By Josh MankiewiczCorrespondentNBC Newsupdated 8:39 p.m. ET, Fri., July 28, 2006This report aired Dateline Friday, July 28
Every work day in America, millions of employees spend many of their waking hours with all kinds of bosses. But how many can say they work for a guy like who runs around the office in his underwear? For a CEO who let videotape of himself doing just that go up on the company Web site?
Dov Charney, American Ampparel CEO (on deposition video): There is no evidence to say that you can’t walk around in your underwear all day anywhere in the United States of America.
Meet Dov Charney, the 37-year-old founder and CEO of American Apparel
, the ultra-hip chain that sells clothing, and yes, underwear.
Story continues below ↓advertisement | your ad hereHe’s giving a deposition, on tape and under oath, in a sexual harassment lawsuit.
Charney (in deposition tape): I frequently drop my pants to show people my new product
Keith Fink, attorney for Mary Nelson: Do you know Mary Nelson?
Charney: Yes.
Mary Nelson is one of three women who filed sexual harassment lawsuits against Charney last year. Keith Fink is often on the other side of this debate, hired by companies trying to ward off harassment litigation.
Josh Mankiewicz, Dateline correspondent: You do workshops for employers telling them how to avoid sexual harassment cases.
Keith Fink, attorney for Mary Nelson: Quite often. I’m a pretty entertaining guy.
Mankiewicz: And you give out a bunch of guidelines for people to sort of live by if they wanna stay out of a courtroom.
Fink: Absolutely.
Mankiewicz: How many of those guidelines were broken at American Apparel?
Fink: Every single one of them.
First, you need to understand what a striking success the company has been. Since Dov Charney opened American Apparel’s first retail store in 2003, revenue has quadrupled to $250 million annually.
Dov Charney: This is basically the pitch: It’s T-shirts
that look good, T-shirts that feel good, and T-shirts that are made in a non-exploitative setting.
The clothes are made not in overseas sweatshops, but in an air-conditioned factory in Los Angeles, where employees earn well above minimum wage
and receive full health benefits.
Charney is proud to use a healthy dose of sexuality to market his company’s products. This is an example of one of the images posted in Charney’s stores and on the company’s hugely popular Website. But some former employees say at American Apparel, sex is more than just a marketing tool.
Mankiewciz: Mr. Charny’s been pretty open about the fact that he’s been involved personally with a number of his employees.
Fink: Open. Brazen. Yes.
Charney has talked to reporters from the New York Times, Business Week and Jane magazine about his intimate relationships with women who work for him. “I’m not saying I want to screw all the girls at work,” he was quoted as saying in Jane, “But if I fall in love at work it’s going to be beautiful and sexual.”
By all accounts, the women who have sued Dov Charney for sexual harassment—including Fink’s client Mary Nelson—were not intimately involved with him. But Nelson and the two others claimed the boss shocked and disgusted them with dirty talk and gestures, creating what some lawyers call a phrase you’ve heard before, “a hostile work environment.”
Mary Nelson started working as a wholesale salesperson at American Apparel in 2003 when she was 31. Over the next year and a half, she claims in her complaint, her boss made her work life miserable with unwelcome sexual comments and suggestive signals. And she says she was dismissed after she complained.
In the videotaped deposition, over several days, her lawyer grilled Charney about all of it.
Fink (deposition): Did you ever, at work, refer to women as “sluts”?
Charney: In private conversations, where such language was generally welcome.
Fink: Do you view "slut" to be a derogatory term?
Charney: You know, there are some of us that love sluts. You know, it’s not necessarily—it could be also be an endearing term.
Fink: An endearing term. Is that something you call your mother?
Charney: No. But it’s maybe something that you call your lover.
Fink (Dateline interview): I’m very difficult to floor me. That floored me when I heard his explanation that “slut” is an endearing term.
Charney freely admits using a number of explicit terms for female body parts—including the “C” word.
Charney: During the period when she worked, did I use the word c***?
Fink: In the workplace?
Charney: Absolutely, as she did.
Fink: I didn’t ask you if she did.
Charney: I’m telling you a little more. I’m volunteering a little more ha ha [sticks out tongue].
The company argues in the freewheeling creative environment of American Apparel, it’s not inappropriate to use foul language.
And in fact, a recent court decision might back that up: this spring the California Supreme Court ruled that an assistant scriptwriter on the NBC sitcom "Friends" could not proceed with a sexual harassment lawsuit. The court ruled that lewd language was permissible in a creative workplace generating scripts with sexual themes.
Charney hangs explicit vintage magazines
on the walls of his retail stores. He even posed for one ad himself in the magazine “Sweet Action.” To Charney, it’s all part of an unconventional vibe he says is the very essence of his hip young company.
Charney: I believe that we work hard to create an environment of freedom.
And in the world of Dov Charney, freedom can sometimes mean dressing down at the office.
Fink: At the workplace in the years 2003 and 2004 how often in the work week would you be in your underwear?
Charney: There were months I was in my underwear all the time. It became very common.
Dov Charney argues sometimes taking off his pants at the workplace is perfectly appropriate. He is, after all, in the business of selling underwear. He serves as a fit model for the company so he says he has to try it on at work. And he says he wants to build enthusiasm for the product.
Charney: There was a time in fact we put it on the Internet that I was running around in my underwear.
Fink: Why did you do that?
Charney: To be humorous.
Fink: And did all the employees tell you that they thought it was funny seeing the CEO walk up and down the workplace in his underpants?
Charney: We had people cheering.
The video of a pant-less Charney on the job has been removed from the company’s Website. But it turns out someone saved a copy.
In the video, the workers on the floor don’t seem alarmed by their boss’s behavior. So what’s it really like to work for Dov Charney?
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