Giancarlo D'Andrade's Blog

Human Rights / Environmental Disasters

Dow has one of the worst environmental legacies of any major company, encompassing Agent Orange, Asbestos, Dioxin, Dursban, DDT, Nemagon and Napalm.

But Dow wasn't the uncontested world leader in industrial accidents until they bought Union Carbide in 2001, and with it the legacy of the Bhopal catastrophe.

Bhopal Disaster

The Bhopal Disaster of 1984 was the worst industrial disaster in the history of the world. It was caused by the accidental release of forty metric tons of methyl isocyanate (MIC) from a Union Carbide India, Limited (UCIL) pesticide plant located in the heart of the city of Bhopal, in the Indian state of Madhya Pradesh. UCIL was a joint venture between Union Carbide and a public/private consortium of Indian investors.

The MIC leak killed thousands outright and injured anywhere from 150,000 to 600,000 others, at least 15,000 of whom died later from their injuries. Some sources give much higher fatality figures.

A November 2004 BBC investigation confirmed that the contamination is still active.

Factors Leading to the Disaster

The Union Carbide plant had been established in 1969 and had expanded to produce carbaryl in 1979; MIC is an intermediate in carbaryl manufacture.

The chemical accident was caused by the introduction of water into MIC holding tanks. The resulting reaction generated many large surges of toxic gas, forcing the emergency release of pressure. The gas escaped while the chemical 'scrubbers' which should have treated the gas were off-line for repairs. Investigations have revealed that several other safety procedures were bypassed (baffle plates to prevent water leaking into the tanks were omitted; tank refrigeration was offline; the flare tower that could burn off escaping gas was offline) and the standard of operations in the Indian plant did not match those at other Union Carbide plants. It was also alleged that these safety procedures were willfully toned down as a part of "cost cutting operations" at the Indian plant that Union Carbide was involved in at that time. Recent documents, obtained through discovery in the course of a lawsuit against Union Carbide for environmental contamination before a New York Federal District revealed that Carbide had exported "untested, unproven technology" to the Indian plant. After the release, the local doctors were not informed of the nature of the gas, thus hampering treatment, and basic disaster management measures (such as blocking all gaps with wet towels) were not planned for.

Union Carbide denies these allegations on its website dedicated to the tragedy. It cites a non-peer-reviewed investigation that concluded that a single employee secretly and deliberately introduced a large amount of water into the MIC tank by removing a meter and connecting a water hose directly to the tank through the metering port. Carbide claims such a large amount of water could not have found its way into the tank by accident, and safety systems were not designed to deal with intentional sabotage. UC says that the rest of the plant staff falsified numerous records to distance themselves from the incident, and that the Indian Government impeded its investigation and declined to prosecute the employee responsible, presumably because that would weaken its allegations of negligence against Union Carbide. Union Carbide has never publicly named or identified the employee it claims sabotaged its Bhopal plant.

The majority of deaths and serious injuries were related to pulmonary oedemas, but the gas caused a wide variety of other ailments.

Investigation and Legal Action Against Union Carbide

In an out-of-court settlement reached on February 14, 1989, Union Carbide agreed to pay USD $470 million for damages it caused in the Bhopal disaster. (The original lawsuit was for USD 3 billion.)

The CEO of Union Carbide at that time, Warren Anderson, who had retired by 1986, was declared a fugitive from law by the Chief Judicial Magistrate of Bhopal on February 1, 1992 for failing to appear at the court hearings in a culpable homicide case in which he was named the chief defendant. Orders were passed to the Government of India to press for an extradition from the United States, with whom India had an extradition treaty in place. However, the demanded extradition never materialized. Many activists allege that the Indian government has hesitated to put forth a strong case of extradition to the United States, fearing backlash from foreign investors who have become more important players in the Indian economy following liberalization. A seemingly apathetic attitude from the US government, which has failed to pursue the case, has also led to strong protests in the past, most notably by Greenpeace.

A plea by India's Central Bureau of Investigation to dilute the charges from culpable homicide to criminal negligence has since been dismissed by the Indian courts. To date, Anderson is still an absconder before the Indian courts and faces charges that if proven may result in imprisonment of up to 10 years.

Meanwhile, very little of the money from the settlement reached with Union Carbide went to the survivors, and people in the area feel betrayed not only by Union Carbide (and chairman Warren Anderson), but also by their own politicians. On the anniversary of the tragedy, effigies of Anderson and politicians are burnt. In July 2004, the Indian Supreme Court ordered the government to pay to victims, and families of the dead, the US$330 million remaining in the compensation fund.

Union Carbide sold its Indian subsidiary, which had operated the Bhopal plant, to an Indian battery manufacturer in 1994. The Dow Chemical Company purchased Union Carbide in 2001 for $10.3 billion in stock and debt. Dow has publicly stated several times that the Union Carbide settlement payments have already fulfilled Dow's financial responsibility for the disaster.

Ongoing Contamination

Ownership issues have led to a stalemate on the issue of cleaning up the plant and its environs of hundreds of tonnes of toxic waste, which has been left untouched. Environmentalists have warned that the waste is a potential minefield in the heart of the city, and the resulting contamination may lead to decades of slow poisoning, and diseases affecting the nervous system, liver and kidneys in humans. Studies have shown that the rates of cancer and other ailments are higher in the region since the event. Activists have demanded that Dow clean up this toxic waste, and have pressed the government of India to demand more money from Dow.

In an investigation broadcast on BBC Radio 5 on November 14, 2004, it was reported that the site is still contaminated with 'thousands' of metric tons of toxic chemicals, including benzene hexachloride and mercury, held in open containers or loose on the ground. Some areas are reportedly so polluted that anyone entering the area for more than ten minutes is likely to lose consciousness. Rainfall causes run-off, polluting local wells and boreholes, and the results of tests undertaken on behalf of the BBC by accredited water analysis laboratories in the United Kingdom reveal pollution levels in borehole water 500 times the legal maximum in that country. Statistical surveys of local residents, with a control population in a similarly poor area away from the plant, are reported to reveal higher levels of various diseases around the plant.

The following is reprinted from Bhopal.net:

Most people, when they think of Bhopal, recall only the horrors of 'that night', when gas leaked from the Union Carbide factory and killed thousands. What is not generally known is that the poor of Bhopal have suffered a second disaster which is still injuring and killing them to this day. The cause? The same killer factory.

After the gas leak, Union Carbide's factory was closed and for all practical purposes abandoned by the company. To this day you can see piles of dangerous chemicals lying in the open air. The warehouses are full of sacks of poisons, many of which have split open. Children and animals have been in and left footprints in the chemical dust. The structures and buildings on the site have been left to rot.

The monsoons of two decades have washed the chemicals deep into the soil and into the underground aquifers which feed wells and boreholes. The drinking wells and tap of communities living within a considerable radius of the plant have been contaminated with chemicals that are implicated in cancers and birth-defects. People have no other water supply and have been forced to drink and wash in Union Carbide's diluted poisons. 20,000 people are affected.

