Buzzfeed recently obtained the termination letter of American Apparel founder and Chief Executive Officer Dov Charney, whom reports said has been dismissed by the company board for breaching his fiduciary duty, violating company policy and misusing corporate assets. Earlier on, Charney's surprise firing from the company on Wednesday was supposedly due to his alleged misconduct in the company. The company board members are professionally vouched for by Charney.
On the other hand, a source told the viral news site, who had passed the letter after initially posting grievances against the American Apparel board on anonymous social network Whisper, claimed that Charney's termination was not an abrupt move everyone outside the company thought to believe, and that Charney himself is aware of the move.
In the letter the board wrote, it mentioned Charney's purported sexual misconduct in the company, and said, "In terms of finances, your conduct has required the company to incur significant and unwarranted expenses, including expenses associated with litigation and defense costs, significant settlement payments, substantial severance packages that were granted to employees, and unwarranted business expenses that you incurred for personal reasons."
Among the accusations he is accused of are employee sexual harrasdment and his refusal to participate in mandatory training designed to curb sexual harassment in the workplace, significant payments to employees to conceal wrongdoing, his inaction of an underling who have been managing blog posts about former employees that contain false and defamatory claims, and authorization of salary increases to employees to convince them to not seek personal claims against him for wrongdoing.
The board also claimed in the letter that the company's employment practices liability insurance retention program has grown from $350,000 to a million dollars, which is well above industry standards. Moreover, the American Apparel board said that it has been having a difficult time securing debt financing and raising capital due to his misconduct.
Buzzfeed said that Charney will be pursuing legal action to fight the decision.
