Ethical Analysis of American Apparel Sexual Harassment Lawsuits

This essay analyses the ethical issues and moral dilemma imbedded in or exposed by the American Apparel Sexual harassment Lawsuits case. While the public and victims of Charney’s actions term it as sexual harassment, he has a totally different view. He calls it a marketing and creative working environment which he creates for his employees; some employees like it, others feel offended.

Those offended feel sexually harassed in the work place and term the environment not conducive for them to work. Employees who feel it is ok, claim to take nothing personal, not the salty language, the CEO walking around the premise in pants, pictures of half naked models displayed around the premises and company website. This is how the situation is at the American Apparel, a company manufacturing and selling apparel products made purely in America.

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The founder and CEO of this prestigious American company display behaviors that many would not correlate to his position, like walking around in the business premise in pants, asking for sex from his employees even sometimes at the workplace. His tricks seem to work because he has been able to build a business that makes up to $ 250 millions a year (Palmeri 1). The most offended employees quit their jobs and instituted sexual harassment lawsuits against him.

Dov Charney founded American apparel in 1989 when he was still a freshman at Tuft University and is now ranked among the top 500 rapidly growing companies. The company is now faced with issues of sexual harassment labeled against the CEO as well as some of the offer 4,500 employees of the company.

The company employs mostly Latinos and offers its employees an attractive wage package together with other benefits including; subsided lunches, health insurance as well as a paid time off to learn English. The CEO attributes the benefits the company offers her employee to the care and support that the employees give to the company to realize its growth potential. This principle is in accordance with Freeman’s stakeholder theory which alludes which defines stakeholders as the people who ensure the survival of the company.

Freeman indicates that a company should ensure the stakeholders’ welfare is well taken care of. In return to the labour, the company should provide security and attractive wages and a good working environment. Freeman points out that the traditional stakeholder models tend to disregard a broad view of stakeholders in which all those whose activities influence or are influenced by the company have to be included (Bowie 19)

The sexual harassment Lawsuits

The American apparel founder was sued by three of her former employees in 2006 for sexual harassment. In the lawsuit, the three complainants allege that Charney exposed himself to them; another one complains she was invited to masturbate with him. Charney is also accused of telling one of his lady employees to hire him Asian women so that he could have sex with them, among other charges of engaging in oral sex with the female employees and masturbating in front of a female reporter during an interview with her.

In defense, he alleges that the lady employees who sued him of sexual harassment were a mere disgruntled lot of employees seeking revenge against him. Two of the three employees who had sued dropped the cases against their former CEO; Mary continues to pursue the case. The law is not clear on how the charges leveled on Charney should be responded to, Charney feels what he does is directed towards marketing and should not be construed to be sexual harassment against the female employees.

Business Ethics

The business ethics point of view holds that the business managers need to be virtuous people with proper judgment about situations. According to Aristotle, as a business manager, one has to have the business ethics and know how to apply them as well.

Based on the Aristotelian view of ethics the conduct of the American apparel CEO, Charney is questionable (Aristotle 34). It is true there may be no law to restrict one on how they should put on in workplaces, the perception people have over the inappropriate language Charney uses may be different from person to another.

Some people may not take it so personal and so it may not be hurting to them, others can not perceive it as a language to encourage creativity in such a work place and so it becomes hurting. Whichever the case, good is universal, it is hard for something to receive a universal approval but a good behavior is what receives a large degree of approval. Since Charney’s conduct was not universally acceptable to his employees and the society at large.

His business is successful but his ethics are not upright, his morals conduct does not promote general happiness to all employees. As pointed out by the employment attorney, it is out of conduct to subject women to unacceptable conduct and justify it as a course of your working environment (Chryssides & Kaler 26).

Our ethics should have a guiding principle that aims at attaining the highest good for a majority of the people around us. Mill categorizes morally right actions as those that promote the happiness of the people associated to us. If our actions cause pain to many or some of the people who are close to us then they are not morally wrong.

At American apparel, the women employees were at pains with the CEO’s act of exposing himself to them, they were also unhappy with his salty language as well as the sexual advances he was making to them. Most of Charney’s’ actions were morally wrong and caused pains in the hearts of some of the employees.

The pain resulting from his actions caused three of his former employees to sue him as a way of protesting against his behavior. It causes wonder that the modern world sometimes chooses to reward the evil more than the holy; this likely is why people have decided to massively support a business whose owner is more associated with unacceptable moral conduct.