The French writer Dominique Lapierre, author of Five to Midnight in Bhopal wrote in 2002:

"I wanted to reckon the aggressiveness of this pollution by drinking half a glass of the water of one of those wells. My mouth, my throat, my tongue instantly got on fire, while my arms and legs suffered an immediate skin rash. This was the simple manifestation of what men, women and children have to endure daily, some eighteen years after the tragedy."

People meanwhile are ill from the water. In many cases these are the same families who were decimated by the gas in 1984. A whole new generation is being poisoned. People complain of aches and pains, rashes, fevers, eruptions of boils and other skin complaints, headaches, nausea, lack of appetite, dizziness, constant exhaustion. Lead, mercury and organochlorines have been found in the milk of nursing mothers living near the factory with the result that women are terrified to breast-feed their babies because they are feeding them poison.

This poisoning has been going on for decades. The first signs appeared in the early 80s, before the gas leak, when animals grazing near the factory became ill and died. The complaints of their owners were settled out-of-court. The company continually denied that the factory was contaminated or was responsible for polluting water, but it is clear from internal Carbide documents obtained via "discovery" in the New York court case (see below) that it had carried out tests and knew as long ago as 1989 that soil and water within its boundaries were lethal. It chose not to make this knowledge public, instead continuing to deny that any danger existed.

It was not until 1999, ten years later, that the first systematic study of the contamination was carried out by Greenpeace. Samples of soil and water were analyzed at labs in the UK. In some places levels of mercury were six million times higher than expected. Local drinking water was found to be heavily laced with cancer- and birth defect-causing chemicals. You will find the Greenpeace report here. Scroll down for more articles and resources.

Survivors' organizations have fought back, demanding that clean safe water be piped to the affected communities, that the factory site be decontaminated and the toxins lying there removed, that Union Carbide which abandoned the plant knowing full well the dangers of what it had left behind, should pay for the medical treatment of those who are ill for as long as the illness lasts and that families should be compensated for their years of ill health and loss of earnings.

Union Carbide, which is now a 100%-owned subsidiary of Dow Chemicals refuses to clean up the plant or accept responsibility for the damage it has caused to people's health and livelihoods. It maintains that the state government of Madhya Pradesh should be held responsible. The state government and central governments meanwhile hold Union Carbide responsible for paying for a clean-up.

Survivors campaigning for clean water successfully petitioned the Supreme Court of India, which ordered in May 2004 that clean, safe water be piped into the communities. The state government has, until the time of writing (March 2005) ignored this order. A few tankers of water go into the affected areas, but supplies are sporadic. There are things you can do about this. Please see the list below.

Survivors have also filed a Class Action suit against Union Carbide on the issue of contamination and water poisoning in a New York court. The case is currently underway, four attempts by the corporation to have it dismissed have failed.

more to come. Apple Computers will be the next subject, after DOW is finished

Saran wrap and Styrofoam are just two of the better-known household contributions of the Dow Chemical Corporation. Dow’s lesser-known household contributions are the many poisons released from the chemical giant’s factories and products that have trespassed into the environment and people’s bodies.

“Living Poisoned Daily”, an adaptation by the Bhopal survivors of Dow Chemical’s slogan “Living Improved Daily”, reflects the fate of hundreds of thousands of men, women and children forced to contend with a life affected by poisons as a result of Dow’s business.

Operating some 208 manufacturing units worldwide, The Dow Chemical Company is the one of the largest chemical corporations in the planet, and is named as a Potentially Responsible Party under US federal or Superfund laws at 24 toxic sites.

At 2.5 million tonnes a year, Dow’s Vinyl Chloride production is the highest in the world. It also makes Dow one of the largest manufacturers of the poisonous plastic PVC. Every stage of PVC’s lifecycle – production, usage, disposal or recycling – is associated with the release of some of the deadliest poisons known to science.

Although Dow products and activities are themselves responsible for trauma suffered by numerous communities – from its hometown in Midland, Michigan to distant Vietnam – its February 2001 acquisition of Union Carbide adds substantially to the toxic skeletons in the company’s closet. Despite this, Dow and Union Carbide remain ardent advocates of the chemical industry’s unconvincing Responsible Care program.

A voluntary code relating to the chemical industry’s conduct towards the environment, communities and its workers. The program has been dismissed as a PR exercise by many such as the US-based Environmental Working Group. In the 1990s, the US-based chemical manufacturers’ association spent $1 million to $2 million annually on Responsible Care programmes even while spending five times that amount on advertisements about the programme.

Of course there is more to come, I've decided to write in shorter bursts because some persons were complaining about the size of these reviews.

In 1954 cigarette manufacturers ran an historic "advertorial" in over 400 U.S. newspapers called the "Frank Statement to Cigarette Smokers" in which they stated their overriding concern for public health and promised to "cooperate closely" with public health authorities over concerns that cigarettes caused cancer. Instead, cigarette companies followed the ad with decades of deceitful actions that cost millions of lives. Is the food industry now following the lead of the tobacco industry? While food and tobacco are two very different issues, the food industry appears to be following a playbook similar to that used by the tobacco industry in responding to concerns that their products cause harm. The main features of the strategy include cultivating fears that government action infringes on personal freedom; focusing on personal responsibility as the sole cause of unhealthy diets; characterizing studies that hurt the industry as "junk science"; promoting the idea that there are no good or bad foods (thus no foods in particular should be targeted for change); vilifying critics by portraying them as "food police" and leaders of the "nanny state;" forming front groups to advocate industry positions; engaging in self-styled "corporate social responsibility" programs and promoting self regulation as the best answer to the public's concerns. Will the food industry choose to take real actions that promote public health, or will it "supersize" past tobacco industry strategies that caused the deaths of millions of people? The food industry has an opportunity now to not only talk about the moral high ground, but to occupy it.

-Giancarlo D'Andrade

Source: The Milbank Quarterly Volume 87, Number 1, March, 2009

Part 2 of the review. Excuse me for the vulgarity about to follow in this article. I am simply quoting or paraphrasing others.

Sex gets attention.

Dov Charney knew this when he designed his company's ad campaigns, and knew it when he began exhibiting his personal sexuality in interviews and advertisements. The CEO of American Apparel must therefore have known what to expect when four former employees brought sexual harassment lawsuits against his company, and when Jane Magazine published a graphic account of what appeared to be his aggressive sexual advances towards a female reporter.

In July of 2004, Claudine Ko's now infamous American Apparel article appeared in Jane magazine. In it, Ko gave this account of a meeting with Charney and an unnamed American Apparel employee:

"I asked him how he relaxed. Oral sex he says, settling into a chair behind a cloud of smoke. 'I love it … I am a bit of a dirty guy, but people like that right now.'

Explaining exactly how the rest of the night unraveled is somewhat difficult. Let’s just say, the female employee helped him 'put on a show' for me. I watched, trying to be objective, detached - sorta like a … war reporter?"

Later in the article, Ko describes a trip to Charney’s home for a late night 'interview session':

"Soon enough he loosens his Pierre Cardin belt.

'Are you going to do it again?' I ask.

'Can I?' he says adjusting himself in his chair.

And thus begins another compulsive episode of what Dov likes to call 'self-pleasure,' during which we casually carry on our interview, discussing things like business models, hiring practices and the stupidity of focus groups.

