LOS ANGELES — Standing among more than 300 current and former American Apparel textile workers, Dov Charney took the microphone and launched into an impassioned speech.
“Don’t ask what you can do for me. Don’t ask what you can do for yourselves. Ask what you can do for the company,” the ex-American Apparel chief executive said as the workers erupted into applause.
It was a scene that could have played out years ago on the floor of American Apparel’s downtown Los Angeles factory. But this past Saturday, the backdrop was the concrete backyard of a modest home in South Central L.A., just one day after the company’s new CEO sent a Spanish-language message to factory workers, warning them of “external forces trying to cause trouble and affect our business.”
Surrounded by current and former factory workers — many of them shareholders — Charney relayed his version of the events that led to his official ouster in December after the company’s board first moved to fire him last summer.
To keep the company from being sold, Charney said, he put his trust in a hedge fund named Standard General that effectively gained control of his stake in the business. But rather than represent his interests, the firm went against him, installing a board designed to carry out their will, he said.
As a translator relayed each new revelation to the crowd in Spanish, the workers gasped like they were watching a soap opera.
The people now in charge of American Apparel, Charney continued, don’t know how to manage the delicate balance between the factory and the stores. Products aren’t getting made, they don’t know what to produce, people are getting fired, and hours are being cut, he contended.
What’s more, they don’t have a connection to the history of the company, “and it’s dangerous,” Charney told the employees.
Now, it was time to hit back — the workers must organize, he said.
“It’s not about me, it’s not about you; it’s about us and the special connection we have,” he told the crowd.
After being asked about the worker gathering, an American Apparel spokesperson said the company “is and always has been a brand deeply rooted in social commentary.”
“As such, we support our employees’ right to free speech,” the spokesperson said in an email to BuzzFeed News. “And we remain committed to our core principles of providing fair wages to employees, and to sweatshop-free manufacturing right here in the city of Los Angeles.”
The gathering was the latest twist in the long American Apparel saga that began last summer. Charney, who has been unable to regain managerial or financial control of the company he created since his ouster last June, is now appealing to American Apparel’s factory workers, who are central to the retailer’s sweatshop-free, “Made in the USA” ethos.
It’s a vulnerable, largely immigrant workforce that’s faced a slew of uncertainty since American Apparel’s management upheaval began this summer, as Standard General took control of the company and most of the executive ranks turned over. While American Apparel’s new Chief Executive Paula Schneider started in January, it’s still struggling to stabilize — just last month, Schneider had to address an internal pro-Charney email campaign waged by an anonymous current employee, and made headlines for firing two longtime creative directors who worked under the founder.
Schneider seems aware of the potential for unrest among the textile workers, sending an email in Spanish to staff on Friday, reassuring them that their jobs were safe, and warning of “external forces” intent on harming the company. The full memo, obtained by BuzzFeed News, is published below.
It’s unclear how organizing a workforce coalition will help Charney win back his place atop a company that currently won’t even allow him to set foot on the factory floor. But the former executive told his troops on Saturday that it would be in their interest to have him reinstated as the head of American Apparel. He promised better working conditions, a return to the free-spirited culture that made the brand successful, an emphasis on loyalty to the factory workers.
“It’s about where we’re going to go,” Charney said to applause on Saturday. “It’s about sticking together.”
The audience needed little convincing, surrounding Charney for photo ops like a rock star after his address, as representatives of Hermandad Mexicana, an immigration advocacy group, diligently set about taking down names and phone numbers. Later today, the group, which is calling itself the “Coalition of American Apparel Factory Workers United to Save American Apparel,” is expected to issue a statement about the meeting.
Maria Luisa Salgado, a spokeswoman for the group, said the company’s current management “is estranged from the cultural spirit that existed at American Apparel under the leadership of its founder, Dov Charney.” She complained of intimidation and interrogations of organizers by “large and gruff security guards,” calling it “a violation of the United States Constitution and the National Labor Relations Board Act.” In the statement, the group called for an end to “blind reduction” of production hours and the furloughing of workers.
A source inside the company said any cutback in hours is a seasonal adjustment, especially given the holiday quarter, typically the busiest for retailers, just ended.
Charney, who founded American Apparel in 1998, was served with a termination letter in June for a long list of reasons including breaching his fiduciary duty, violating company policy — including sexual harassment and anti-discrimination policies — and misusing corporate assets.
The ousted executive worked as a paid consultant for American Apparel during an internal investigation that began in July, but he was officially fired in December. Charney’s lawyers described the investigation as “a complete sham” and said the decision to terminate him was “completely groundless.” Since then, a group of employees operating under the moniker #TeamDov has started a website petitioning for his return.
American Apparel’s new executives are aware of the pro-Charney insurgency within the retailer. One employee has been sending mass emails to employees slamming new management and Standard General, leading Schneider to respond to the messages in a Feb. 19 memo, BuzzFeed News reported last week. The #TeamDov website, with hundreds of messages showing support for Charney, is publicly accessible.
“I encourage you not to be influenced by unfounded personal attacks or baseless threats about job security sent by outsiders who do not have the company’s best interests at heart,” Schneider said in last week’s memo.
Standard General, for its part, said in December that its goal is to “help American Apparel grow and succeed.”
“We supported the independent, third-party and very thorough investigation into the allegations against Mr. Charney, and respect the board of director’s decision to terminate him based on the results of that investigation,” a Standard General spokesperson said in an email at the time.
American Apparel’s shares have fallen 16% this year to 87 cents each; they fell 16% last year as well. The company hasn’t posted an annual profit since 2009.
American Apparel, similar to chains like Chipotle and SeaWorld, lists unionization as a risk factor in regulatory filings, noting that the formation of such a group could halt work, raise labor costs, and hurt the company’s relationship with its employees.
American Apparel has historically prided itself on paying more than the minimum wage to sewing staff and other manual laborers and offering them benefits like on-site health care and massages, subsidized lunches, and affordable health insurance. Its workers have never unionized, though Charney noted he’s not “anti-union” in a 2004 interview, adding that if American Apparel’s workers wanted a union “they would have one.”
Translation of above email from American Apparel CEO Paula Schneider:
Dear appreciated employees:
As you know, I started at the company at the beginning of the year. I am writing to you to promise you that our commitment to you is still the same.
You are incredibly important to us: American Apparel wouldn’t be a success without your hard work and dedication. This company is much more than clothes-making. We stand up for fair wages and the equal treatment of our employees and all human beings. We will never abandon these values.
I would like to talk about a few things that you have probably heard. Over the past five years, days or hours of work have been cut down, this is not news. The decrease in work that you have seen will balance our inventory, so that we can position ourselves to start the summer/fall season, in full force. Salaries and benefits are still the same. The company is stable. These facts are true now and in the foreseeable future.
I know you feel that Dov fought for you. He protected you, your work and family. I know it must be hard to see him leave, and I will always support your right of expression.
I highly respect what Dov has built here. Like you, I am thankful to him for having started this company. Many of you don’t know me yet, but I share the same passion for the company, and the same belief in employees’ rights. All we do is pursue the goal of making this company great so that we can continue employing the highest number of possible employees with the benefits you deserve.
Please, know that there are external forces trying to cause trouble and affect our business. I ask you please, do not misinterpret actions. I did not come to American Apparel to change its values or its culture. I took this job because I believe in the company’s spirit, the one it has had and will always have. This is just the beginning of our relationship, but I would like to ask you for your trust that together we will achieve impressive things. It’s an honor for me to be the leader of this great company, and above all, to work with all of you.
With reporting assistance from Mariana Marcaletti.