The production system of American Apparel centralizes most of its employees in a single location. By not outsourcing, founder and former CEO Dov Charney believed that he knew his workers better and that it tied them directly to the brand. A banner on top of the downtown factory states "American Apparel is an Industrial Revolution." Charney had also previously stated that American Apparel hired its creatives by their sense of culture and fashion, not their resume. Conversely, the company has also been accused of focusing on personal style and outward appearance in its hiring practices for retail positions. According to Charney, the unconventional corporate culture at American Apparel was responsible for the company's creativity and rapid growth. Charney also stated that the company was open about sexuality and its culture because "young people like honesty". The company has been criticized for its unconventional corporate culture. Charney claimed to have slept with employees, and reportedly
masturbated numerous times and had
oral sex performed on him by an employee during a series of interviews with a writer for the magazine
Jane.
Production American Apparel believes in making clothing through controlling almost every step in their supply chain through the process of vertical integration. Meaning that they own and operate the factories that produce the majority of their products which are sold. The company has direct control from raw materials to the finished product which allows them to ensure responsible and sustainable practices. This control over their supply chain gives American Apparel the ability to minimize their impact on the environment, offer fair wages and fair benefits. On the occasion where American Apparel does not have the correct equipment or enough capacity, they then use contractors and suppliers for certain tasks or products. When outsourcing, they apply a comprehensive selection process to assess the contractor's ability to comply with their quality standards, labor and environmental standards, and with their Code of Conduct. The contractors must also comply with international laws such as the Worldwide Responsible Accredited Production (WRAP) and the Fair Labor Association (FLA).
Sexual harassment lawsuits As of 2012, American Apparel has been sued in seven public
sexual harassment lawsuits; all were dismissed, "thrown out", remanded to
arbitration, or in one case, settled but with "no monetary liability to the company". Many cases were remanded to arbitration because the company required employees to sign away their right to any legal claim against Charney or American Apparel. In one prominent case, the company was sued by four ex-models for sexual harassment—including one separately named plaintiff who sued the company for $250 million—in a lawsuit which involved mutual nude photographs, sexual text messages and requests for money. The company was accused of being responsible for these leaks in a later lawsuit. However, the case was dismissed by a New York City judge in 2012. In another case, American Apparel was reprimanded in an opinion by the Second Appellate District for a settlement in which the plaintiff, Ms. Nelson, would agree that she had not been subjected to sexual harassment. American Apparel attempted to issue a press release which mentioned an arbitration hearing that had, in fact, never taken place due to Ms. Nelson's lawyer
Keith Fink not showing up for arbitration.
Keith Fink would instead later go on to represent Dov Charney in future cases, including defending against allegations of sexual harassment and
assault. As of 2013, only one case, a "class action [lawsuit] on behalf of all female employees" which contains no "specific allegations against Charney," remains active. In response to the lawsuits, American Apparel has claimed that the lawsuits were
extortionary attempts to "shake the company down", and has run advertisements saying so. Charney has maintained his innocence in all the lawsuits, telling CNBC that "allegations that I acted improperly at any time are completely a fiction." On July 1, 2025, Netflix released an episode on their docuseries "
Trainwreck" regarding the working conditions at American Apparel, interviewing several past employees about the ups and downs of the company. It highlighted various aspects of working with and around Charney, including working shifts as long as 36 hours. It also shed light on the sexual harassments allegations and controversies regarding Charney and women, including minors.
Labor As of 2008, the company employed more than 10,000 people and operated more than 200 retail locations in 20 countries. According to the
San Francisco Chronicle the average factory worker at the company makes $80–120 per day, or roughly $500 per week compared to the $30–40 made daily at most other Los Angeles-based garment factories. Employees also receive benefits such as
paid time off,
health care, company-subsidized lunches,
bus passes, free
English as an additional language classes, on-site massage therapists, free bicycles and on-site bike mechanics, free parking in addition to the proper lighting and ventilation. Every floor of the factory includes free telephones where workers can make and receive long-distance phone calls. The company's employees in foreign countries do not receive the same hourly wages as their Los Angeles counterparts. However, employees in China will earn
US Federal minimum wage. Approximately 4,000 of the company's employees are eligible for the program. In 2010 the company was actively looking for staff following an investigation by US immigration found that 1,500 of its workers lacked the legal immigration documents and were subsequently dismissed.