'Masturbation in front of women is underrated,' Dov explains to me later over the phone. 'It’s much easier on the woman. She gets to watch, it’s a sensual experience that doesn’t involve a man violating a woman, yet once the man has his release, it’s over and you can talk to the guy."

In the Jane article, Ko claims that in the month she spent with Charney, she watched him pleasure himself "eight or so" times. She ends the article with a description of leaving Charney in New York, interview completed, and hailing a cab. “Then as I step into the depths of the backseat, I realize I don’t want this trip to end just yet.”

In response to the Jane article, Charney claims that Claudine Ko told only half the story. "We had a relationship, you know. ... We got jiggy. It was a beautiful thing," Charney told me laughingly. "Then I see this article and she's written all these things about me."

As for Ko, she has publicly agreed with Charney's version of the story, telling one blogger after the fact, "Whenever I see a picture of Dov I can’t help but smile and think fondly of him. That reporting experience was fun, engaging, stimulating and interesting. Dov Charney is a mad man and I like that." Ko also told Businessweek magazine her relationship with Charney was entirely consensual.

Charney, for his part, candidly admits to engaging in consensual relationships with employees, and being open to such relationships in the future. He has repeatedly asserted in the press that consensual relationships between adults should not be restrained in the workplace.

It is worth noting that while it is legal for superiors to make advances toward their employees as long as those advances are welcome, the lines certainly begin to blur when power, sex, and employment are allowed to interact so freely. In Miller v. Department of Corrections, for example, The California Supreme Court unanimously held that sufficiently widespread sexual favoritism can convey a demeaning message to female employees that they are viewed by management as "sexual playthings," creating an actionable hostile work environment under California's Fair Employment and Housing Act ("FEHA").

San Francisco attorney Phil Horowitz, chair of the California Employment Lawyers Association, told Businessweek: "Any chief executive who's thinking of having sex with subordinates ought to have his head examined."

It turns out Charney's head was destined to be examined by the public. In the summer of 2005, four plaintiffs filed three separate sexual harassment lawsuits, claiming that while working on American Apparel's staff they endured sexual misconduct, innuendo and an environment in which women did not feel safe.

Heather Pithie, who worked at American Apparel as a recruiter between June 2004 and March 2005, charged that Charney referred to women in vulgar, derogatory and sexual terms. She said in her suit that she was "terrified" of being alone with him, and claimed that Charney once called her into his office with a co-worker and gave them both vibrators, saying, "It's great during sex." At another time, the lawsuit claimed, Ms. Pithie was recruiting in LA when Charney instructed her to talk to a young woman because she was "hot." He offered the woman a job on the spot, she claimed.

Rebecca Brinegar, who coordinated trade shows and worked in customer service between December 2002 and January 2005, charged that Mr. Charney exposed himself "in the nude in front of her," told her to "grow a dick", and told her that he "needed hotter pussy" at trade shows. Ms. Brinegar claimed that despite her complaints, Mr. Charney continued this behavior, leading to her departure from the company.

Ms. Pithie and Ms. Brinegar both quit their jobs and filed joint lawsuits in June 2005.

According to American Apparel's press agent Cynthia Semon, Charney has spent thousands of dollars litigating each of the allegations made against him because he is innocent and determined to clear his name.

The Pithe/Brinegar case was recently dismissed, with prejudice as to defendants American Apparel and Charney, in February 2006.

A second harassment suit was brought in 2005 by a former employee who had never met Charney, but claimed that she was exposed to a hostile work environment in an American Apparel retail store. Specifically, the plaintiff complained about a collage of vintage Penthouse magazine covers used to decorate the store. American Apparel responded by stating that "vintage magazine covers (which included Playgirl and news magazines such as Life and Look), were art and fashion artifacts — a celebration of sexuality, pop culture and kitsch from the 70's and 80's".

A United States Federal District Court Judge entered the order in favor of American Apparel on November 3, 2005, dismissing with prejudice the case brought by the former employee, who received no money from the case.

The fourth-and sole remaining-case was brought by Mary Nelson, an American Apparel sales manager from November 2003 to January 2005. Ms. Nelson claims in her lawsuit that Charney invited her to masturbate with him, used inappropriate and demeaning language in her presence, and conducted business meetings with her in his underwear. Charney, in turn, asserts that Ms. Nelson is suing him because he didn’t renew her contract, and accuses her of being a substandard, disgruntled employee.

Reporters at length with Keith Fink, legal counsel to Mary Nelson, regarding his client's case and all of the sexual harassment charges Charney has faced.

According to Mr. Fink, Mary Nelson brought suit against Charney following the January 2005 rape of an American Apparel model, committed by a fellow employee, at a company trade show in Las Vegas. After the rape occurred, Ms. Nelson was allegedly sent into the victim's room to "take care of her" emotionally, and subsequently came to believe that Charney and American Apparel were ultimately to blame for the crime.

"Mary had warned Dov that something like this could happen," Fink said. "She realized this [rape] had occurred in large part due to the environment fostered by Dov hiring drug addicts, and having drugs and alcohol present at tradeshows. She spoke with Ms. Brinegar, and she and Rebecca decided enough was enough; they were going to see a lawyer. At the time they told a third employee that she should consider joining them to see the lawyer, and that third person turned out to be a stool pigeon who informed the company of her intentions to sue. ... We have the testimony of company representatives who admit that only then did they decide it was time to fire Mary Nelson; she was far from a substandard employee."

Ms. Pithie and Ms. Brinegar eventually retained Attorney Gloria Alred as their legal counsel, while Ms. Nelson chose Mr. Fink to represent her. "Gloria's clients weren't as tough as my client is," Fink said. "They sort of rode on my coat tails, used all my depositions, and didnt do any work."

Still, Fink claims, "They filed a lawsuit, and they had [Charney] dead, simply based on the evidence that I had garnered... but instead they went into a mediation, and they entered into a confidential settlement agreement. They can't talk about the facts of the cases, and they had to agree to have the suit 'dismissed with prejudice.' Now American Apparel is talking about these cases as 'dismissed with prejudice' as if that means Charney was vindicated, when in fact I'd bet they settled for hundreds of thousands of dollars to reach those decisions."

Mr. Fink claims that it is standard practice at American Apparel to pay off employees who complain of sexual harassment, and points to the case of Tina Pellegrino, a former employee who filed a restraining order against Charney, claiming he harassed, threatened and beat her, and whom Fink claims has been paid to "keep quiet."

American Apparel claims that Charney and Tina Pellegrino were friends for years, prior to the disagreement which resulted in the restraining order. Following a confrontation with Charney, Ms. Pellegrino left the company and filed the restraining order. As of this writing however, Ms. Pellegrino has reportedly mended her relationship with Charney, and has returned to work at American Apparel. She expressed interest in commenting for this article, but was unable to be reached by press time.

"I dont think you're ever going to find an individual as cavalier, and unconcerned about the laws in this country as Dov Charney," Fink said. "He views himself somewhat as a modern day Larry Flynt. ... What is truly bizarre about this is that usually in [sexual harassment] cases they're just allegations; 'he said she said.' In this case, Charney admits to most of it and claims it's his First Amendment right!"

