American Apparel is backtracking on a new media policy that forbade employees from speaking with members of the press, after the company was accused of "silencing" workers in a complaint to the National Labor Relations Board.
Chelsea Grayson, the company's general counsel, told a group of employees on March 25 that American Apparel staff "are free to express their views to the media as they wish, including discussing their views of American Apparel," according to an email obtained by BuzzFeed News. She said that American Apparel's previous policy, implemented in January, "was intended to address media inquiries seeking the Company's position and it was not our intent to suggest that employees are limited in expressing their own views and opinions to the media." She noted that requests for comment on behalf of the company should still be referred to her or American Apparel's external spokeswoman.
American Apparel did not immediately respond to a request for comment.
The clothing chain, which has long emphasized worker rights, came under some fire for the media policy, which was implemented by the company's new board of directors this year. It added an air of secrecy to a struggling company which is still reeling from the ouster of founder and ex-CEO Dov Charney in December and contending with an overhaul directed by New York hedge fund Standard General.
The January policy, excerpted below, prohibited employees from "making statements to, or otherwise having contact with, journalists and the media, insofar as it relates to American Apparel (including among other topics as to current and former employees and as to our business and operations)." It told employees to respond to requests from the media with "no comment," adding that any exceptions required written pre-approval from Grayson or new chief executive Paula Schneider.
Employees filed a complaint with the National Labor Relations Board earlier this month, claiming that the media policy was "silencing" workers and chilling their ability to act against unsatisfactory working conditions. While nondisclosure and non-disparagement agreements are common at corporations, the employees contended that the broadness of the new policy infringed on their right to "protected concerted activity."
"The company attempted to stifle employees' free speech and prevent the media from learning about the many unfair business practice and employment issues of the new regime," Keith Fink, the lawyer for American Apparel employees on the complaint, told BuzzFeed News. "After my firm filed the NLRB complaint, a 'clarification was issued' by the GC."
American Apparel's new management is working to redirect and reshape the provocative brand while keeping Charney and employees loyal to him at bay. Last week, the company reported sales slipped 4% to $609 million in 2014 and that it's thin on cash. It will likely face a slew of litigation tied to Charney's termination, the firing of other employees and lawsuits from shareholders.
It's also cooperating with an investigation by the Securities and Exchange Commission "with respect to matters arising from the Suitability Committee's review relating to Mr. Charney," according to its annual regulatory filing. The company said it "intends to cooperate fully" with the "non-public, fact-finding inquiry."
Text from March 25 email with American Apparel's new media policy:
To clarify the above-referenced topic: American Apparel employees are free to express their views to the media as they wish, including discussing their views of American Apparel. Free speech is a core value of our Company. However, if you are asked for the Company's position on an issue, or to speak on behalf of the Company, those inquiries should be referred to Liz Cohen at Weber Shandwick or to me for the Company's response. The earlier communication to managers and supervisors was intended to address media inquiries seeking the Company's position and it was not our intent to suggest that employees are limited in expressing their own views and opinions to the media. Please relay this clarification to any current American Apparel employee to whom you relayed the original communication.
Text from initial email on American Apparel's media policy:
I hope you are all well. I wanted to briefly let you know about American Apparel's Media Policy, which has been implemented by our Board of Directors. The policy, which applies Company-wide, prohibits American Apparel employees and other personnel from making statements to, or otherwise having contact with, journalists and the media, insofar as it relates to American Apparel (including among other topics as to current and former employees and as to our business and operations). The response to all media inquiries should be "no comment," and then the inquiry should directed to Liz Cohen, at Weber Shandwick or to me. American Apparel has only two official spokespeople, Paula (copied), and Colleen Brown, the Chairman of our Board. Exceptions to this policy must be pre-approved, in writing, by Paula or by me. Many thanks for adhering to this policy, and please feel free to reach out to Paula, your department head or to me if you have questions or would like to discuss. Please also relay this policy to those current American Apparel employees who report to you.
The SEC "issued a formal order of investigation with respect to matters arising from the Suitability Committee's review relating to Mr. Charney." An earlier version of this story said American Apparel was being probed for its investigation and subsequent termination of Charney.