Top Ten Lessons Learned from American Apparel

David G. Gabor, Esq. The Wagner Law Group

David G. Gabor

Represents clients in:LitigationNegotiating and drafting contractsHandling compliance issuesCreating corporate infrastructureDrafting employee manuals, handbooks and policies Training management and employeesLeading companies toward organizational excellenceSkilled negotiator, mediator and investigator

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American Apparel

American Apparel (“AA”) boasts that it has kept its entire operation local while it has become the norm amongst the majority of US apparel companies to move their manufacturing operations abroad to third party vendors. AA is vertically integrated, and operates the largest apparel manufacturing facility in North America. AA prides itself in its marketing and its brand.

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What This Program is Not

This is not an indictment of Dov CharneyThis is not an indictment of corporate decisions or the actions of the BoardThis is not a forum to kick professionals while they are downNobody is going to get thrown under the bus in this program

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Why We Are Conducting This Webinar

Negative publicity can cause significant harm to an organization in terms of its impact on employees, market share and the bottom lineThe EEOC received 93,727 charges in 201338,539 charges were filed for retaliation and 27,687 for sex discriminationEEOC’s monetary recovery totaled $372.1 million

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Top Ten Lessons Learned

We have created a list of ten lessons that can be learned from what has transpiredTopics on this list can benefit most organizations with at least fifteen employeesThe list is not exclusive The focus is not on AA but on how to help your company

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Investigation of Complaints1) Who conducts the investigation?2) What is the purpose of the investigation?3) What do you do with the work product/results?4) Who knows about the investigation?5) What impact does prior investigations have?6) How do you protect against retaliation?

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Missed Opportunities

• The opportunity to determine whether an employee is abusive

• The opportunity to prevent sexual harassment• The opportunity to refine the culture• The opportunity to avoid unwanted litigation• The opportunity to avoid bad press

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Confidentiality Agreements

The use of confidentiality agreements can be dangerous for internal and external reasons. Internal: They can frustrate the ability for executives to know what is going on.External: The EEOC and the NLRB have recently attacked the legality of confidentiality Agreements.

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Empowering Human Resources

Human Resources (“HR”) can either be an integral part of an organization or it can sit on an island.HR is viewed as little more than a hall monitor by some organizations. That opens the door to abuse.When HR is viewed as an integral part of the team there are endless possibilities.

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What HR Can Do

• Create realistic policies• Create mechanisms to encourage reporting

which includes HR, Managers, hotlines, EAP, etc.• Training programs must be effective• Accountability• Avoid conflicts• Maintain employee engagement

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Executives

• Why organizations hire executives such as General Counsel, Chief Executive Officer, Chief Operating Officer, etc.

• The roles that these executives fill• The question of loyalty• Loyalty must be to the organization

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Employment Agreements

• Protect the employer and the executive• Use the document to empower the executive to

do what is best for the organization• Reduce the ability for the executive to exceed

authority• Hold the executive accountable for abuse of

authority• Eliminate fear of “doing the right thing”• Leads into perception

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Perception

I am an “at will” employee and am aware that Sam is harassing Jill. What should I do about it?a) Tell Sam to stop b) Report this to my bossc) Report this to Human Resourcesd) Do nothingWhat factors will influence my decision

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Ask Questions

My favorite clients are the ones who ask me questions before acting. Many HR professionals and in-house counsel call me on a regular basis. Why this is important.Surround yourself with strong resources.Have the ability to “kick the tires” within the company.Strive for receptivity to an open dialogue.

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Don’t Assume

Confirm that policies are adequateAppropriate action is taken when issues ariseMakes sure that the left hand know what the right hand is doingEmployee ClassificationProper protocol for requests for accommodationsProtection from charges of retaliation

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Culture

What the culture is vs. what you thing the culture is. “This can never happen in my company.”Figure out what you want the culture to be and then figure out how to get there. “This is what a successful …..looks like.”Be careful when experiencing growth.Set the bar high!!! This should be true for all personnel and their actions and interactions.

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The Board

Organizations that have a Board of Directors have a golden opportunity to do wonderful things.

Business decisions and planning Financial Legal Reporting Checks and balancesEnsuring retention of the best talent

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Precedent

Actions often speak far more loudly than words. The fact that an action is tolerated sends mixed messages.• He is too important to discipline• The result: a rule is not enforced• Perception: this organization does not care about

…• What co-workers know

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Create Processes That Work

Many companies cut corners or create unrealistic programs that will never be followed. • Manuals• Training• Managers/supervisors• Reporting• Auditing

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Review

• Investigations• Confidentiality agreements• Empowering Human Resources• Executives• Employment contracts• Perception

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Continued

• Ask questions• The culture• The Board • Precedent• Create processes that work

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Thank You

One goal of this program was to initiate a dialogue that would help organizations avoid catastrophic media coverage, high stakes litigation and the negative impact on the workforce. We are available to discuss these and other issues that may arise with you.

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Contact Information

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Boston Office 99 Summer Street, 13th Floor

Boston, MA 02110Tel: (617) 357-5200 Fax: (617) 357-5250

San Francisco Office315 Montgomery Street, Suite 904

San Francisco, CA 94104Tel: (415) 625-0002 Fax: (415) 829-4385

Florida Office 7108 Fairway Drive, Suite 125

Palm Beach Gardens, FL 33418Tel: (561) 293-3590 Fax: (561) 293-3591

David G. Gabordgabor@wagnerlawgroup.comwww.wagnerlawgroup.com