Knowmore.org has obtained transcripts of Dov Charney, Vice President Martin Bailey, and Human Resources Director Kristina Morena being deposed for the Nelson case, in the course of which the following exchange takes place between Keith Fink and Dov Charney:

Fink: Did you ever, at work, refer to women as “sluts”?

Charney: In private conversations, where such language was generally welcome.

Fink: Do you view "slut" to be a derogatory term?

Charney: You know, there are some of us that love sluts. You know, it’s not necessarily—it could be also be an endearing term.

Fink: An endearing term. Is that something you call your mother?

Charney: No. But it’s maybe something that you call your lover.

Later in his deposition, Charney admits to using a number of explicit terms for female body parts—including the word "cunt"

Charney: During the period when she worked, did I use the word cunt?

Fink: In the workplace?

Charney: Absolutely, as she did.

Fink: I didn’t ask you if she did.

Charney: I’m telling you a little more. I’m volunteering a little more ha ha [sticks out tongue].

In the Nelson case, Charney and his lawyers are expected to argue that it is perfectly appropriate for Charney to take off his pants at the workplace. They argue that Charney is in the business of selling underwear, and also serves as a fit model for the company (hence the need to try products on at work). Charney also claims he builds enthusiasm for the product by modeling it.

Fink: At the workplace in the years 2003 and 2004 how often in the work week would you be in your underwear?

Charney: There were months I was in my underwear all the time. It became very common. ... There was a time in fact we put it on the Internet that I was running around in my underwear.

Fink: Why did you do that?

Charney: To be humorous.

Fink: And did all the employees tell you that they thought it was funny seeing the CEO walk up and down the workplace in his underpants?

Charney: We had people cheering.

In his videotaped deposition, Charney declined to answer whether he had ever had sex in the workplace, or to discuss which women in the company he’s been involved with. However, Human Resources Director Kristina Moreno admitted in her deposition that she has witnessed Charney having sex with employees on the fourth floor at the factory.

This exchange took place between Charney and Keith Fink on the subject of sex in the workplace:

Keith Fink: Now, as you understood this American Apparel policy or spirit of having freedom in the workplace, does that encompass American Apparel employees having sex at the workplace?

Dov Charney: Provided they’re in a private setting and no one else is aware of it and they’re on their break.

Fink: How about if they take their 10-minute break which the law allows them and they go into a supply closet and no one can see them and they actually have intercourse?

Charney: Well if no one could see them and or there is a reasonable expectation of privacy, I’m not going to run rush in like some Nazi and tell them to stop having consensual activities.

In a recently aired episode of Dateline NBC, a former American Apparel employee anonymously told Dateline correspondents that Dov Charney was "eager to pursue a number of his subordinates."

"It was understood that Dov was looking for sex almost constantly... [and that] he was looking for sex from his employees," said the employee. "His language was constantly inappropriate talking about sex, talking about—his own genitalia, talking about—other people’s.""

While the former employee acknowledged that he was fired by Charney, his account of Charney’s behavior was backed up by six other former employees Dateline spoke with, from American Apparel locations in three different cities.

Charney declined to speak with Dateline, but a company spokesman said NBC's sources were “disgruntled ex-employees” asserting “blatant falsehoods under a cloak of anonymity.”

Regarding plaintiff Mary Nelson, Charney had the following to say in his deposition:

Keith Fink: Did you ever ask Ms. Nelson if she would masturbate in front of you?

Dov Charney: No.

Fink: Did you ever say to Ms. Nelson you had so much faith in her that she could come over to your house, watch TV, have a drink, even masturbate and leave, and you would still have faith in her?

Charney: I don’t recall making that statement.

Fink: Is the “don’t recall” a categorical “No,” you didn’t, or you just don’t remember?

Charney’s lawyer: Objection; argumentative.

Here American Apparel makes two arguments: First, they don’t agree Charney made the comment. Secondly, they say even as described, it’s an offhand remark and not an actual invitation. Mary Nelson claims Charney did make the comment — while they were discussing whether she would get a raise.

And finally, at issue in the Nelson case is an infamous business meeting held at Charney's L.A. home, which Mary Nelson claims to have attended.

Fink: [former supervisor Tony Augistine] recalled you wearing a sock on your penis while Ms. Nelson was in your home, is that correct?

Charney: The product is called a cock sock.

Charney says he doesn’t recall whether Ms. Nelson was present at the meeting, but he says there wouldn’t be anything wrong with wearing the item in front of her. He says he was simply modeling a potential new product.

Dov Charney and American Apparel have repeatedly claimed that all of Mr. Charney's accusers were substandard workers, who never complained about his behavior while at the company.

“It was well known that I was a pretty open person,” he told The Jewish Journal. “They just want money.”

“I’m an atheist, but I swear on the Torah, my bubbe and my zayde, that I had one fantasy about these women,” Charney continued. “Want to hear it? I wanted to fire them all. I thought they were all lousy employees from the beginning.”
According to Keith Fink, however, Ms. Nelson was an excellent employee and the decision to fire her was made after company executives learned she had seen a lawyer. Mr. Fink claims that Tony Augastine, a former supervisor of Ms. Nelsons, will testify to that effect. Additionally, Mr. Fink claims that Mary Nelson received a raise a few months before being fired from American Apparel.

"We can show evidence that Ms. Nelson was given a raise, from $60,000 to $70,000 annually," Fink said. "That's a problem for Dov Charney. Dov and Pat Honda have both lied and denied that Mary Nelson was given a raise. They've painted a story that is factually inaccurate and I have the paperwork to show they're lying."

Mr. Fink claims that Charney's lawyers have submitted to the court a fraudulent piece of paper which Dov knows is not contract, indicating that Mary's salary would remain the same. Fink also claims to be in possession of an actual checkstub, which Mary Nelson kept, that contradicts the false contract and shows the raise she was given months before her termination from the company.

Additionally, Keith Fink provided reporters with an American Apparel company printout which allegedly shows the amount of new business brought into the company by Mary Nelson in the year before she was fired.

"The printout shows Mary Nelson bringing in over 7000 percent growth on some accounts, though Dov has said she brought in no accounts," Fink said.

"What they really want to do is drag this out to 2008 and make me spend millions of dollars, and hope that we'll go away for a small settlement," Fink concluded. "If Mary Nelson only wanted money she could've snapped up settlements like the rest of the these people who've gone away. Ask them if they've ever made her an offer, see if they'll deny it. Mary Nelson doesn't want money. This is a slam dunk. Dov Charney is going down. American Apparel is going down."

Since the filing of Mary Nelson's lawsuit, American Apparel has begun requiring employees to sign an arbitration agreement. The agreement reportedly prevents workers from suing the company on the grounds of established elements in the workplace such as language, decor and behavior. While company representatives claim they are attempting to cut down on frivolous lawsuits with these agreements, critics are accusing them of silencing employees who object to inappropriate policy.

"Why are employees being made to sign arbitration agreements when Mr. Charney wants to run his company on a culture of freedom?" Keith Fink said. "Is he afraid of a jury deciding if the way he runs his business is legal in this country?"

