American Apparel: Being a Misogynist Jerk is Bad for Business

By Jamilah King Jun 23, 2014

It’s a common quandary felt throughout progressive communities: How do you hold the racist/sexist/homophobic head of a company accountable for their actions? While appeals to their moral conscience may seem like a worthwhile endeavor, time and again, the answer’s been the same: attack their bottom line.

That proved true recently with Dov Charney’s ouster from American Apparel. As Susan Berfield writes at Bloomberg Businessweek, Charney’s antics were public knowlege for years, but it wasn’t until the company started losing money that they finally terminated him. In Charney’s termination letter, American Apparel’s board wrote:

Your conduct has required the Company to incur significant and unwarranted expenses, including expenses associated with litigation and defense costs, significant settlement payments, substantial severance packages that were granted to employees, and unwarranted business expenses that you incurred for personal reasons. The Company’s employment practices liability insurance retention has grown to $1 million from $350,000. … The resources American Apparel had to dedicate to defend the numerous lawsuits resulting from your conduct, and the loss of critical, qualified Company employees as a result of your misconduct cannot be overlooked.

The board also wrote that "many financing sources have refused to become involved with American Apparel as long as you remain involved with the Company." Read more