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American Apparel employees are letting it be known that they aren't too happy with the way things are going with the beleaguered clothing company. Case in point: workers beat a piñata bearing the likeness of their new CEO outside of the retailer's downtown L.A. headquarters last week.
This protest, which was filmed last Wednesday, came just a couple of days after American Apparel announced that they might not have enough money to continue operating for the next 12 months, something analysts say is a hint that the company facing a Chapter 11 bankruptcy filing. It also comes over a year after former CEO Dov Charney was ousted.
The face of Paula Schneider, who's been CEO for the past eight months, was plastered on the piñata, which showed her wearing a white business suit and holding an orange Birkin bag. The description of the YouTube video of the piñata beating, which was uploaded by the Workers Together Save American Apparel group, says the purse represents one of Schneider's first purchases after landing the CEO gig. The piñata was filled with chocolate gold coins and play money, a representation of her "reckless decision to lead American Apparel into financial peril," the group said.
"In Mexico, the piñata has a long tradition of being used as a prop for political commentary of unpopular public figures," according to the video, which shows people wearing "I <3 Dov" and "Dov wouldn't let this happen to us" T-shirts taking turns batting down the Schneider effigy. (This reminds us of the trash-filled piñatas of Donald Trump that were selling out in July in preparation for a demonstration following his racist remarks suggesting that Mexican immigrants are rapists and criminals.)
The group also argues that Schneider still hasn't fulfilled her promises of paying American Apparel's garment workers their Christmas bonuses from last year, in addition to workers losing 50 percent in wages and benefits, as well as suffering from work furloughs. They also wanted to bring to light the recent firings of workers, and say they've seen their work being passed off to sweatshops instead.
The workers are trying to get unionized. General Brotherhood of Workers of American Apparel (GBWAA) sent a letter to the company's management to be recognized, and also registered with the U.S. Department of Labor earlier this month, the L.A. Business Journal reports. They told the outlet that American Apparel announced to them that they would no longer be paying for their health insurance premiums for the employees' spouses, adding more salt to the wound.
Since Standard General, the hedge fund that jumped in to invest in the company last year, began overseeing American Apparel, there have been lots of changes to clean up the financial mess left behind. They laid off 180 employees, which made up almost 2 percent of the company's workforce earlier this year.
BuzzFeed obtained a copy of Schneider's letter to employees on August 20 following the protest. Schneider wrote, "Many of you have reached out to me to express your dismay over the demonstration held out in front of our corporate HQ yesterday that included violently beating a Piñata in my likeness. I'm sorry this happened and I thank you for your support and kindness."
She called the group's "intimidation tactics" "truly appalling." Schneider also addressed the firing of one of American Apparel's employees:
Some of you wonder why Esmerelda Morales was terminated. The fact is that Esmerelda sent me a very threatening and disturbing email showing a war zone of people getting blown up. This is intimidation and not acceptable workplace behavior from anyone as is clearly outlined in our business code of conduct. In addition, a group showed up at one of our stores last Saturday to picket a retail store event (to increase sales) and harassed our employees at the store. We have heard that the plan is to now focus on picketing our retail stores. In fact the picketers left here yesterday afternoon and picketed our Little Tokyo location. This resulted in customers leaving our store. If this continues we will lose sales and lost sales mean lost jobs. I would encourage all of our employees to support our company, and not tear it down.
Schneider apparently sent an earlier letter to employees about the picketing, calling it an "aggressive attack" with "threatening behavior." GBWAA and Hermandad Hermana, which Jezebel reports is an organization helping the group unionize, had a response to Schneider's take on the situation, in a letter they posted on the Workers Together Save American Apparel website. They said her description of the events were missing details, that it was an organized union protest demanding Schneider's resignation over the firing of three recently appointed union organizers, which included Morales. "The 'threatening' group, as you so said, was comprised of current workers and wrongfully terminated employees standing up against the embarrassing management team, including yourself and your colleagues, that are driving this company to bankruptcy."
Schneider also brought up the struggles the embattled company is facing in her letter. In addition to American Apparel's dwindling sales, she pointed out that the business is facing massive debt and has lost over $340 million over the last five years. There's also that whole business about the company having to pony up a ton of money in legal fees to battle over 30 lawsuits they're facing, some filed by Charney and former and current employees.
"We have had to defend all of these lawsuits and pay very costly attorney’s fees, instead of buying yarn and fabric to help the turnaround plan," she wrote.
Charney has filed several lawsuits against the company, accusing them of wrongful termination, since he was ousted last June. American Apparel released documents this June giving details about Charney's alleged gross misconduct, which led to his firing, which included him calling employees "Filipino pigs" and storing porn of himself on company servers. There's more, though. In 2011, a group of women sued Charney for sexual assault allegations, one of which included the accusation that he violently kissed her and forced her to perform sexual acts on him. That same month, another lawsuit was filed against Charney, saying that he forced a teenager to perform fellatio on him and nearly suffocated her in the process in his New York apartment.
However, Charney recently told Business Insider that several of the sexual harassment lawsuits have either been dismissed or settled. This includes the case involving Irene Morales, the woman who accused him of using her as a "sex slave" in his apartment. That case was tossed out because it was supposed to be dealt with in a New York courthouse but a California court also had the case in arbitration, according to Jezebel. Although his lawyers said it was a frivolous lawsuit, ultimately, it was still settled outside of court for $1.56 million.
Schneider may be just a prime example of a 2014 study that found that boards were more likely to hire women or minorities when the business is flailing or is in financial crisis. The study, published in Strategic Management Journal, found that while traditional CEOs would look at joining a floundering company as something risky, women and minorities would more likely take the CEO positions because they would see it as "their only chance," the Guardian reports. Christy Glass, a Utah University professor and co-researcher of the study, said boards may see a woman as being upbeat and being able to rally employees as she tries to pull the company out of it problems.