Criticism and Defense of Advertising

In 2005, Jason Rowe, a columnist for NYU’s Washington Square News described American Apparel's ads as, “Photographs of young women in compromising positions, some as young as fifteen... juxtaposed alongside text giving accounts of meeting the models on the street and inviting them to be photographed... conveying the feeling of some sort of perverted conquest." Rowe called the ads "sexually exploitative" and noted that they "seem more like amateur pornography than anything else."

As American Apparel's slinky ads have spread across urban landscapes, the internet, and the pages of weekly culture rags, many commentators have begun to voice similar criticism. The ads have been compared to child pornography, called "sleazy" and "creepy," and have constantly been linked with Charney's rumored sexual antics and legal battles.

In a 2005 interview with NowToronto.com, Media Watch founder Ann Simonton called for a boycott of American Apparel products over the ads. "This is beyond 'sex sells,'" Simonton told the interviewer. "It goes to a level of humiliation."

And yet the same NowToronto article found Charney's ads being defended, by porn star turned PhD sexologist Annie Sprinkle.

"I like the sweat, the grit, the reality," Sprinkle said. "He obviously appreciates female sexuality in all its glorious sleaziness. And I think you can worship female sexuality and also worship women in the workplace. If you see sex as bad, dirty, and ugly, then you're going to see these ads as bad, dirty and ugly. These ads are kind of a mirror. In a way, they're almost neutral."

Reporters spoke with Alexandra Sprunt, head of American Apparel's marketing department, about the ads. Ms. Sprunt echoed Annie Sprinkle's defense, explaining that many of the controversial photographs used for the ads were culled from "random shots" taken by a number of employees and their friends.

As evidence of this "random" motif, which she claimed Charney created in the company's early days, Ms. Sprunt showed me an American Apparel print ad featuring a picture of an elderly couple in Montreal, and another featuring a car's bumper in the company parking lot.

She also singled out ads featuring photos she and her friends had taken, and told me the back-stories behind some of the images.

"If you saw this without knowing where it came from you might just think it's a dirty picture I guess," she said of one photo. "But to me that's a great picture from a funny night that sort of captures what me and my friends do when we hang out."

This is a central feature of the company's defense of its advertising: that the ads it uses are the natural outgrowth of a genuine youth culture at the company. In defense of their advertising, company representatives often point to a "sexy lifestyle" being lived by the company's employees, from which the ads spring spontaneously. The company goes so far as to include a "gallery" section on its website, featuring collections of amateur photography by employees, videos of photo shoots and office Christmas parties, and other pieces of what the site calls "American Apparel Culture" In a way then, American Apparel wants its ads to be viewed as spontaneous art, produced by and among its employees, featuring its employees.

But isn't there a difference between art and advertising? And what about those who don't want to participate in American Apparel's sexy "youth culture"? Isn't there still something basically irresponsible in plastering city buses and park benches with pictures of spread eagle girls blowing bubblegum, for the sake of selling t-shirts?

In conversations with American Apparel's press agent, Cynthia Semon, she acknowledged that the ads are just that: advertising. They are created in a prescribed way, to appeal to a targeted audience with the aim of selling goods to that audience. In this way, they are fundamentally different from art created for art's sake.

However, Ms. Semon still defended the company's ads by comparing their critics to those who would censor erotic art.

She and American Apparel assert that it is the viewers individual responsibility to curb the harmful societal trends blamed on advertising and art. Parents should educate their children about sex and raise them properly, she maintains; advertisers should not be faulted for selling their products as they see fit. "No corporation can influence a child more so than their family," she said.

Many critics of advertising disagree. In her book Can't Buy My Love: How Advertising Changes the Way We Think and Feel

, author Jean Kilbourne takes exception to the kind of 'individual prevention only' approach to social problems that Ms. Semon is advocating. Kilbourne argues that there is a need for a more widespread, "systems approach" of regulating businesses and advertising if people are to curb the social problems they are linked to. She writes:

"People make choices, for better or worse, in a physical, social, economic, and legal environment. The credo of individualism and self-determination ignores the fact that people's behavior is profoundly shaped by their environment, which in turn is shaped by public policy. Certainly individual behavior and responsibility matter, but they don't occur within a vacuum. ...

The systems approach is easily misunderstood because some of the interventions can seem trivial, especially in light of the extent of the problems. When some parents in a Boston suburb complained about an advertisement for beer in a Little League field, a well-known Boston columnist ridiculed them as "touchy-feely, politically correct busybodies" who thought the ad would immediatly "turn their kids into drunks."... Like a lot of people, he completely missed the point. Which is that we give a message to our children about the normalcy of beer-drinking and about societal expectations when we allow such an ad on a Little League field. A single ad-or scores of ads- won't turn kids into drunks, but they are part of a climate that normalizes and glamorizes drinking, and research proves that this especially effects young people.

Ms. Kilbourne writes that where a focus on individual prevention has failed to curb social problems like drinking and tobacco use, systems approaches have succeeded dramatically.

She uses as an example the history of antismoking organizations, who for years focused on the individual smoker as "the problem," offering consumers health information, pictures of diseased lungs and advice for quitting. Data showed, however, that an individual prevention approach was not improving public health. Antismoking organizations then began switching their strategies, highlighting the role of the environment and the institutional responsibility of the tobacco industry. Bans were placed on cigarette advertising and promotion, aggressive counteradvertising was created, and higher taxes and better warning labels were placed on cigarettes.

As a result of this shift to a systems approach, consumption of cigarettes has plummeted in states that launch aggressive anti-tobacco campaigns, and the norms for cigarette smoking have changed dramatically in the past 20 years.

But do ads that use sex to sell contribute significantly to a harmful environment? A number of academics, activists, and consumers seem to think so.

Mallory Hanora, a feminist and contributor to Knowmore.org, had the following to say about American Apparel's ads:

"American Apparel is built not only on what it sells, but how it sells it. If worker's rights are truly important to the production of a t-shirt, why isn't the objectification of female models important in the process of selling that t-shirt? After all, the models in American Apparel's advertisements are part of the company's workforce. For a so called visionary company, it's hypocritical and shortsighted to trumpet the influence you have over labor policies in garment manufacturing, but deny that same influence over marketing by submitting to the sexist, exploitative status quo in advertising."

With the help of Alexandra Sprunt and Cynthia Semon at American Apparel, I compiled a diverse collection of about 80 of the company's ads from the past two years. The ads were then shown to Dr. Susan Bordo, Professor of Gender and Women's Studies at the University of Kentucky. Dr. Bordo is the author of numerous books involving gender, cultural images and their relation to body image issues, including Unbearable Weight: Feminism, Western Culture, and the Body. She had the following to say about American Apparel's advertising:

"My biggest complaint against ads such as these is the way they get away with soft-core porn body postures and motifs -- for example, spread legs and orgasm-like facial expressions, done in an 'unposed' polaroid-type style -- under the guise of being 'young, fresh, and authentic.' The marketers use post-modernism and 'youth culture' ideology as an excuse for moving the bar lower and lower regarding what is acceptable to show. Calvin Klein was the first to employ this strategy in his famous 1994 series of TV ads, which looked like home movies with underage models, and which were ultimately yanked from the air. Klein defended the ads by saying the models weren't actually underage (as though that were the issue) and by insisting that for him they had less to do with sex than with spontaneity and youthfulness. The idea: These young people are simply being 'natural'; it's the sleazy-minded viewers that see the dirty sex in the ads.

