American Apparel has built a blockbuster worldwide clothing brand based on anonymity—no logos, no flashy advertising, no celebrity testimonials. If you can’t tell what kind of stretchy tees or skinny jeans the beautiful people of Paris or Prague are wearing, chances are they’re wearing the L.A.-based company’s products.
But according to one former employee, CEO Dov Charney wanted to make sure potential financial backers knew all about American Apparel, and that led the company to falsify sales and inventory numbers to make it a more attractive investment.
Roberto Hernandez, who used to work in American Apparel’s inventory and IT operation, claims he was fired for refusing to pad the company’s stats at Charney’s request. Now he’s filed suit against the company, alleging , breach of contract, infliction of emotional distress and other charges.
According to Hernandez’s complaint, Charney became “incensed” when one potential investment fell through. He alleges that’s when Charney decided to cook the books. The lawsuit claims Hernandez was fired shortly after refusing to go along with the scheme.
American Apparel claims it fired Hernandez for legitimate reasons.
Final note: Whistle-blower lawsuits are growing, aided in part by the public’s apparent disgust with what many view as corrupt and greedy business interests.
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