AMERICAN APPARELHUMAN RESOURCE POLICY AND CASE STUDY

American Apparel is an American clothing brand that produces Men, Women, Kids clothes and accessories. They are one clothing brand who are very strict about their human resource policy. Most of the clothing manufacturers process their garments in developing countries in sweat-shop type environments, where, the workers are over-worked and under-paid. However, this is not the case with American Apparels. The manufacture the garments in USA itself, with humane working conditions and fair wages. Their HR policies and functioning are below: Garment Workers Are Paid Up To 50 Times More Than The Competition A garment worker in Bangladesh earns an average of $600 a year. An experienced American Apparel garment worker can earn $30,000+ and receive benets such as comprehensive health care. American Apparel garments are created by motivated and fairly-paid employees who don't just have jobs - they have careers. Their culture recognizes outstanding performance and promotes from within. Most importantly, their workers have a voice and inuence the direction of the company. At American Apparel they call it Sweatshop-Free, a term they coined in 2002. Unlike Their Competitors, They Make Their Own Product The American Apparel factory is the largest sewing facility in North America. They believe that integrating their manufacturing, distribution and creative processes keeps their company more efcient than those who rely on offshore or onshore sub-contracting. By leveraging art, design, and technology at their Downtown LA campus, they are able to pay garment workers fairly AND sell garments protably so they can sustain their business and grow. Everyone benets - customers, workers, and shareholders alike. The New Standard That Others Will Follow There is clearly much more overhead, capital investment and training involved in manufacturing in the USA, as some critics point out. But as American Apparels sales increase towards the billiondollar mark over the next few years, they are condent they'll prove that vertical integration is a viable business model that can work even better than the status quo model of continuous outsourcing. Its not just about made in the USA. More importantly, it is about designing a business that does not, at its fundamental core, rely on the relentless pursuit of low cost labor to survive. As wages and transportation costs increase worldwide, they believe their business model of vertical integration to be the path of least resistance. For the record, American Apparel supports free and fair trade, and almost half of the company's 250 stores are outside the USA, allowing the company to export hundreds of millions of dollars of US-made apparel annually. Environmental Commitment American Apparel is also committed to sustainability. They've set the precedent for sustainable and ethical manufacturing in Californiathe state with the strictest and most progressive EPA standards in the country. By concentrating their entire operation within a few square miles, American Apparel has a smaller carbon footprint than their competitors. They recycle almost all their manufacturing waste (over 150 semi truck loads per year) and as of 2012 they are virtually landll-free. Their solar panels offset as much as 20% of their electrical usage, and they ship the majority of their goods to their worldwide stores via excess space on passenger ights and busses, minimizing their environmental impact.

Investing In The Future Manufacturing in America requires risk taking and long-term investment. They think it's worth it. The apparel industry's reliance on low wages cannot be sustained over time, ethically or scally. As labor and transportation costs increase worldwide, exploitation will not only be morally offensive, it will not even be nancially viable. For them, American manufacturing is not a trend - they've been doing it since the day their company began in Los Angeles fteen years ago. They are extremely proud of their model, which provides thousands of good jobs both domestically and internationally. American Apparel's current head count is 6,000 in Los Angeles, with an additional 5,000 working at their stores worldwide.

The Workers Clothing manufacturing is a very tough job, but they have always tried to do things differently. In the early days they talked about "sweatshop-free". Though now they talk less, they still continue to provide the same benefits (and more) to our workers. For them "sweatshop-free" was never about criticizing other business models; it was about attempting something new. It comes down to this: not blindly outsourcing, but rather knowing the faces of our workers and providing them the opportunity to make a fair wage. The average sewer with experience at American Apparel is making about $25,000/yr, or $12 an hour, almost twice the federal minimum. This can be higher in some cases. They also offer parking, subsidized public transport, subsidized lunches, free onsite massages, a bike lending program, a program of paid days off, ESL classes and much more. Most importantly they guarantee job security and full-time employment; this is an anomaly in the garment industry, which has historically been dominated by seasonal work. They also continue to provide all of our employees and their families with company-subsidized, affordable health insurance ($8/week, $1-3/week for children). And they just made everyone's lives a little easier by opening an onsite medical clinic. This facility, which is the first of its kind, offers primary care services along with pediatric, urgent and preventative health care. As their company continues to grow, they will further improve the work environment. Now a public company, they're very excited about introducing an unprecedented stock program that will make our garment workers shareholders.

