A woman whom American Apparel says was given a severance package by former CEO Dov Charney in exchange for her dropping misconduct claims against him is suing the company for non-payment of benefits under her severance agreement.
Former American Apparel chief of staff Tina Pellegrino alleges she is owed more than $50,000 under the severance package she signed in January 2014, of which $30,000 is allegedly unpaid healthcare expenses.
Pellegrino’s severance package included a payment of $250,000, at $5,000 a week for 50 weeks, a copy of the document attached of her legal complaint says.
Pellegrino was American Apparel’s chief of staff from 1998 to 2014, according to her LinkedIn profile. She “set up the Private Label Department and secured contracts with major street and surf wear companies” during her time there, her profile states.
The lawsuit is interesting because Pellegrino was named as one of the women whom Charney paid off in order to avoid a lawsuit when she left the company, according to a copy of the severance letter the board of directors gave to Charney in mid-2014. That note stated:
We also recently learned that you presented significant severance packages to numerous former employees (including packages to Tina Pellegrino, Shannon Nadj and Josephine Delapaz) to ensure that your misconduct vis-a-vis these employees would not subject you to personal liability. None of these severance packages were discussed with or approved by the Board of Directors. These severance packages were material expenditures of Company funds that were not in the best interests of the Company and instead were to protect you from personal liability for misconduct.
Charney has denied the board’s allegation regarding the severances, and has sued the company for defamation.
Neither the company, Charney nor Pellegrino responded immediately to requests for comment. Business Insider will update this post when we hear back from them.
Pellegrino initially tried to file the suit under seal — an indication that she is not seeking publicity — but a judge denied her request and the claim was made public today.
Charney, in several lawsuits against his former company, claims he was wrongly forced out in a boardroom coup and then defrauded of his controlling stake in the company’s stock by a private equity group, Standard General, which he thought was defending his interests. The board and Standard General deny Charney’s claims.
Here is a highlight from Pellegrino’s severance package:
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