Lawyers for American Apparel founder Dov Charney have argued successfully that former employee Irene Morales' lawsuit cannot proceed — at least temporarily. Charney's legal team convinced judge Bert Runyan that a hearing is needed to determine whether Morales is bound by an agreement she signed, in which she essentially promised never to sue the company for any reason. Until Runyan rules on that issue, her case cannot move forward.
Because the company is unusually lawsuit-prone, all American Apparel employees are now required to sign, as a condition of employment, an agreement indemnifying the company against any damages for any kind of employment dispute, and promising to enter into binding arbitration — a process that heavily favors employers over employees — rather than to sue, should that employee face sexual harassment or wrongful termination or discrimination in the workplace. (Or, apparently, should that employee face being obligated, on her 18th birthday, to perform fellatio on the C.E.O.)