New York Times reporter
Rob Walker wrote about the controversy in his book
Buying In and revealed that since the unionization drive, the company Sweat X, which was held up as the example for what American Apparel should be, had since gone out of business. He quotes Charney saying more explicitly that "[Sweat X] ... fucking failed." The differences between American Apparel and Sweat X were the subject of the 2010 documentary
No Sweat. In 2015, the company hired the
union-busting firm Cruz & Associates. The firm was paid a total of $462,343.
Immigration issues As early as 2001, American Apparel has been a vocal advocate for reform of U.S. immigration laws. On May 1, 2002, American Apparel shut down its factory to allow the company's workers, many of whom are immigrants, to participate in a pro-immigration rally in downtown Los Angeles. Dov Charney, a Canadian, also marched alongside the workers. American Apparel participates annually in the May 1st Immigration March and Rally in downtown Los Angeles. In 2008, they added a route from their factory that eventually connected with other supporters near the city hall. The company's politics were eventually spun off into the
Legalize LA advertising campaign. In 2009, an
ICE audit of American Apparel's employment records uncovered discrepancies in the documentation of about 25% of the company's workers, implying mainly that they were undocumented immigrants. American Apparel terminated the employment of about 1,500 employees that September as a result. American Apparel responded with questions of the effectiveness of such an action and said
"[the firings] will not help the economy, will not make us safer. No matter how we choose to define or label them [undocumented immigrants] are hard-working, taxpaying workers." The ICE audit highlighted a new strategy from President Obama which announced they were shifting away from high-profile raids. According to CEO Dov Charney, American Apparel promised its workers who were fired for improper immigration documentation that they would be given "priority treatment, in terms of being interviewed for future positions with the company", if and when they "got [their] immigration papers in order." Commenting on the loss of 1,500 workers due to concerns over illegal immigration Charney said "It broke our efficiencies and generated a situation where we were late delivering garments. It lost us an enormous amount of money. It cost us agility."
Environmental policies The company depends on
environmentally friendly practices and is known for its innovations in sustainability due to vertical integration. American Apparel manufacturing system is designed around the concept of "Creative Reuse"—which converts excess fabric from one garment template into several additional garments such as bathing suit tops, belts, headbands, bows, bras, underwear and children's clothing. This otherwise wasted material reduces the amount of fabric the company needs to produce in addition to expanding its product line and saves approximately 30,000 pounds of cotton per week. American Apparel maintains a bicycle lending program for its employees and according to
People for the Ethical Treatment of Animals it is a
vegan-friendly clothing company. As of 2007 the company planned to increase its use of
organic cotton within the next four years from over 20% to 80%. American Apparel also sells a line of shirts under the "Sustainable" label that are 100%
USDA organic cotton. In 2008, American Apparel purchased over 30,000 pounds of
organic cotton known as B.A.S.I.C cotton. These panels power as much as 30% of the factory.
Philanthropy In 2005, the company hosted a
bikini car wash benefit with the
American Red Cross to raise money for the victims of
Hurricane Katrina. In addition, they packaged and delivered 80,000 shirts to the relief effort in
New Orleans and the
Gulf Coast. As an underwriter of
Farm Aid, American Apparel donates the blank shirts that the organization prints and sells as merchandise. In 2007, right before Christmas, American Apparel donated more than 300,000 articles of clothing, with the giveaway specifically targeting the homeless population of large cities. In 2009, the company had a "Justice for Immigrants" factory sale in Los Angeles—the proceeds of which benefitted organizations such as the Casa Libre Immigrant Children's Homeless Youth Shelter, the Center for Human Rights and Constitutional Law, the Coalition for Humane Immigration Reform of Los Angeles, Hermandad Mexicana Latinoamericana, and the National Day Laborers Organizing Network. American Apparel also donated more than $400,000 worth of garments to the victims of the
2010 Haiti earthquake through Fashion Delivers as well as over 5,000 pairs of socks to the shoe charity
Soles4Souls.
Criticism American Apparel was criticized in October 2013 for a "culturally insensitive display" in one of its New York stores. The display used imagery associated with
Traditional African religion and
Afro-American religion. This sparked outrage among some practitioners of these various religions, that include
Haitian Vodou,
Louisiana Voodoo,
West African Vodun, Cuban
Santería, and others. ==See also==