LOS ANGELES (CN) – In the most recent lawsuit in a series attacking the business methods of American Apparel’s hipster CEO Dov Charney, former employee Bernhard-Axel Brake accuses Charney of manipulating the company’s stock and abusing its employees while insisting that a gang of incompetent girlfriends run the company’s European stores.
Brake, American Apparel’s former international wholesale director, says Charney broke labor and tax laws in order to lower company costs. Charney paid employees with cash or clothing to avoid paying taxes on income, says the director’s complaint in Superior Court.
Charney also bumped the cost basis for apparel from 27 percent to 40 percent of the gross sale price, says the complaint. And he allegedly demanded that director Brake record rent and other expenses for unopened stores as deferred rent to keep those costs off the books.
In the matter of method, Charney ran the company “based on his perverse need to sexualize the workplace,” giving regular illegal “bonuses” to numerous girlfriends who were known within the company as “Dov’s Girls,” says the complaint. Instead of hiring the most qualified employees, Charney allegedly told Brake to hire employees who had the “dirty MySpace girls” look or the underage “Ralph Lauren junior” look.
Brake says the girlfriends wasted more than half a million Euros when their random redesigning ideas delayed the stores’ opening dates.
Brake accuses Charney of a long list of other offenses, saying he: threatened employees by screaming that he would send them to Auschwitz, and regularly yelled “Heil Hitler;” bought hundreds of pornographic videos with company money, claiming that the videos were “research;” tried to use company money to pay for the services of a prostitute; and took sexual pictures of underage girls for the company’s French ads.
The complaint says he continued to use underage girls for the French, even after the French government sued American Apparel over the practice.
In other litigation against Charney and his company, a German court has ordered the company to reinstate an employee, and two other employees have cases pending in the German court, according to the most recent complaint..
Brake is represented in Los Angeles Superior Court by Keith Fink.