John Stossel

Dov Charney is a fast-talking 36-year-old entrepreneur whose company has a loose, sexy atmosphere. As you might guess, some former workers have sued him for sexual harassment.

Charney pays his 4,000 employees, mostly immigrants, an average $12.75 an hour, plus subsidized lunches, health care, and free English classes.

He calls his company, American Apparel, "an industrial revolution" because everything happens in Los Angeles: knitting the fabric, cutting the patterns, turning them into finished products. He says, "It is less expensive for me, the way we do business, to manufacture here in the United States."

How can that be? Most of America's clothing business makes its clothes offshore. "Well," he says, "there is a high cost to going offshore. If you're working with a supplier in China you've gotta work months in advance. If you're working with your own factory, you could wake up one morning and say, hey, let's make 10,000 tank tops today."

Charney's ideas are working. This year, he says, total sales should be $200 million, and he hopes to open another 30 stores in the next few months.

Some say one reason for his success is that he has made the company a casual, open, even sexy place to work. He decorates some stores with covers from sex magazines, uses sexual language at work, and doesn't mind if his employees do, too.

Charney feels free to engage in sexual relationships with staff members. "If it's a truly consensual loving relationship," he says, "there's nothing wrong with it. I think that those relationships can be very healthy and are very much part of living in a free world."

But in today's highly policed workplace, that belief brought Charney trouble. Three women who used to work for him sued, claiming he created a "hostile environment." The plaintiffs say they were made to feel unwelcome, and Charney is accused of dropping his pants and revealing his underwear.

Charney told me, "I've never had any intimate intentions with these women. I never propositioned them in any way. All of these allegations are false."

I asked him about showing his underwear: "Well, I think for a designer to be in his underwear when he's designing underwear is quite common."

Women who still work for Charney don't see a problem. One told me, "You see the company, you see the posters on the walls. I think that he was always honest about who he is. And for someone to come and say, 'Oh, I didn't know, and I'm surprised,' I don't think it's fair."

Charney adds, "There is a sexual element to fashion that is inescapable. So like, to then start saying, ah, let's get scared about sex. You know, we can't mention the word sex in the workplace, I mean, it just doesn't add up. It's not right."

John Stossel

John Stossel is host of "Stossel" on the Fox Business Network. He's the author of "No They Can't: Why Government Fails, but Individuals Succeed." To find out more about John Stossel, visit his site at > To read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at ©Creators Syndicate