The reality of imagery is, however, that the more stylized and polished photos are -- the more 'high fashion' drama they express -- the less pornographic they look. In the posed, glossy, and highly stylized photos of most (not all) fashion spreads, the models do not look like they've been caught unaware or don't fully understand the meaning of what they're doing. They look like models. These American Apparel ads, in contrast, which pride themselves on using 'real people,' for that very reason have a much more pornographic edge to them.

It's distressing that the same kind of images that had to be taken off TV in 1994 are, in 2006, are stuff of 'left-wing' advertising!

Do the images have an effect? All you have to do is walk down any suburban street and you'll see the answer to that. Six and seven year olds, who don't have any real idea of what they are doing, are aping the poses, the gestures, the personae. Young, fresh, and spontaneous? Or little girls learning how to play by the current rule that if you aren't sexy, you aren't worth anything?"

Charney remains dismissive of those who would criticize his company's ads. In our conversation, Dov pointed to soaring profits as evidence that "the average consumer doesn't care about this stuff. Most people are responding to our ads. All of this criticism is academic. ... It all comes down to personal taste. Look it's not like I'm selling beer, you know. We're selling sexy underwear, so we have sexy ads!"

This has been my look into American Apparel. Next Up: DOW chemical or Exxon Mobil. I can't decide...

-Giancarlo D'Andrade

American Apparel is the largest garment manufacturer in the United States, and as of this writing employs roughly 4,500 workers out of a single factory in downtown Los Angeles. Its growth in the past five years has been astonishing; from 2002 to 2004, the company repeatedly doubled its annual sales figures, and has opened 130 retail stores worldwide in the past three years. 38 of which are in Canada.

American Apparel has garnered substantial praise, attention, and profits due to its one-time self-labeling as "Sweatshop Free." Formerly, the company's catalogue included a photographic essay of immigrant sewers and cutters at work, and nearly every company press release carried the subheading “Los Angeles Based Sweatshop Free T-Shirt And Apparel Company.” Ads, billboards and clothing tags repeated the claim, affording hipsters with a conscience the opportunity to buy a quality product from an ethical source. In 2002, American Apparel sold stylish revolution to the tune of $40 million dollars.

In November of 2003 the Union of Needlework, Industrial and Textile Employees (UNITE), accused American Apparel of obstructing union efforts to organize workers. According to UNITE, American Apparel was guilty of union-busting activities, including the interrogation of workers about their support for a union, the solicitation of workers to withdraw their union authorization cards and threatening to close the factory if a union was formed. The company was accused of printing anti-union armbands and making employees wear them, in addition to forcing employees to hold an anti-union rally in the warehouse parking lot.

A no fault settlement was eventually reached with the NLRB, but one year later the "sweatshop free" claim had disappeared from company press releases and ads. Anti-sweatshop activists and organizations had begun censuring the company's actions publicly and withdrawing their support, and Charney (The CEO and Founder of American Apparel) was telling the Los Angeles Business Journal “[being sweatshop-free] is a secondary appeal and I'm getting a little bored with it... I’m de-emphasizing it.”

Next a rather bizarre flurry of news reports surfaced concerning Mr.Charney and his activities within the company.

A February 2004 article in Jane Magazine described Dov Charney as engaging in oral sex with a female employee and masturbating in front of the female reporter.

Later that year, Dov was quoted in the McGill Daily as saying: "Feminism is extremely restrictive. You can’t call a woman a bitch, you can’t call her this, you can’t call her that. But that’s what life’s really like. Yet she can do whatever she wants. It’s out of balance and that’s why young people haven’t embraced feminism, because it’s out of balance.” Later in the same interview, Charney is depicted as ranting about "lawsuit culture," and famously stating, "Women initiate most domestic violence.

"Lawsuit culture" came home to Mr.Charney with three former female employees filing sexual harassment suits against him. In their suits, two of the women accused Charney of exposing himself to them. One woman said he invited her to masturbate with him and that he ran business meetings at his Los Angeles home wearing close to nothing. Another employee said he asked her to hire young women with whom he could have sex. All of the women filing suit described Charney using "foul language" in their presence, much of it demeaning to women.

While reporting on the suits in June of 2005, BusinessWeek spoke with seven former workers who claimed they took offense with what they called a "highly sexual atmosphere" at American Apparel. They told of senior managers who pursued sexual relationships with subordinates, and rewarded their "favorites" with promotions, apartments and company cars. BusinessWeek quoted one former employee as saying, "It was a company built on lechery.

In the year that followed, Charney's legal battles, infamous behavior, and inflammatory statements in the press brought renewed scrutiny to American Apparel's notoriously risque advertising. Many commentators began drawing connections between Charney's openly sexual ethos, the charges brought against him, and American Apparel ads that often seemed to resemble amateur pornography.

Worker's Rights at American Apparel

At the time of the UNITE union drive in 2003, American Apparel workers were making an average of $7. The company offered Health Benefits to workers at $60 per family, per week, and $8 a week for a single person. Workers received no paid sick days, vacations or holidays.

Following the NLRB settlement in January of 2004, some paid sick days, vacations and holidays were added.

Since 2003, the company has nearly doubled its profits every year, and the workforce it employs has nearly quadrupled. Correspondingly, benefits to American Apparel's workforce have grown with the company.

As of this writing, average pay for an employee on the sewing floor is $12.50 an hour, with some sewers earning as much as $18 an hour. Base pay at the company is $8 an hour. Workers have access to company-subsidized health insurance for $8 a week with the same benefit available to spouses. Health insurance for each of a workers' children costs $1-$3 per child, per week. The company also offers dental insurance for less than $1 a week per employee, and is about to begin construction of an on-site clinic where workers and workers' families can be treated.

Therein lies the philosophy that seems to infuse the entire company: by recognizing the symbiotic nature of company and worker, and actively seeking to benefit both equally, American Apparel succeeds where others fail.

Since being hired in 2002 to revamp the company's manufacturing process, Vice President Marty Bailey played an important part in boosting profits and employee earnings at American Apparel. Under Bailey's guidance, the company switched in 2002 to a custom designed "modular" manufacturing system. In the modular (or "team") system, employees on the sewing floor are placed in teams of 8-10 closely grouped sewing stations. Each worker in the team repeats a step in the garment's production, and each team produces complete garments from start to finish.

Some of the fastest teams in the factory complete a finished garment every six seconds, according to Bailey.

The sewing floor at American Apparel's factory is overwhelming, frenetic, and ruthlessly efficient. Everywhere you turn, teams are bent at their machines keeping an astonishing pace. Some workers wear headphones, and many wear scraps of cloth over their noses to protect their breathing. Near the center of each group, usually posted high on a beam, is a clearly visible dry erase board filled with numbers.

