american apparel dov charney lawsuit

American Apparel CEO Dov Charney. Photo: Anne Cusack/Los Angeles Times/MCT

American Apparel and CEO Dov Charney are facing a $260 million lawsuit alleging that the executive pressured a former teenage employee into performing sex acts in order to keep her job.

New York City resident Irene Morales, now 20, filed suit yesterday against the hipster retailer in Brooklyn Supreme Court, reports New York's Daily News. Morales charges that Charney, 42, invited her to his New York apartment shortly after her 18th birthday, in 2008, and that he demanded fellatio as soon as she walked in the door. He then allegedly forced her onto the bed and had her repeat the act.

The alleged nonconsensual sex continued for eight months, the lawsuit says, until Morales resigned from her job as manager of an American Apparel store in the city's Chelsea neighborhood.

According to Morales' lawyer, Eric Baum, the teen was promised job security and advancement in exchange for sex. The harassment began when she was 17, when her boss made it clear she would be expected to get sexual with him as soon as she was of legal age.

Morales says she delayed reporting the harassment and molestation because she was ashamed and traumatized. Baum tells the newspaper there could be a criminal trial in the future.

This isn't the first time Charney has been accused of sexual misconduct, but none of the past accusations has held up in court. In an interview with Inc. magazine, the sex-happy mogul says he runs his business according to nontraditional values:

"People think that because I talk about hot ass that I'm some sort of pervert," he told Inc. "Hot to me is intriguing, tastemaking. Just because my language is colloquial, people misinterpret me."

In response to Morales' lawsuit, American Apparel lawyer Peter Schey tells the Daily News that Morales "resigned with a letter of gratitude regarding her positive experience at the company."

Citing an arbitration agreement he says Morales and the company signed, Schey added that the current case "will be resolved, we believe, fully in favor of the company."

Meanwhile, check out what else the company is doing to revamp its image: