Top Ten Lessons Learned from American Apparel

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Top Ten Lessons Learned from American Apparel
David G. Gabor, Esq. The Wagner Law Group
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David G. Gabor

• Represents clients in
• Litigation
• Negotiating and drafting contracts
• Handling compliance issues
• Creating corporate infrastructure
• Drafting employee manuals, handbooks and policies
  
• Training management and employees
• Leading companies toward organizational
  excellence
• Skilled 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 Charney
• This is not an indictment of corporate decisions
  or the actions of the Board
• This is not a forum to kick professionals while
  they are down
• Nobody 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 line
• The EEOC received 93,727 charges in 2013
• 38,539 charges were filed for retaliation and
  27,687 for sex discrimination
• EEOCs 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 transpired
• Topics on this list can benefit most
  organizations with at least fifteen employees
• The list is not exclusive
• The focus is not on AA but on how to help your
  company

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Investigation of Complaints

• Who conducts the investigation?
• What is the purpose of the investigation?
• What do you do with the work product/results?
• Who knows about the investigation?
• What impact does prior investigations have?
• 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?
• Tell Sam to stop
• Report this to my boss
• Report this to Human Resources
• Do nothing
• What 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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Dont Assume

• Confirm that policies are adequate
• Appropriate action is taken when issues arise
• Makes sure that the left hand know what the right
  hand is doing
• Employee Classification
• Proper protocol for requests for accommodations
• Protection 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 balances
• Ensuring 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
David G. Gabor dgabor_at_wagnerlawgroup.com www.wagne
rlawgroup.com
Boston Office 99 Summer Street, 13th
Floor Boston, MA 02110 Tel [phone] Fax
[phone] San Francisco Office 315
Montgomery Street, Suite 904 San Francisco, CA
94104 Tel [phone] Fax (415)
829-4385 Florida Office 7108 Fairway
Drive, Suite 125 Palm Beach Gardens, FL
33418 Tel [phone] Fax [phone]