American Apparel, Inc.’s Board of Directors voted to replace its founder and CEO and terminate his employment “for cause,” the company said in a statement Wednesday evening.
“We take no joy in this, but the Board felt it was the right thing to do,” board member Allan Mayer said in the statement. “Dov Charney 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.”
The statement said the decision stemmed from an ongoing investigation into allegations of misconduct.
Charney, 45, founded the popular clothing brand in 1997. While he’s being suspended immediately, his employment contract requires 30 days before he can be terminated, the statement said.
“He was totally taken by surprise, which is part of the problem,” a source familiar with the matter told the Chicago Tribune. “He’s going to fight like hell to get this company back, but he won’t succeed.”
Although the company did not expand upon the alleged misconduct, the Tribune detailed some of the accusations Charney had faced in the past:
In 2011, American Apparel lashed out when four female former employees filed a sexual harassment suit. At the time, the company told The Times that the four women were friends who were colluding to “shake down” Charney and the company for money and that it had “voluminous evidence” to prove that the allegations were false.
In 2012, Charney was accused in a wrongful termination suit of choking and rubbing dirt in the face of a former store manager in Malibu. Charney also allegedly called the employee “a wannabe Jew,” a “fag” and asked if he was sleeping with a certain girl. The company denied the allegations.
“The Board is working with a search firm to identify candidates for the job of permanent CEO and, based on our initial discussions with the search firm, we expect the list of possible successors will be impressive,” David Danziger, who has chaired the Board’s Audit Committee since 2011, said in the statement.
For the time being, John Luttrell has been appointed as the company’s interim CEO.
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