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APP Global Compliance Applications Corp

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Last Updated: 01:00:00
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Share Name Share Symbol Market Type
Global Compliance Applications Corp CSE:APP CSE Common Stock
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 0.005 0.005 0.01 0 01:00:00

American Apparel Ordered to Pay More Than $3 Million in Arbitration

10/06/2015 1:40am

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Arbitrators ordered retailer American Apparel Inc. to pay more than $3 million to resolve several claims of sexual harassment and defamation against the company and its former chief executive, Dov Charney, according to court documents.

Five former employees and models for the chain filed complaints in 2011 in Los Angeles Superior Court against Mr. Charney and the company. The claims were all sent to arbitration due to a company policy that bars employees from resolving disputes in court. The proceedings were confidential and remain sealed, but a judge allowed the amounts of three awards to be disclosed after three of the plaintiffs petitioned the Superior Court to unseal them.

The awards were disclosed in court documents earlier this year but weren't publicized at the time by either side.

Mr. Charney referred questions to his attorney, who couldn't be reached for comment. An American Apparel spokesman declined to comment.

The three awards range from $200,000 to $2 million, according to court documents. "We're pleased with the outcome of all of the cases," said Toni Jaramilla, a lawyer who represented the three women and petitioned the court to unseal the amounts.

With attorneys' fees and other costs, American Apparel paid out more than $4.5 million in the three cases, according to the court documents. The judge's order confirming one of the awards notes that the company "does not admit liability, and continues to dispute liability, as to all claims." in that case.

Allowing the disclosure of the awards' size signals the seriousness of the allegations, said Mariko Yoshihara, policy director for the California Employment Lawyers Association, which has pursued the overhaul of arbitration accords imposed on workers as an employment condition.

The amounts are unusually large for arbitration awards. The average award for successful plaintiffs in employment-related arbitrations is $110,000, research from Cornell University shows.

Since his ouster last year, Mr. Charney and American Apparel have been engaged in a bruising battle over control of the chain and the terms of his dismissal.

Write to Lauren Weber at lauren.weber@wsj.com

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