American Apparel may attract a forward-thinking customer with its made-in-America image. But the retailer has certainly accrued its fair share of scandals along the way.
Just this week, a judge allowed a lawsuit to proceed alleging the company lied to investors about its financial performance back in 2009, one year before American Apparel's financial troubles went public, Law360 reports.
Today the company is on much stabler financial footing. But in the past decade alone, the company has dealt with scandals including alleged sexual harassment, the supposed sexualization of young models and workplace complaints.
American Apparel spokesperson Peter Schey, who did not immediately respond to comment regarding the investor lawsuit, says all the incidents have only strengthened the company and improved the lives of its roughly 10,000 employees. The company now has worker policies that go above and beyond what the law requires.
"It's not like mistakes have been made and we've ignored them and made things even worse, it is a situation where we've tried to learn from those mistakes," Schey told HuffPost in an interview. "Every mistake is an opportunity to learn how to do things better from the standpoint of the workers."
Here are 10 scandals that totally rocked American Apparel:
Its CEO Has Been Repeatedly Accused Of Sexual Harassment
American Apparel CEO Dov Charney has <a href="http://www.huffingtonpost.com/2012/03/22/irene-morales-dov-charney_n_1373424.html" target="_blank">faced multiple accusations of unwanted sexual conduct</a>, 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 href="http://www.huffingtonpost.com/2012/04/11/dov-charney-interview-american-apparel_n_1419086.html" target="_blank">"a testimony to my success."</a>
It Was Sued For Allegedly Firing A Cancer Patient
American Apparel was sued in 2010 for allegedly <a href="http://losangeles.cbslocal.com/2010/10/05/american-apparel-sued-for-firing-worker-in-chemotherapy/" target="_blank">terminating an employee who was undergoing cancer treatment</a>, CBS Los Angeles reports. The company <a href="http://www.dailynews.com/ci_19579066" target="_blank">settled the lawsuit for $60,000 in 2011</a>, 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."
Its Employees Are Allegedly Hired And Fired Based On How Hot They Are
American Apparel hires workers only after taking a full-body photograph of them and has faced accusations that it only <a href="http://gawker.com/5559165/american-apparel-has-a-full-body-head-to-toe-hiring-policy?skyline=true&s=i" target="_blank">hires the best looking candidates</a>, Gawker reports. Likewise, CEO Dov Charney reportedly personally went through photos of store employees and requested that any <a href="http://gawker.com/5323472/we-predict-more-lawsuits-in-dov-charneys-future" target="_blank">"ugly people"</a> be let go, according to one store manager. For its part, American Apparel says its <a href="http://gawker.com/5329709/dov-charney-i-do-employ-uglies" target="_blank">policy is to hire workers who are knowledgable about its products</a>.
A Factory Worker Died On The Job
In 2011, garment worker <a href="http://www.huffingtonpost.com/2011/08/22/tuan-phan-american-apparel_n_933107.html" target="_blank">Tuan Phan was killed by a circular knitting machine at one of American Apparel's factories</a>. 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."
Its Been Accused Of Racism
American Apparel paid out over $300,000 in damages after a worker <a href="http://gawker.com/5037306/racist-hipsters-schooled-by-ex+american-apparel-employee" target="_blank">sued for being called "n****r"</a> by his superior repeatedly, Gawker reports. The company has also been <a href="http://thegrio.com/2010/06/15/american-apparel-doesnt-want-trashy-black-women/" target="_blank">accused of profiling customers</a>, <a href="http://www.businessinsider.com/the-10-most-racist-ads-of-the-modern-era-2012-6?op=1" target="_blank">running racist ads</a> and <a href="http://www.racialicious.com/2011/08/08/does-american-apparel%E2%80%99s-ching-chong-hat-offend-you/" target="_blank">making racially insensitive products</a>. "Under no circumstances does the company think racial slurs are appropriate," Peter Schey told HuffPost.
Its Ads Get Banned... A Lot
American Apparel's <a href="http://www.huffingtonpost.co.uk/2013/04/10/american-apparel-adverts-banned-sexual-objectifying-images-half-naked-models_n_3050235.html#slide=2320826" target="_blank">racy ads</a> have been banned <a href="http://www.huffingtonpost.com/2012/04/04/american-apparel-ads-banned_n_1403006.html" target="_blank">repeatedly for showing nudity</a>, supposedly <a href="http://www.guardian.co.uk/media/2009/sep/02/asa-american-apparel-ad?INTCMP=SRCH" target="_blank">being exploitative</a> and <a href="http://www.huffingtonpost.com/2012/12/05/american-apparel-sexy-ads-asa-child-models_n_2243360.html#slide=1805880" target="_blank">sexualizing child models</a>.
It Almost Went Bankrupt
American Apparel has been flirting with bankruptcy since 2010, coming especially close in the <a href="http://www.huffingtonpost.com/2011/04/04/american-apparel-bankruptcy_n_844713.html" target="_blank">spring of 2011 after losing around $86 million</a>. 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 <a href="http://www.huffingtonpost.com/2012/03/12/american-apparel-gets-80-million-george-soros-firm-woes_n_1339409.html" target="_blank">$80 million credit infusion from billionaire George Soros</a> in 2012, however, appears to have put the clothing company on more solid financial footing.
Its CEO Allegedly Throws Dirt At People
A 2012 lawsuit brought by former employee Michael Bumblis accused CEO Dov Charney of throwing dirt at a store manager and calling him a <a href="http://www.huffingtonpost.com/2012/12/03/american-apparel-lawsuit-dov-charney_n_2232080.html" target="_blank">"fag" and a "wanna be Jew,"</a> The Huffington Post reports. "Dov Charney and witnesses deny that Charney ever assaulted or rubbed dirt in Mr. Bumblis's face," spokesman Peter Schey told HuffPost. "Mr. Bumblis sued only after being terminated for cause (after numerous warnings about his conduct before and after the alleged dirt-throwing incident)."
It Apparently Can't Take A Joke
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. <a href="http://www.huffingtonpost.com/2011/09/14/nancy-upton-wins-american_n_962472.html#s352748" target="_blank">Nancy Upton's collection of ironic photos</a> 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.
It Unknowingly Hired Unauthorized Workers
American Apparel was <a href="http://www.nytimes.com/2009/09/30/us/30factory.html?pagewanted=all" target="_blank">forced to fire 1,800 employees</a> 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.