The board notified Charney on Tuesday of their intent “to terminate his employment as President and CEO for cause,” meaning he’s got 30 days left at AA before he’s officially out.
However, he won’t be able to do anything during that month as the board has suspended Charney and appointed CFO John Luttrell as Interim CEO until Charney’s replacement is found.
The board did not give a specific reason for the ouster, but stated that the decision “grew out of an ongoing investigation into alleged misconduct.”
“We take no joy in this, but the Board felt it was the right thing to do,” explains AA board member Allan Mayer, who will serve as co-chair. “Dov Charney created American Apparel, but the Company has grown much larger than any one individual and we are confident that its greatest days are still ahead.”
A source close to Charney tells the L.A. Times that the exiled CEO isn’t taking his dismissal lightly.
“He was totally taken by surprise, which is part of the problem,” the source said. “He’s going to fight like hell to get this company back, but he won’t succeed.”
In 2011, American Apparel lashed out when four female former employees filed a sexual harassment suit. At the time, the company told The Times that the four women were friends who were colluding to “shake down” Charney and the company for money and that it had “voluminous evidence” to prove that the allegations were false.
Through all the previous harassment and wrongful dismissal claims, American Apparel leadership had backed Charney, labeling the lawsuits filed by employees as extortionate.
AA has also taken a lot of flack for its highly sexualized advertising, often featuring young models who appear, to some, to be underage. Most recently, the company was criticized for a window display of mannequins in see-through undergarments complete with visible pubic hair.
While Charney and AA have long marketed their clothing as being made in non-sweatshop conditions, the company has had to fire thousands of workers who were not legally allowed to work in the U.S.