Andrew Rubin, Esq.

1 harassment suit against American Apparel remains in arbitration

Here in New Jersey, many businesses that face disputes are wise to handle them in mediation and arbitration rather than inside a courtroom. This is because resolving a case in court can be expensive as well as time-consuming. Of course sometimes it is necessary to go to court, but many times things can be taken care of with alternative dispute resolution.

Popular clothing retailer American Apparel has found alternative dispute resolution to be a good solution to deal with a number of employment law complaints lodged against the company and its CEO. In recent years, the company was hit with as many as seven different sexual harassment lawsuits from female staff members and models, and it has now been revealed that most of these have been handled quite successfully for the company outside of court.

The lawsuits generated much negative publicity toward the company due to the scandalous nature of the allegations. In one lawsuit, a woman claimed that she was kept as a sex slave inside the apartment of the company's CEO. Several other lawsuits pointed to unwanted sexual contact with the CEO. It now appears that most or all of these claims were unfounded.

The company's annual report states that three harassment cases have gone through an arbitration process. The company prevailed in one; it settled another but reportedly paid no financial settlement to the complainant; and the third remains in arbitration.

One case that was filed back in 2006 remains tied up in court. This is a class-action harassment case that names an American Apparel worker as a defendant.

The arbitration process appears to have worked out well for the company and many businesses and individuals do find that to be the case with alternative dispute resolution. This may not be the best solution in all cases, however, so it is always wise for defendants and plaintiffs in civil litigation to work with employment law attorneys who will protect their interests and be prepared to head to trial should it become necessary.

Source: Business Insider, "Those Sex Harassment Lawsuits Against American Apparel CEO Dov Charney Were Mostly Bogus, It Turns Out," Jim Edwards, March 12, 2013

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