American Apparel CEO Faces Controversial Charges In Court

American Apparel CEO Dov Charney (above) is no stranger to controversy, but the latest developments in the case brought against him by former AA employee Mary Nelson take the cake. While the charges are complicated, the basic synopsis of reports on the case so far is that Nelson sued for sexual harassment, and American Apparel agreed to settle for $1.3 million under the condition that she allowed the company to send out a press release saying that Charney had been found not guilty in court.

The news leaked and now there are all kinds of developments being reported on. One article on Hollywood Interrupted says Charney is the victim, and reports that Nelson’s lawyer, Keith Fink, (below) has been “plaguing a wealth of celebrities for years.”

According to the post Fink is a “serial settlement seeker.”

From Hollywood Interrupted: “The lawyer concocts lurid allegations that he leaks to the media to leverage settlements from his name-brand targets: He has sued Marilyn Manson (for using the band’s money to purchase ‘Nazi skeletons’); Brad Pitt’s agent (for “conducting meetings in the nude,”) and Ellen DeGeneres (for breaking a dog adoption agreement over which she later cried on national TV). In Dov Charney’s case, he alleged that Dov wore a “cock sock,” held meetings in the nude (clearly a recycled claim from a previous case) and supposedly told plaintiff Mary Nelson that she could “come over to his house, watch TV, have a drink, even masturbate and leave,” and he would still have faith in her.

According to the article, the court ruled that Nelson—having claimed that being wrongfully terminated by AA forced her to take a low paying job— failed to disclose her full earnings in court. As a result, Nelson was sanctioned for $7,500 and Fink is under investigation by the California State Bar.

There’s even a link to the court documents.

Regardless, American Apparel’s vertical integration seems to be paying off. Charney announced in a press conference in September that AA had reached several milestones during 2008. He says the company is the largest garment factory in the US, has hired more than 3,500 employees in 2008, and topped 10,000 employees world wide this year.

Charney also announced American Apparel has granted of roughly 1.9 million shares of the firm’s common stock to its factory employees, worth approximately $18 million. The company will distribute another 800,000 shares in the near future, Charney said.