Legal News

We Lov Dov, Part III: American Apparel to Shed 1,500 Workers

By Ashby Jones

We’ve said it before: we’re not sure if American Apparel chief executive Dov Charney is a force for good in the world, but given his company’s stream of high-profile (and often bizarre) legal woes, he’s a Law Blog’s best friend.

The latest problem concerns not movie stars or titillating allegations, but the hot-button issue of immigration. American Apparel will lay off more than a quarter of its factory work force in Los Angeles amid a probe by U.S. immigration authorities.

In early July, the company announced that it had been notified by U.S. Immigration and Customs Enforcement that 1,600 of it is 5,600 factory employees, who are largely Hispanic immigrants, might be in the U.S. illegally. An American Apparel spokeswoman said that about 1,500 workers would be terminated in coming weeks.

In a letter to employees in English and Spanish, Charney said he was “deeply saddened” that the company has to shed workers who have been at the company for several years. Charney, a champion of immigration reform, promised to give the workers priority for jobs when “you are able to get your immigration papers in order.”

On July 1, Department of Homeland Security chief Janet Napolitano announced that ICE, a unit of her agency, had begun audits of 652 companies as part of a new strategy to focus immigration enforcement on employers. That number has since grown, according to ICE officials. By specifically targeting employers, the agency is reversing its tactics during the Bush administration, when it relied on high-profile raids at factories. The raids rounded up hundreds of workers but rarely resulted in penalties for the companies.

American Apparel is likely to face thousands of dollars in penalties for hiring workers who weren’t eligible to be employed. The government has said fines may exceed $800 per employee.

Full post as published by Law Blog - WSJ.com on September 04, 2009 (boomark / email).