in a contract,” Lopez said.

American Apparel did not respond to a request for comment.

The union made the allegation in a release Friday and said it had called for a rally to draw attention to the shift at American Apparel’s store at 7726 Melrose Avenue.

The union formally registered with the U.S. Department of Labor last week, Lopez said, and sent a letter Tuesday to management requesting to be recognized and to start communications toward forming a contract, he added.

The company has not responded, he said. Stephanie Padilhado was elected president of the union, but was fired from American Apparel soon after being elected, according to GBWAA.

Padilhado was among those installed after elections held earlier this month. Lopez said it has about 2,800 workers, primarily comprised of production staff, as members. Employees began organizing early this year after seeing work hours reduced and other changes to working conditions, they said. They allege the changes occurred after founder and former Chief Executive Dov Charney was fired in December and new Chief Executive Paula Schneider took over. Charney has supported the unionization effort.

Shares of American Apparel, which employs roughly 4,500 employees in Los Angeles and Orange counties, rose 50 percent in Friday trading, closing up 8 cents to end the day at 24 cents. It was unclear what caused the spike, which came on volume three-times greater than the daily average of around 1.2 million shares trading.

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