An employment law case going to trial this week in Los Angeles presents the issue of what, if anything, constitutes sexual harassment in the “sexually charged” workplace of a clothing company that caters to young hipsters.

The eccentric behavior of American Apparel CEO Dov Charney is legendary within the fashion industry. But Mary Nelson, who worked as an independent contractor in the sales department, alleges he “openly operates his company as a despot wearing nothing but his underpants.”

“AA's workplace under Dov Charney's reign is and has been a hostile work environment based on sex,” she says in a trial brief. “As such, this emperor's reign of sexual terror must end.”

Jury selection in Nelson's case against American Apparel (AMEX: APP) and Charney is scheduled to begin Jan. 23 and the specific incidents of harassment allegedly include a meeting at Charney's home during which he changed out of his underwear into “an even more revealing outfit, a 'cock sock.'”

The defendants' theory of the case is that in the context of a workplace where explicit sexuality is the norm, Nelson cannot show any harassment was directed at her because of her gender.

“American Apparel is a workplace where employees of both genders deal with sexually charged imagery, conduct, speech and photographs as part of their jobs,” the defense's trial brief argues, and “such conduct and speech does not constitute sexual harassment.”

The brief also depicts Nelson as a participant in the general vulgarity who “freely used curse words and foul language” and even “exposed and fondled her own breasts in front of numerous American Apparel employees.”

The California Supreme Court recently endorsed the “context” defense in finding that a former writer's assistant could not sue the producers of the TV show “Friends” for sexual harassment. Such a claim “requires careful consideration of the social context in which particular behavior occurs and is experienced by the target,” it said in Lyle v. Warner Bros. Television, 30 Cal.4th 264 (2006).

Similarly in a former editor's case against The Source, a New York jury in October 2006 agreed with the defense that sexually charged behavior was to be expected at a hip-hop magazine “about a lifestyle where sexual comments, jokes and innuendo were the norm.”

Charney's attorneys aren't saying it was normal for him to parade around the workplace in his underwear, but that he did so “occasionally” as American Apparel's “fit model for male undergarments.” He modeled the “infamous” cock sock, they say, to “decide whether or not to include” it in the company's product line.

Nelson also alleges Charney is liable for retaliation because he fired her after learning she had consulted an attorney about filing a harassment complaint. The defense, however, insists he was “dissatisfied with Nelson's personal skills as a salesperson” and that she spent too much of her time at work discussing her romantic problems.

Among other things, the defense says, Nelson talked about her long-time boyfriend cheating on her with the actress Lara Flynn Boyle.

By Matthew Heller
1/21/08