AMERICAN APPAREL IS PROUD TO HAVE A SWEAT-SHOP FREE HUMAN RESOURCE POLICY. THE BELOW IS THE POLICY DECLARED BY THE CEO OF THE COMPANY.

ISSUES FACED BY AMERICAN APPAREL

Dov Charney built a fashion empire around hipster chic and a louche lifestyle that embraced pornography and lascivious advertising. Now the founder and chief executive of American Apparel sees both his life and his work crumbling around him in the form of a devastating sexual harassment suit by a former employee. The legal action launched by Irene Morales, a former manager of one of American Apparel's branches in New York City, alleges that Charney conducted a campaign of "extreme psychological abuse and torment" from the time she started working as a shop assistant at the age of 17 in 2007, while still a school student. Morales says Charney began by making explicit advances and that shortly after her 18th birthday he invited her to his apartment in New York City. "She was, to all intents and purposes, held prisoner in his apartment for several hours and forced to perform additional sex acts upon defendant Charney," Morales's lawyers claim in court documents. The suit also alleges repeated instances of sexual harassment over an eight-month period until Morales resigned from the company, becoming "emotionally traumatised" and suffering a breakdown as a result, according to her lawyer, Eric Baum. Responding to the lawsuit filed in the Brooklyn supreme court and claiming $260m in damages American Apparel said in a statement the company would be taking legal action against Morales and her lawyers for breaching a severance agreement she had signed on leaving the company. "Upon her resignation, [Morales] acknowledged in writing that she had no pending claims against the company and signed a severance agreement which included a full release of claims and an agreement to submit any future claims to confidential binding arbitration," the statement said. "All American Apparel's employees are subject to the same confidential arbitration agreement signed by [Morales] in order to protect the privacy interests of employees and former employees, and to prevent predatory plaintiffs and their attorneys from attempting to use the media to extort the company. Such an arbitration process was initiated by the company against [Morales] several weeks ago." Charney himself has not commented on the charges. But the 42-year-old has publicly dismissed previous claims of harassment as "sexual shame tactics". Morales told the New York Daily News that she was "devastated" by her treatment at the hands of Charney, with her lawyer explaining to the newspaper why she didn't resign earlier: "She was young. She needed the job." The lawsuit comes at a bad time for both Charney and the fashion chain he launched in 1989 and has seen grow into one of the US's largest domestic clothing manufacturers. After expanding rapidly in the boom years last decade, American Apparel's sales and share price plunged recently as changing fashion trends and the economic downturn meant that consumers were less likely to pay $30 for a plain T-shirt.

Charney has long defended risque advertising and a promiscuous lifestyle, with both his design aesthetic and his sexual mores harking back to the California of the mid-1970s. His past antics included engaging in indecent acts with an employee in front of a journalist and appearing in his underwear with two women in an ad headlined "In bed with the boss". Update: Responding to the American Apparel statement, Morales's lawyer Eric Baum, said: "Instead of responding to the very serious charges that have been made against the company, its CEO and board of directors, American Apparel is instead trying to shift the focus of this case by making irresponsible allegations against the victim's attorneys. "We believe the arbitration agreement they point to is improper and unenforceable and designed only to silence Ms Morales. We strongly believe this case should be heard by a jury."

CONCLUSION: In my opinion, this matter should get the complete attention of the human resources department. Since this matter involves the CEO of the company it is bound to get hyped in the media. The companys HR principles are so supportive of employees and their core value is to look after the well-being of the employees unlike other apparel companies. Thus such an incident comes as a shock. If the employees get such a bad example from the senior most person in the organization, they will not be encouraged to follow the policies of the company. Since the CEO has such a lawsuit filed against it, it harms the image of the company. The HR department of the company should temporarily replace the CEO as firing him is not an option. In this case, the options with HR are very limited as he is the owner of the company. However, the HR department should ensure that no other employee should follow in the tracks and if he commits such offences, he should be punished in the strictest manner.