The numbers on the boards represent how many garments the team produces each hour, how many garments the team aims to produce each hour, and the equivalent in hourly wages earned by each team member throughout the day. At the beginning of each day, team members decide on hourly production and wage goals in order to measure whether they have met, exceeded or fallen short of their expectations throughout the day

If, for example, a team hopes to produce 15 garments in its first hour of work and produces only 12, the team is not penalized, but will often strive to exceed its goal for the following hour in order to meet its goal wage for the day.

Workers are initially grouped into teams according to their speed; fast workers in fast teams, etc. From then on, workers are expected to improve within their team and as a team. Supervisors first identify the weakest link in the production chain, which is usually an unnecessary movement or movements being made by a particular worker in the process. The individual is then trained to eliminate said movement, benefiting the entire team. "I have teams that have been together for five years," Bailey said to an interviewer. "They wouldn't let me separate them if I tried."

In addition, the teams' dry erase boards and tallies are placed in clear sight of other teams, mainly to encourage inter-team competition. According to some workers I spoke with, this has led to tension among workers and between teams.

Workers and observers critical of the modular system told of fights breaking out on the sewing floor, teams pressuring their members to skip bathroom and water breaks to meet goals, and a highly pressurized work environment. Even a member of American Apparel's management candidly admitted that the company's work environment tests the boundaries of 'sweatshop free.'

"People are certainly being compensated fairly for their work [at American Apparel], but who's to say what a 'sweatshop' really is anyway. ... You go out on the factory floor and our workers are working hard, ... probably harder and faster than in some so called sweatshops," she said.

Kimi Lee of the Garment Worker's Center in LA told me of workers who have left American Apparel because of its "inhumane speed." As a result, the Garment Worker's Center neither supports nor boycotts the company, and stopped accepting donations from Charney. "We don't recommend workers there anymore, but we also don't dissuade them from working there. We tell them it pays well, and what kind of job it can be, and they make the decision."
According to Martin Bailey and the modular system's supporters however, the sweat is the point. "The modular system turns each team into a kind of business within the business," Bailey told reporters. "It puts the workers in control of their own wages and lets them set their own goals."

And the workers of American Apparel are setting, and reaching, impressive goals. As of this writing, some of the factory's experienced garment sewers earn as much as $18 an hour. The average employee on the sewing floor earns over $12.50 an hour, more than double the U.S. federal minimum wage. The company maintains a base pay of $8 an hour for some non-sewing positions, and claims to be steadily raising its lowest tier wage as the company expands. Simultaneously, workers are powering a company that has managed to compete with cheap offshore labor while competitors fold and disappear overseas; American Apparel and the workers within it are thriving.

In collaboration with the Los Angeles Unified School District, American Apparel offers free English classes to workers, and has begun building a library within the factory for workers.

The company employs five certified massage therapists who work exclusively with factory workers, free of charge, and has hired an occupational health and wellness specialist who is available to council workers.

The company offers free parking in front of the facility and subsidized bus passes for workers, in addition to a bicycle lending program for workers who can ride to work. Bicycles are repaired free of charge, receive monthly maintenance, and are available to any worker upon request, along with a lock and helmet.

During work hours, employees may go to the bathroom any time and can receive brief cell phone calls or use company telephones, free of charge, for quick personal calls. The company also offers a number of computers in and around the lunchroom, which provide free internet access to workers.

American Apparel offers employees paid days off, and has devised a system based on the number of years an employee has worked, making workers eligible for between 5-15 paid personal days off per year.

The company offers on-site check cashing when workers are paid on friday, and is currently collaborating with Wells Fargo to provide each worker with a bank card and/or free checking account. According to the company's website, most garment workers in LA use check-cashing companies to deposit their paychecks, costing each worker 1 percent to 2 percent of their paycheck. The company estimates that American Apparel employees collectively spend more than $150,000 annually on check cashing. American Apparel and Wells Fargo's free checking account program would counter this trend, and additionally provide workers with Visa Check/ATM cards, significant because they allow workers to send and spend money abroad. While American Express and Western Union often charge exorbitant fees for simple transfers in Mexico or Central America, giving workers Visa cards allows them to save on both check cashing and wire transfer costs.
Vice President Martin Bailey told reporters that, he has personally issued interest-free loans from the company to workers in personal emergencies, and the company subsidizes and has provided free lunch for workers who are in need. The company also fields a recreational soccer team, and has offered Yoga classes in the past.

Reporters spoke with Roian Atwood, American Apparel's Coordinator of Community Relations, Organic and Environmental Programs, about the future of the company's employee benefits. He talked of plans to build a daycare, or perhaps even a middle school, on or near the factory site, and said all of these ideas and more were under active investigation by the company for feasibility.

"We want to do all of these things ... and it comes down to do we have the money," Cynthia Semon told an interviewer. "Even if you have a union telling you what benefits you have to give your workers, if you can't afford it then you can't afford it." Therefore, Cynthia maintained, as the company's profit margin expands, so will worker benefits. So far, the company's actions support this claim.

Remaining Criticisms of Worker's Rights

At post-union drive American Apparel, some outstanding criticisms remain.

Workers have been complaining of favoritism within the company for years, dating back to the UNITE drive. Steve Wishart of UNITE and Kimi Lee of the Garment Worker's Center both cited favoritism as a major problem at American Apparel, and Kristina Moreno of the company's Human Resources Department recognized the issue as well.

"At any given time I have a hundred workers telling me I need to get their cousin and their uncle a job," Charney said in one conversation.

In response to this problem, the company claims to have created a list of names for future hiring. New workers are reportedly hired from the list in the order they are listed, and no name is allowed to advance up the list faster than others.

In a lawsuit filed in 2005 against American Apparel, former employee Mary Nelson claims the company violated wage and hour laws by designating and treating her as an "independent contractor."
"American Apparel gave Ms. Nelson an office, supervisor and assistant," Keith Fink said (Legal Counsel for Mary Nelson). "They gave her health insurance, and gave her a cell phone ... [They] gave her job tasks, put her on employee rosters, and had her fill out employee expense reimbursement forms."
Still, Fink claims, American Apparel designated Ms. Nelson and employees like her as "independent contractors" in order to cheat these employees of benefits and the government of taxes. Fink also claims that since the filing of Ms. Nelson's lawsuit the company has changed many independent contractors' status to that of employees.

American Apparel claims it is standard fashion industry practice to treat salespeople as independent contractors, and that no laws are broken in doing so.

Concern about American Apparel's treatment of employees also surfaced in 2005 following the leak of a letter of resignation from the "longest standing [American Apparel] retail employee in Canada," addressed to Charney and much of the company's upper management. In her March 2005 letter, obtained by The Consumerist blog, then-manager Laurelle Miciak complained of "discrepancies regarding [American Apparel]'s treatment of employees," and a "disorganization of its stock and product situation-which is as random as the company's absent (but much needed) human resources department."

The letter reads, in part:

Drastic changes in all facets of management are not "progressive" or "youth driven" or cutting edge: they are a cause for concern and stress for all employees who have to deal with it. Working under a non-system which is missing structure is not only unproductive and inefficient-its fucking anarchy. Not to say that there isn't a pecking order, though: there are plenty of girls in this company who are being compensated for whatever it is that they do well, whenever it is that they do it, I guess... The amount of people who have been promoted then demoted/fired/forced to quit because they were prematurely moved up or wrongfully chosen is simply astonishing. Perhaps this is part of AA's 'Socialist-Capitalist' fusion. Because Socialism suits the company just fine, until a personnel issue arises. ...

