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American Apparel Says Ex-CEO Charney Created Union

LOS ANGELES (CN) - Former American Apparel founder Dov Charney enlisted friends, roommates, and former executives to create a textile union organizing at the retailer's LA warehouses, the company claims in court papers filed this week.

Celebrity lawyer Keith Fink is representing Charney in his legal challenge against the National Labor Relations Board, which has asked a judge to order the 47-year-old Canadian-born businessman to testify at the labor board's hearings.

Charney has so far defied an American Apparel subpoena asking him to appear at board hearings.

The clothier-turned-retailer wants its former CEO to explain his ties to the organization, General Brotherhood of Workers of American Apparel.

In a March 8 opposition, the law firm representing Charney asserts that the board's attempt to enforce American Apparel's subpoena would "compel Charney to testify about matters far beyond the realm of permissible inquiry."

There are no guarantees that Charney's personal and private information will remain confidential, the 12-page opposition states, calling the labor board's application to the court "an abhorrent abuse of a subpoena initially intended to serve as an ordinary request for documents."

Charney's opposition adds: "The NLRB has since expanded its scope of inquiry, and now seeks this court to not only force Charney to testify about the documents referenced in the subpoena but also offer testimony about anything remotely related to American Apparel."

The retailer wants to see emails between Charney and his friends so it can establish the level of support he has given to the union, dubbed "TeamDov" in court papers.

But Charney says that in the event he has to comply, he wants limits on how many emails and communications he has to share with his former employer.

The opposition lists five other lawsuits that Charney has filed against American Apparel in the wake of his ouster, and accuses the retailer of mounting a "fishing expedition" to gain a legal advantage.

"By casting a wide net and seeking to obtain testimony from Charney about anything related to American Apparel, the charging party is effectively on a ?shing expedition with the hopes of acquiring advantageous information not otherwise available to them as those matters are currently stayed pending American Apparel's bankruptcy proceedings in the United States Bankruptcy Court, District of Delaware," the opposition states.

Charney is fighting American's Apparel's reorganization plan in the bankruptcy court and attempting to reverse his December 2014 firing as CEO. The retailer ousted Charney after allegations of personal and financial misconduct.

The labor board is an independent agency of the U.S. government and oversees elections for union representation.

In its election petition to the board, General Brotherhood says its 2,100 members have protested working conditions at the retailer. The union was ostensibly created to protect the rights of Spanish-speaking immigrant workers.

But in a reply to Charney, American Apparel says that the union is illegitimate, was created to serve the businessman's interests, and that the group could not "fairly represent the interests of the workers, even if elected."

"Mr. Charney has used every tactic imaginable to claw his way back to the head of the company - including organizing workers to demand his return as CEO," the March 15 reply states.

Filed by Paul Hastings attorney Al Latham, American Apparel's reply says Charney's friends, roommates and former members of his executive team created a group called "Save American Apparel" that later morphed into the union.

The retailer is asking U.S. Magistrate Judge Kenly Kiya Kato to grant the labor board's application for an order requiring compliance with the subpoena.

American Apparel spokeswoman Arielle Patrick declined to comment.

In another development, a legal malpractice lawsuit with Charney as plaintiff was filed this week against the firm Glaser Weil Fink Howard Avchen.

The pro se lawsuit - stamped as "fee waiver pending" - claims that Glaser Weil failed to properly represent Charney when he signed agreements with hedge fund Standard General and American Apparel in June and July of 2014, the year he was fired.

"For example, there was no explicit indemnity provision in the aforementioned contracts, which prevented me from obtaining advancement for my legal expenses, and impaired my ability to defend myself since I could not afford the defense costs," Charney's complaint states.

"There were many other examples like the one above, which will be presented in trial," the lawsuit states, adding that if the firm had advised Charney properly he "would have sought to negotiate a better deal with my opponents and/or not have signed one or more of the agreements that I ended up signing."

The Los Angeles County Superior Court lawsuit lists the address of Charney's Silver Lake mansion. His Garbutt House residence on Apex Avenue is listed on the National Register of Historic Places.

Multiple calls to the phone number listed on the lawsuit connected to an automated customer unavailable message.

Glaser Weil attorney Patricia Glaser called Charney's claims "pathetic" during a phone interview and said his claims are unfounded.

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