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American Apparel Ousts Founder Dov Charney Over Alleged Misconduct

Montreal-born Dov Charney, the CEO of American Apparel, has been kicked out of the company that he founded in 1998.

In a statement released on Wednesday evening, the clothing chain's board of directors said it voted to oust Charney in light of an "investigation into alleged misconduct."

"We take no joy in this, but the board felt it was the right thing to do," said Allan Mayer, one of the two co-chairman appointed to replace Charney.

"DovCharney 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."

Charney, who was born and raised in Montreal, has been the subject of several lawsuits alleging inappropriate sexual conduct with female employees.

He has acknowledged having sexual relationships with workers, but said they were consensual.

The board said Charney would be terminated as president and CEO following a 30-day grace period.

John Luttrell, who is currently American Apparel's executive vice-president and CFO, has been appointed as interim CEO.

The board says it is working with a search firm to find a permanent replacement.

Charney could not be reached for comment on Thursday morning.

The company, founded by Charney in 1998, manufactures clothes and sells them in its 249 retail stores in 20 countries, with about 10,000 employees.

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American Apparel CEO Dov Charney has faced multiple accusations of unwanted sexual conduct, including accusations that he forced an employee to perform oral sex and kept one employee as a sex slave. According to American Apparel spokesman Peter Schey, Charney is currently involved with four sexual harassment suits that the company believes "have no merit." Charney told CNBC that such lawsuits are "a testimony to my success."
It Was Sued For Allegedly Firing A Cancer Patient
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American Apparel was sued in 2010 for allegedly terminating an employee who was undergoing cancer treatment, CBS Los Angeles reports. The company settled the lawsuit for $60,000 in 2011, according to Daily News. Spokesman Peter Schey told HuffPost that American Apparel "agreed to intensify its training about the requirements of the Americans With Disabilities Act" following the the settlement, and now "has a policy that goes above and beyond what the law requires with regards to accommodating people with disabilities."
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American Apparel hires workers only after taking a full-body photograph of them and has faced accusations that it only hires the best looking candidates, Gawker reports. Likewise, CEO Dov Charney reportedly personally went through photos of store employees and requested that any "ugly people" be let go, according to one store manager. For its part, American Apparel says its policy is to hire workers who are knowledgable about its products.
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In 2011, garment worker Tuan Phan was killed by a circular knitting machine at one of American Apparel's factories. Calling the incident a "freak accident," American Apparel spokesman Peter Schey said "the company immediately took steps to avoid this type of terrible accident ever happening again," adding it is "fully committed to worker health and safety."
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American Apparel paid out over $300,000 in damages after a worker sued for being called "n****r" by his superior repeatedly, Gawker reports. The company has also been accused of profiling customers, running racist ads and making racially insensitive products. "Under no circumstances does the company think racial slurs are appropriate," Peter Schey told HuffPost.
Its Ads Get Banned... A Lot
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American Apparel's racy ads have been banned repeatedly for showing nudity, supposedly being exploitative and sexualizing child models.
It Almost Went Bankrupt
American Apparel has been flirting with bankruptcy since 2010, coming especially close in the spring of 2011 after losing around $86 million. Despite calls for the company to outsource production due to the financial strife, it remained committed to "domestic production, fair wages [and] positive working conditions," according to American Apparel's Peter Schey. An $80 million credit infusion from billionaire George Soros in 2012, however, appears to have put the clothing company on more solid financial footing.
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In 2011, America Apparel ran a contest called "The Next Big Thing," which sought a plus-size model for its new larger line of clothing. Nancy Upton's collection of ironic photos for the contest was the popular winner but American Apparel chose not to give her the top prize because of her "attempts to discredit the positive intentions of our challenge," a spokesperson wrote at the time.
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American Apparel was forced to fire 1,800 employees after a federal audit unveiled irregularities in the documents immigrant workers provided American Apparel in order to get hired, The New York Times reports. "We interviewed every worker one by one to ensure that we were absolutely certain that we didn't terminate anyone who had a right to be here," American Apparel's Peter Schey told HuffPost.

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