I was recently told that perhaps in 2-3 years, when the company has "stabilized", that I could probably be compensated for my time properly. That maybe, by that time, working between 60-80 hours a week would mean making more money than just enough to cover my rent and the bills that I have to pay. In short, I was told that I was lucky to have what I do with American Apparel right now. That running a store (small warehouses, really), managing and disciplining an entire staff, and everything in between is essentially a priviledge granted, not a position that has been earned. How's that for motivation? Trial periods vary between 2 weeks to 6 months, based loosely upon how much time they want you to spend "proving yourself" before they have to pay you at a higher rate. ...

The amount of dedication that this company expects from anybody in a management position is hugely disproportionate to the amount of money that they are forced to accept.

And then there are the complaints about senior management. The things that I know to have taken place that are lacking basic and proper professionalism are enough to embarrass and stun me into silence. They come from far and wide, tales of being granted "monetary encouragement" to leave peacefully, ie: paid off to shut up and quit. So often, whenever a retail employee has tried to take a stand for what they were promised, granted, or approved for, their pleas fall upon deaf ears.

....You can peg me right now as dramatic or disgruntled, but since working for American Apparel for the past year and a half, my 'salary' parallels that of a novice telemarketer. Getting a raise from this company is like trying to draw blood from a stone. (Except for the favorite(s)/flavour of the month, who are special. Seniority doesn't take you very far with AA.)

American Apparel prides itself on being a pioneering company. No doubt that I supported many of its initial ideas that built the foundation of its business model. But the company that looked so good on paper no longer corresponds with itself . The stores have lost concept and look like flea markets, your products have lost quality, and your business ethics are being erased and replaced with the usual corporate shtick- in short, you are well on your way to becoming another institution, and your outrageous company has become horribly predictable. In addition to this, the exploitations of the cultures, sexual orientations, and individuality of the people featured in your advertisements only serves to show that you really don't understand what is relevant and edgy today within youth culture; your target market. You've effectively moved the exploitation of workers in your "non-sweatshops" to your own retail workers and models featured on the pages of newspapers and magazines, cashing in on what you assume a generic public will perceive as subversive and political."

Ms. Miciak goes on to describe employees being given Blackberry phones instead of pay, and alludes to the company questionably "laying off" garment workers during the previous week.

Charney expressed interest in commenting on Ms. Miciak's letter, but was unable to be reached by press time. American Apparel's press agent, Cynthia Semon, declined to comment extensively on the letter citing a lack of personal experience with the matter. "From what I understand, Laurel regretted writing the letter and was unhappy that it got circulated," Ms. Semon said. "She and Dov are friends now and they speak. She was upset at the time and chose to blow off some steam, unfortunately in a very public way."

Charges of sexual harassment at American Apparel remain unsettled, and continue to be an obvious concern for both employeess and consumers.

As mentioned in the previous section, American Apparel's modular system remains a point of contention for many workers. The speed it causes workers to keep and the tension sometimes created between teams and fellow employees represent the system's shortcomings in the eyes of its critics.

It is, however, unlikely that the company will alter or abandon the manufacturing system that has brought it so much success, and better training for supervisors and workers may remedy these problems in part.

When reporters interviewed, Kristina Moreno, American Apparel's Human Resources Department was just about to publish the company's first ever employee manual. The manual, and in some ways Moreno's entire department, have been established in an attempt to institute procedure where once there was a loose system of "understanding." It appears that for years, and especially for the years Charney was present in the factory, American Apparel was run more like an idealist summer camp than a multi-million dollar corporation.

Veteran workers at the factory spoke of a time when no one brought lunch to the factory on Fridays, and Charney paid workers to cook a free lunch each week. Employees came to work one Halloween and found Charney in costume and the lunchroom decorated; Charney lived at work and treated his workers like family.

It was during this time that Charney went so far as to initiate the legal immigration process on behalf of several workers, spending thousands of company dollars and numerous years since to help a small group of American Apparel workers obtain green cards. As of this writing the company is still spending money and time to meet Charney's original promise to these employees.

The company also maintained an open door policy during this time, with workers feeling free to walk into the office of Charney or upper management at any time and voice complaints. Charney's LA home is in the same neighborhood as many of his workers, and employees reportedly felt free to visit him there during off hours to talk.

Which raises perhaps the most crucial question facing American Apparel today: having undergone explosive growth in the past four years and quadrupled its workforce, can American Apparel make the transition from a casual, "family" atmosphere to that of a larger institution, while retaining the values and spirit of Charney towards its workforce? Charney already spends much of his time outside the factory, working to open new retail stores. What if Charney were to die suddenly, or be bought out of his company? What would ensure that his non-unionized company would retain its original vision?

This question, and the question of worker's ability to collectively bargain with management at American Apparel, remain in doubt.

From Charney's perspective, both questions are answered by the "vertically integrated" manufacturing system the company employs. Vertical integration means that every step of the garment production process occurs in the company's single LA factory; from knitting and dyeing to cutting and sewing. By comparison, almost none of the retailers or manufacturers in the U.S. garment industry currently produce, at their own factories, any of the garments they sell. Many industries instead use a sub-contracting system to keep their workforces "fragmented and flexible," according to the Center for Economic and Social Rights "Treated Like Slaves" report.

By vertically integrating his factory, Charney argues, he has given American Apparel's workers the power to completely halt his operation at any time, should they choose to.

According to the "Treated Like Slaves" report, in the sub-contracting system "workers are separated from the retailers, who are the smallest in number but exercise the most control in the industry, through several layers of sub-contractors, contractors and manufacturers ... because numerous sub-contractors may be involved in the production of even one apparel item, monitoring conditions and establishing visible links between retailers and manufacturers is difficult." The report concludes:

"The embodiment of this system is the current day sweatshop – workplaces characterized by extreme exploitation, poor working conditions, absence of a living wage or benefits, extremely long hours, intense pace of work imposed through constant supervision and the piece rate system, violation of labor laws, and arbitrary discipline. The sub-contracting system has exacerbated and spread sweatshops conditions in the U.S., especially in industries such as apparel manufacturing in New York City (NYC) and Los Angeles."

In his book Solidarity for Sale NYU Labor Historian Robert Fitch cites American Apparel as a "sign of change" for garment workers, and notes that the company's elimination of subcontracting was once a demand of the early ILGWU.

But Charney's compassion is aligned with his bottom line; vertical integration is also the company's strategy to maintain a competitive edge in the fickle fashion industry.

"There's a high cost to going offshore," Charney told 20/20 on July 31. "If you're working with a supplier in China you've got to work months in advance. ... If you're working with your own factory you can wake up and say 'let's make 10,000 tank tops today.' ... We can go to a vintage store, snap a picture of a garment that we think is hot and ... 20 or 30 days later we can have it in stores."

- Giancarlo D'Andrade
LAN

I'll post the second part of my look into American Apparel at a later date