Arbitrators ordered retailer American Apparel Inc. to pay more
than $3 million to resolve several claims of sexual harassment and
defamation against the company and its former chief executive, Dov
Charney, according to court documents.
Five former employees and models for the chain filed complaints
in 2011 in Los Angeles Superior Court against Mr. Charney and the
company. The claims were all sent to arbitration due to a company
policy that bars employees from resolving disputes in court. The
proceedings were confidential and remain sealed, but a judge
allowed the amounts of three awards to be disclosed after three of
the plaintiffs petitioned the Superior Court to unseal them.
The awards were disclosed in court documents earlier this year
but weren't publicized at the time by either side.
Mr. Charney referred questions to his attorney, who couldn't be
reached for comment. An American Apparel spokesman declined to
comment.
The three awards range from $200,000 to $2 million, according to
court documents. "We're pleased with the outcome of all of the
cases," said Toni Jaramilla, a lawyer who represented the three
women and petitioned the court to unseal the amounts.
With attorneys' fees and other costs, American Apparel paid out
more than $4.5 million in the three cases, according to the court
documents. The judge's order confirming one of the awards notes
that the company "does not admit liability, and continues to
dispute liability, as to all claims." in that case.
Allowing the disclosure of the awards' size signals the
seriousness of the allegations, said Mariko Yoshihara, policy
director for the California Employment Lawyers Association, which
has pursued the overhaul of arbitration accords imposed on workers
as an employment condition.
The amounts are unusually large for arbitration awards. The
average award for successful plaintiffs in employment-related
arbitrations is $110,000, research from Cornell University
shows.
Since his ouster last year, Mr. Charney and American Apparel
have been engaged in a bruising battle over control of the chain
and the terms of his dismissal.
Write to Lauren Weber at lauren.weber@wsj.com
Access Investor Kit for American Apparel, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0238501003
Subscribe to WSJ: http://online.wsj.com?mod=djnwires