A former employee of American Apparel has accused CEO Dov Charney of pressuring him to manipulate the accounting for the clothing retailer and then firing him when he refused.
Roberto Hernandez filed a wrongful termination suit against Charney and the company, claiming he refused to "pad the inventory" figures in 2006 so the company would pass an audit when it was seeking outside investment.
American Apparel was denied the investment by the outside firm, LaSalle, which is now owned by the Bank of America, according to The Wall Street Journal, but later received capital through a "blank-check" initial public offering.
Hernandez, who worked for the company's information technology department, claimed that the CEO also talked with staff members while he was in the shower, "paraded in the workplace in his underwear," and conducted meetings at home while in the nude. Charney has also been accused by a female employee in a separate sexual harassment lawsuit that he settled for $1.3 million. The same attorney, Keith Fink, represented Hernandez and the female employee.
American Apparel denied Hernandez's accusations. "The allegations in this lawsuit are fictional, which the company believes represents a cynical attempt to extract phony leverage by Mr. Hernandez's counsel, Keith Fink, who has been engaged with the company in other litigation over three years," the company said in a statement. "The facts are that Mr. Charney had no personal management responsibility nor influence over the work of Mr. Hernandez and played no role in his termination in 2006."
The company also denied that Hernandez was an accounting employee, but Hernandez said in his suit that he worked on both information technology and accounts payable.
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