The folks at Buzzfeed have a copy of what is believed to be the actual dismissal notice given by the board to Charney.
“[Y]ou have willfully and continuously failed to substantially perform your job duties… and you have engaged in willful misconduct that has materially injured the financial condition and business reputation of the Company,” reads the letter.
The most specific allegation made in the letter involves Charney’s purported involvement in a website set up to discredit former employees who had sued for sexual harassment.
“[Y]ou were aware of, but took no steps to prevent an employee under your direct supervision and control from creating and maintaining false, defamatory and impersonating blog posts about former American Apparel employees,” states the letter.
This is most likely a reference to a blog that was used to post, among other things, nude photos of a young employee who claimed she had been forced to perform sex acts on Charney over an 18-month period.
“You were in a position to prevent this conduct from occurring,” continues the letter, “but, since it benefitted you personally, you allowed it to continue.”
The case mentioned above went into arbitration but the disposition of the complaint was never made public. It’s possible that this is the case referred to in the letter, which states that Charney’s behavior “exposed the Company to liability and at least in one instance, directly resulted in an arbitrator finding that the Company acted with malice.”
And while much had been made over the years about how none of the harassment claims had gone to trial and none had resulted in a court ruling against AA, the letter states that Charney “engaged in similar misconduct with respect to several other former American Apparel employees, resulting in material payments and probable future settlements of such claims.”
The board claims that Charney’s behavior has raised its insurance premiums to the point where it’s not sensible to keep him.
“The Company’s employment practices liability insurance retention has grown to $1 million from $350,000, causing an unacceptable level of risk for the Company,” reads the letter, “and the premiums for this insurance are well outside of industry standards.”
Charney is also accused by the board of handing out “significant severance packages,” bonuses, salary increases, and commission payments without approval to employees in an effort to keep them quiet about his actions.
“[Y]ou authorized these payments to induce employees to sign release agreements that were aimed at protecting you from personal liability for your misconduct,” reads the letter.
Finally, the board says it believes Charney may have asked someone to perjure themselves in a case that is currently pending.
In addition to these allegations, the CEO apparently failed to attend mandatory sexual harassment training and interrupted the training sessions of others, while continuing to make inflammatory remarks about employees’ genders and ethnicities.
In terms of misusing company property and funds, the board says Charney is accused of using AA money to pay for family members’ travel, as well as letting friends use homes paid for by the company when they weren’t being used by Charney.
A source close to the outgoing CEO tells Reuters that Charney’s father is on the AA payroll, and that the controversial founder didn’t see why it mattered that someone was using one of the corporate apartments when they weren’t in use.