American Apparel lays off a quarter of its workers over immigration issues

Posted Sep 4th 2009 12:30PM by Zac Bissonnette
Filed under: Management, Employees

American Apparel Inc. (AMEX: APP) has always been unlike any other clothing company: a flamboyant CEO who received oral sex during a magazine interview and marketing logo- and image-free clothing that has become one of the hottest brands in the country.

And the weirdness continues. CEO Dov Charney has been a vocal proponent of immigration rights, and many of the workers at the company's Los Angeles factories were immigrants. Now 1,500 of the company's 5,600 factory workers are being fired because of documentation issues following a U.S. Immigration and Customs Enforcement investigation.

In a letter to employees, Charney wrote that he was "deeply saddened" by the news and promised to give laid-off workers priority when "you are able to get your immigration papers in order." American Apparel could also face fines of more than $800 per undocumented employees, according to The Wall Street Journal (subscription required).

At this point, you really do have to question whether Charney should be kept on his CEO of the company that he made into an icon. His commitment to his own pet issues has cost the company potentially millions of dollars in fines, legal fees, and hiring costs. That's fine to do when you own a private company -- it's your company! -- but it's fair to question whether Charney takes his fiduciary duty to shareholders seriously.

Could Charney provide all the value he undoubtedly does provide as chief creative officer/nonexecutive chairman of the board while bringing in an adult to handle the issues that are getting the company (and its shareholders) into a jam?

Tags: American Apparel, APP, Dov Charney, inthenews

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Reader Comments (Page 1 of 1)

9-04-2009 @ 11:25AM

xo said...

absolutely ridiculous that this article questions charney's role at american apparel. he is amongst the greatest ceo's of all time. he rules an empire and fights for extremely important causes. no need to belittle using such terms as 'pet issues' show a little respect.

9-04-2009 @ 2:39PM

Nancy said...

Thank God, someone has some BALLS

9-04-2009 @ 4:24PM

Iridium said...

The company makes overpriced garbage. And looky there he uses undocumented illegals as his labor source. The guy is a total wackjob.

A sweatshop in LA is the same thing as a sweatshop in Shanghai.

American Apparel is a joke and the only people who shop there are worthless hypocrites and Hollywood celebs that spout the holier than thou attitude of, "I buy made in America, I buy American Apparel because I care about helping this country".

Hopefully this joke of a company will go bankrupt soon.