Is Dov Charney America's most extreme boss?

03 June 2015 -

We chart the rise and fall of the American Apparel retail guru, amid his continued legal battles with the company he created

Jermaine Haughton

American Apparel founder Dov Charney’s dramatic decline as a retail industry leader has continued this week, with reports that the firm he created has slapped him with a restraining order.

As issued by a Delaware court and recorded in an American Apparel notice to regulators, “Mr Charney is temporarily restrained from directly or indirectly seeking the removal of any member of the company’s board of directors, including by instigating, encouraging, acting in concert with or assisting any third party in seeking to do so.”

Charney has also been barred from breaching the terms of a previous “standstill” agreement that withholds him from verbally attacking the company and its board in the media.

It is just the latest development in the extraordinary tale of his journey from celebrated fashion guru with his finger firmly on the pulse to ousted leader embroiled in litigation.

Charney established the American Apparel brand in 1998, initially selling T-shirts. The Canadian was noted for a hands-on approach to management and leadership, leaving his mark on every part of the business from manufacturing to marketing and sales. After building the company into a multi-million dollar brand, Charney was named Retailer of the Year in the 2008 Michael Awards and – perhaps more significantly – nominated as a Time 100 finalist just a year later.

However, Charney faced a number of scandals and legal problems during his tenure – including the violation of sexual harassment and anti-discrimination policies and the misuse of company funds – and was fired by the American Apparel board last December, sparking an intense legal battle between the parties. Represented by lawyer Keith Fink, the Canadian filed a lawsuit against the brand he created, including two counts of defamation and claiming damages of up to $1 million in lost wages. Charney has also backed a lawsuit by 200 former workers at the retailer who claim they were improperly dismissed.

American Apparel has denied the claims as merely an attempt by the ousted founder to regain control of the firm. The acrimony came to a head last month when the brand countersued, citing a “scorched earth campaign” that Charney had allegedly waged in his legal filings and proposing an agreement for the rules of his departure.

This could run for quite a while yet.

Pressure cooker

Four other big-name bosses who surprised the public with extreme behaviour…

John McAfee

Described as “bonkers” by Belize premier Dean Barrow, the computer security pioneer fled the Central American country he called home in 2012 and illegally moved to Guatemala, after he was labelled a “person of interest” following the murder of Florida businessman Gregory Faull. Paranoid that the Belize police force was trying to kill him, McAfee hid away until he was eventually captured and deported back to the US that December.

Paul Flowers

Following the discovery of a £1.5 billion black hole in the balance sheet of the Co-operative Bank, chairman Flowers was arrested in November 2013 after he was filmed allegedly closing a drug deal. A media storm raged over his mismanagement of the bank, and in May last year the executive – who also practised as a Methodist minister – plead guilty to possession of ketamine, crystal meth and cocaine.

Mike Jeffries

Forced to step down from Abercrombie & Fitch’s top job at the turn of the year, Jeffries tended to let his personal tastes obscure his business skills. As well as openly admitting that he only wants “cool kids” to wear Abercrombie clothes, he installed a controversial policy of employing shop floor staff based on idealised, “model”-style beauty and had very particular standards for what male serving staff on his private jet should wear – right down to insisting on Abercrombie-branded boxer briefs.

Bob Parsons

The GoDaddy boss raised significant ire among animal-rights groups in 2011 after he took part in and filmed an elephant hunt in Zimbabwe and posted the clip online. In Parsons’ My Vacation Video, he recorded an elephant’s shooting and scenes of villagers ripping the creature apart for its meat. To make matters worse, many of the villagers could be seen wearing orange GoDaddy hats – doing precious little for the company’s public image.

For further thoughts on these issues, download CMI’s recent report The MoralDNA of Performance.

Image of Dov Charney courtesy of the Wikimedia Commons.