In July American Apparel CEO Dov Charney was booted by his board of directors. In a federal filing, he described it as “termination … without merit.”

And this week he was booted again. Turns out the first time around the controversial L.A. T-shirt mogul was only suspended as the firm investigated “alleged misconduct and violations of company policy,” according to a statement.

Apparently it found enough alleged evidence to terminate Charney and to sever his ongoing work as a consultant to the company he founded.


What did he do? American Apparel is not saying.

But Charney has long been the focus of sexual-harassment allegations, usually involving some of the many attractive young women who work at American Apparel's 249 stores while modeling for its provocative print ads, sometimes photographed by Charney himself.

One of the more recent cases involved 17-year-old Irene Morales, who claimed she was “held prisoner” as a sex slave by Charney after she turned 18. Her New York suit was thrown out of court, and Charney has long denied such allegations.

Then nude photos of Morales were leaked, leading to some speculation that this was some kind of payback for her suit and that the leak led to American Apparel's investigation of its CEO.

How can a guy be booted from his own company? American Apparel is publicly traded and thus run by a board of directors, who serve as the CEO's boss.

A statement from downtown L.A.-based American Apparel explained what happened this week:

Credit: American Apparel

Credit: American Apparel

Mr. Charney was suspended as president and CEO by the Board on June 18 for alleged misconduct and violations of company policy. Under terms of an agreement signed by Mr. Charney on July 9, a special committee of the Board oversaw an internal investigation conducted by FTI Consulting into the allegations against Mr. Charney. Based on this investigation, the special committee determined that it would not be appropriate for Mr. Charney to be reinstated as CEO or an officer or employee of the Company. While under suspension as CEO, Mr. Charney had been serving as a consultant to the Company. This relationship has now been terminated.

The company says Paula Schneider, formerly of BCBG Max Azria and Laundry by Shelli Segal, has been installed as the new CEO.

Allan Mayer, co-chairman of the board, said:

We're pleased that what we set out to do last spring—namely, to ensure that American Apparel had the right leadership—has been accomplished.

Don't expect Charney to walk quietly away from the company he started out of his Tufts University dorm room in 1989.

The first time he was booted from American Apparel, in July, he reacted by saying that he “intends to contest it vigorously.”

Believe that.

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