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Is it a sign that you’re in a toxic working environment if your boss is walking around in his underwear? Or in nothing at all?
Worth firing off a quick email to HR? Yeah, probably.
Should alarm bells sound if some of the staff are living at his house? And is regularly picking a “Fool of The Week” a recommended motivational tactic?
All of these things supposedly happened at American Apparel, according to the latest episode of Netflix’s documentary series Trainwreck.
Toxic Workplace or Cult?
What started off as a well-intentioned business focused on ending sweatshop culture within the fashion industry, paying above minimum wage to its factory workers, and lead by a hyper-active, visionary leader called Dov Charney, ended with a series of yep, you guessed it, sexual misconduct allegations against him and well, a Netflix documentary with people recounting how unbelievably mad the whole experience was.
Oh, and Chapter 11 bankruptcy and eventual acquisition.
Although the phrase “disruptor” wasn’t at play during the noughties, American Apparel was exactly that, seeking to move American fashion away from its dependence on Far-East factories and show that, despite the nay sayers, a business model based on domestic manufacturing (Ethically Made - Sweatshop Free), with fairly-paid workers, minimal branding and edgy marketing could not only survive but thrive.
And, he wasn’t wrong. The firm was a huge success and soon became a global retail brand with sales of more than $300m by 2006 and a listing on the US Stock Exchange.
But it was also described by those working there as more akin to a cult than a workplace.
Where was the HR department?
Dov Charney’s decisions, his whims, his outbursts, dictated everything. Workers speak of being hired with little or no process, sometimes based on their look or general “vibe”; fired spontaneously; shouted at and abused; made to work long unpaid hours and expected to be available at all times of the day or night.
"I loved every second of it," one employee said, "until I didn't."
In the documentary footage, he’s also seen speaking about sexual experiences with employees at the time and there is video of Charney walking around naked in front of two female employees.
Many workers were in relationships or otherwise involved with co-workers and sometimes more than one. The atmosphere was described as “horny”. This, of course, included the boss, who might have been the horniest of them all.
"It was definitely an open secret that Dov was sleeping with the employees," a former worker, said.
The documentary says that the sexual harassment and abuse cases that later emerged were dismissed in court due to confidentiality agreements that all employees had to sign upon joining. Most did so without any consideration of the consequences. And certainly not in the presence of the HR department. And it was those agreements that prevented the many later complaints made against Charney being taken any further.
Could anything have saved American Apparel?
The American Apparel board eventually launched an investigation into Charney’s behaviour and first suspended him for ‘alleged misconduct and violations of company policy’, before subsequently firing him in 2014.
In a recent statement to Entertainment Weekly regarding the documentary, a spokesperson for Charney said: “Charney has never been found liable for any misconduct - sexual harassment or otherwise - by any judge, jury, arbitrator, or independent investigation.”
It went on: “Unfortunately, the Netflix documentary grossly misrepresents the story of American Apparel and Charney, relying on paid actors to emotionally restate long-disproven allegations.
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“No credible insiders - including Charney himself - participated in the production. One can only hope the full, unvarnished story of American Apparel and the forces behind its downfall will one day be told.”
Feels like now would be exactly the time to set the record straight, if indeed anything needs setting straight.
The American Apparel story is a classic cult of personality tale. Charney set out to rewrite the rules about what an American clothing manufacturer could be, but in doing so got rid of many of the non-negotiables that every workplace should have.
Consequently, he built a house of cards with employees too inexperienced or completely unqualified to question his methods (for many it was their first job) or what should be regarded as normal in the workplace.
It did create a point of difference between the company and other employers in the space, however, making it a destination for many young people who loved its edgy reputation and perhaps the fact that many of its employees ending up starring in its marketing campaigns.
Culture in practice
It raises an interesting question about creating a company culture. Not a made-up collection of mission statements or bland tickboxing, but a culture that emerges when you do things differently, act without fear and disregard the norms.
Whilst the whole thing did eventually come off the rails, there’s no question that while the company was rising rapidly, the fast and loose ethos of the firm was attracting bright, ambitious, young people across the world and giving opportunities to some who might otherwise not have been given them. An early version of skills-based hiring perhaps? Although, some weren’t even required to present much evidence of any skills.
“They definitely were hiring freaks and geeks, you know. It felt like the weirdo club,” former district merchandising director Jonny said in the documentary. One of the slogans in the stores, according to him was “if you see someone shoplifting let ‘em know we’re hiring.”
A functioning HR department, with more process and input would have resulted in a very different company with a different set of employees, perhaps a different management structure and, of course, maybe a different growth trajectory.
Chances are that without its vibes-based culture it would not have been as successful, given that said vibes are an important and indefinable part of fashion.
But it would have been a safer place to work, no-one would have been abused and we wouldn’t have to see Charney mincing around in his tighty whities.
What happened to American Apparel?
The American Apparel board eventually launched an investigation into Charney’s behaviour and first suspended him for ‘alleged misconduct and violations of company policy’, before subsequently firing him in 2014.
As fashions changed, however, American Apparel fell out of favour and filed for bankruptcy in 2015 and 2016.
It was bought in 2017 by Canadian sportswear manufacturer Gildan Activewear. The new owners closed all 281 stores and relaunched it as an online-only brand. The AA website now claims the firm is “committed to leading ethical and sustainable practices”.
Sounds like it finally has an HR department.