The unacceptable moral conduct of the CEO seems to have trickled down to some of the employees especially those in the top management positions. A number of employees confess to being offended by the sexual atmosphere in their work place, starting from the CEO displaying himself in pants to them, the inappropriate sexually abusive language and the unsolicited sexual advances from the CEO and the some senior managers.

The junior staff fall prey to the pursuant of sex who are mainly their seniors. All human actions as pointed out by are directed towards some goal of life, the desire to attain that particular goal becomes the driving force to attain the goal (Mill 2).

Charney is a very ambitious entrepreneur, who seems to be ready to compromise his moral character in the public for the sake of attracting interested customers to his premises. We all have a sense to inform us of what is right or wrong, sometimes the wrong things are more tempting and we tend to drift from the right actions to what we know and perceive to be wrong.

The business ethics theories are not just ignored by the business managers in the current business world, they also are not aware of how to apply the theories (Chadwick & Schroeder 80). Charney’s case does not correlate to ignorance; his actions are more of a habit that is much more difficult to change in an individual.

It may be prudent that those working with him learn to ignore what he does. The worst part of it is the offensiveness it causes to the targeted audience who are employees. It is not possible that every employee will adapt to the nonsense committed by this CEO. It is difficult to conform to it because it is not a universally acceptable code of conduct especially in the public. For the fact that there are followers of the fan that the CEO creates, there are those who are utterly offended by it and should be protected from it.

He was on the forefront to prevent his employees from being members of a union meant to fight for their welfare. The employee union is meant to fight and protect the interests of employees in any organization.

Such interests include; appropriate salary packages, good working conditions and the general employee welfare. By preventing his employees from being unionizable, it means their must be some unacceptable means of employee management that was being applied at the company which he was scared the union would abolish.

He developed mechanisms to ensure that his employees did not attend union meetings or become members of the union. The mechanisms included; threats to shut down the company if employees insisted on becoming members of the union, interrogating those who attended union meetings and forcing them to attend anti-union meetings.

Business has been in existence for quite a long time, the end of it being to earn profits. The aspect of business ethics was introduced to by the early philosophers led by Aristotle to ensure those involved in business followed some ethics that could reflect morals in dealing with human beings.

The dealings with human beings are on the basis of employee-employer relations as well as business to customer and supplier relationship. A business should observe the moral standings acceptable as universally good. The profits generated by businesses should according to the business ethics principles by Aristotle be used to the welfare of the employees as well as that of the society surrounding the business enterprises.

A business as a member of the society must be involved in uplifting the living standards of the people living within the society that the business serves. This is perceived as a way of giving back to the society part of what they have given to the business in terms of labour and money given in terms of purchases.


Ethical principles are important in all our life aspects and should be regarded in all our relations; business ethics should be learned and applied appropriately by business managers. Ethics in business include the human relations that employers maintain between them and fellow employees.

Employers should make sure that their employees’ welfare is well catered for and the working environment is properly conducive for them to work. The terms of service together with the wages should be of acceptable standards. Employees offer their loyal services to the business, in return to this, the business owners need to provide the employees security, standard working conditions and wages.

Business do generate profits, from ethical point of view, the profits generated should be shared among the business stakeholders. A business is a social cooperate member of a society. As a social cooperate member, the business should be involved in the development of the lives of the members of society by investing part of the profits earned in community projects.

Work Cited

Aristotle. Nicomachean Ethic. Trans. D. P. Chase. London: Courier Dover Publications, 1998.

Bowie, E., Norman. The Blackwell Guide to Business Ethics. Massachusetts: Wiley- Blackwell, 2002

Chadwick, F. Ruth, and Schroeder Doris. Applied Ethics: Critical Concepts In Philosophy. New York: Taylor and Francis, 2002.

Chryssides,D. George, and Kaler H. John. An Introduction to Business Ethics. London: Thompsons learning, 2006.

Mill John Stuart. The Basic Writings of John Stuart Mill: on Liberty, the Subjection of Women, and Utilitarianism. London: Modern Library, 2002.

Palmeri, Christopher. Living on the Edge at American Apparel
Dov Charney’s fast-growing clothing company is built on pro-labor policies, racy ads, and a sexually charged culture. Business Week. 27th June, 2005. 4th March, 2010.


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