American Apparel CEO Accused of Rubbing Dirt on Face, Silencing Workers

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"The allegations in this lawsuit are false and Mr. Bumblis and his lawyers know that any complaints the company may have against Mr. Bumblis, or complaints he may have against the company, are to be addressed in binding arbitration, not in the media or the courts," Schey said in a statement. "In addition to the conduct that led to his termination, Mr. Bumblis has also violated his written agreement to arbitrate any disputes with the company. We will shortly initiate arbitration against Mr. Bumblis and have no doubt that the court will require that he join the arbitration proceedings where we expect the company's claims against him will be upheld."

Bumblis acknowledges in his suit that he signed as a condition of employment a "Mandatory Arbitration and Mediation Agreement" and an "At Will Employment Confidentiality Agreement." The suit states that the latter contains a provision of liquidated damages of $1 million "chargeable against any employee that reveals virtually any detail of their employment."

The suit states that these agreements "bar employees from voicing grievances, filing complaints and exercising their rights to protected speech."

"Instead of curbing Mr. Charney and protecting their employees, American Apparel's board of directors, officers and lawyers have repeatedly protected him through legal tactics, such as confidentiality provisions and arbitration clauses in employment agreements, which effectively silence the voices of their aggrieved employees, relegating their complaints to the dark back rooms of private courts, away from the scrutiny of the public and American Apparel's shareholders," Heimanson said.

American Apparel employs about 10,000 people around the world, half of whom are in Los Angeles, and operates over 285 retail stores in 20 countries.

The company sells casual clothing and accessories to men and women and is known for its racy marketing with photos of young models.

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