Wednesday, March 9, 2011

American Apparel CEO held teen as sex captive: suit

American Apparel CEO held teen as sex captive: suit

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American Apparel Inc
1:58pm EST

American Apparel owner Dov Charney speaks during a May Day rally protest march for immigrant rights, in downtown Los Angeles May 1, 2009. REUTERS/Mario Anzuoni
NEW YORK | Wed Mar 9, 2011 1:59pm EST
NEW YORK (Reuters) - A former American Apparel Inc saleswoman accused Dov Charney, the clothing retailer's founder and chief executive, in a lawsuit of treating her as a sex captive while she was a teenager.
The lawsuit filed by Irene Morales, a resident of Brooklyn, seeks $250 million in damages. It accuses Charney of sexual harassment, creating a hostile workplace, gender discrimination and retaliation.
American Apparel and directors at the Los Angeles-based company were also named as defendants in the lawsuit, filed in a New York state court on Friday.
Morales accused them of failing to protect her, saying they knew or should have known Charney was a "sexual predator."
Charney, 42, has been targeted repeatedly in sexual harassment lawsuits. [ID:nSGE64H0DB] He owns about 51.8 percent of American Apparel, a regulatory filing shows.
Reached on his cellphone, Charney declined to comment, referring a reporter to his lawyer. The lawyer, Peter Schey, did not immediately respond to requests for comment.
American Apparel did not respond to several requests for comment. Eric Baum, Morales' lawyer, was unavailable for immediate comment on Wednesday.
The lawsuit comes as American Apparel struggles with losses and falling sales. Known for provocative advertising, the company is trying to refinance its debt, and has said there is substantial doubt about its ability to stay in business.
In her complaint, Morales said she started working for American Apparel in 2007, when she was 17 and in high school.
She said Charney demanded that she visit his Manhattan apartment shortly after her 18th birthday, and he answered his door while wearing only underpants.
Charney then forced her to perform oral sex and other sexual acts over several hours, effectively holding her "prisoner" in his apartment, Morales said.
She said that over the next eight months, she was forced to perform many more sex acts with Charney or else risk losing her job. Morales said she ultimately quit her $10.25-an-hour job and underwent extensive psychiatric treatment.
American Apparel shares were unchanged at $1.07 in afternoon trading on the American Stock Exchange.
The case is Morales v. American Apparel Inc et al, New York State Supreme Court, Kings County, No. 5018/2011.
(Reporting by Jonathan Stempel in New York, editing by Matthew Lewis)

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