Made in the U.S.A.
Glenn Weinman, designer of legal strategy at American Apparel
Published in Corporate Counsel Edition - January 2010 magazine
By Joe Mullich on December 7, 2009
During a tour of American Apparel’s 800,000-square-foot factory in downtown Los Angeles, Glenn Weinman doesn’t hide his enthusiasm. “How often do you get to step into a real factory in Los Angeles?” he says.
Walking into the adjoining outlet store, he stops at a rack of clothes from the California Select line, vintage apparel that includes refurbished clothing from other manufacturers. He paws through the sweatshirts, making sure none were made in a foreign country and would violate American Apparel’s made-in-America, sweatshop-free policy.
“No one would hold that against us, since we didn’t make these clothes and we don’t have our name on them, but even so,” says Weinman, the company’s senior vice president, general counsel and secretary. “Probably no one cares about this stuff but me.”
That’s a good definition of general counsel—the watchdog over the stuff no one else cares about—but it’s especially true for Weinman, the self-described “old guy” (he’s 54) who’s steering American Apparel through its early stages as a publicly traded company. “There’s a lot of technical stuff to do,” he says. “A creative company tends to be less process-driven and institutional. They’re free spirits who just want to get things done and don’t think of the steps.”
Not thinking of the steps has gotten American Apparel, owner of the largest garment factory in the U.S., in some hot water—including a dispute that led to a $5 million settlement last year with Woody Allen for the unauthorized use of his image on a billboard.
The National Law Journal announced Weinman’s appointment with the headline, “Lawsuit-Mired American Apparel Hires a New GC,” referring to the several sexual harassment suits that have been leveled at CEO and founder Dov Charney, who in a statement said Weinman “will be a great fit with our fast-paced culture.”
Fast is right. In his first 12 months, Weinman had to deal with a highly publicized government crackdown on undocumented workers that forced American Apparel to terminate 1,500 employees; ongoing complaints about the racy content of the company’s ads; and the many technical aspects of going public, such as quarterly reports and annual meetings.
Weinman grew up inspired by such TV shows as Perry Mason and The Young Lawyers. His uncle was a prominent entertainment attorney who handled rock bands and managed comedian Flip Wilson. That glamour was balanced by the bottom-line view of Weinman’s father, a chief financial officer for several companies.
“I was raised looking at The Wall Street Journal and never got the bug to go into court,” he says. “Litigation is adversarial, but transactional lawyers get things done, and they have to work together even if they’re on opposite sides of a deal. If you blow the deal, the client will kill you.”
After law school at the University of Southern California and a decade in private practice, Weinman took a general counsel job at Guess, another fashion house with flamboyant founders that he saw through its initial public offering in 1996. He met one of the four founding Marciano brothers on a Monday, was called in to meet two more on Tuesday and started on Wednesday. “That’s the way they were—fast,” he says. “By the end of the week, we were negotiating with the underwriting firm” for the public offering.
It never slowed down. A week after Guess went public, Weinman, who quickly was made head of human resources in addition to general counsel, faced a union-organizing campaign.
He later became general counsel at Luminent, a fiber optic component manufacturer that he helped take public in 2000. “We made it out in November, one of the last companies to make it out before the stock market’s dramatic decline,” he says. “We made it out at $12 [a share], which was a small miracle.”
When the stock sunk to $2.50, its parent company, MRV Communications, reacquired Luminent, putting Weinman out of a job. So he launched his own business and worked at a security company before joining Bebe, another California-based fashion house.
There he faced a unique predicament when designers refused to safeguard drawings, sketches and other confidential information. As vice president of human resources, Weinman sought to solve the problem by placing a dozen shredders around the building, so a designer was never more than 100 feet from one. Despite his sending memo after memo, the designers wouldn’t use the shredders, often just throwing their paperwork on the floor. “They were young women designers and this was the way they lived,” he says. “It was like trying to get teenage kids to clean their rooms.”
He hired temporary workers to sit by the shredders and dispose of any paper that fell to the floor. “This seemed stupid because sometimes they would sit there for four hours with nothing to pick up,” he says. Eventually, he hired a service to securely dispose of the material. “You don’t need a law degree to figure something like that out, but someone has to figure it out.”
That, he finds, is often the role of a general counsel. When a news crew showed up wanting to film the American Apparel factory for a story, Weinman got the call asking what the company should do. When a repo man prowled the American Apparel parking lot, looking to tow a delinquent employee’s car, he got the call asking what to do. “If it doesn’t fall into someone’s ordinary bucket and they don’t know how to deal with it, they call me,” he says.
One of the most difficult calls came in June 2009, when the U.S. Immigration and Customs Enforcement (ICE) agency questioned whether 1,600 of the company’s employees were authorized to work in the country. “Our record keeping wasn’t as good as it should have been,” he says. “We were entrepreneurial and hired people as fast as we could.”
ICE even found errors with I-9 employment verification forms for American Apparel’s chief litigation counsel and the former chief financial officer, a Canadian. “They got us for a lot of technical violations,” Weinman says. “If I gave you a I-9 that you filled out with a stack of other documents, there’s a 50 percent chance you’d make a mistake. And the reality is we didn’t have [someone] checking every I-9 filled out by people whose first language isn’t English.”
He says the crackdown was primarily on illegal Hispanic workers taking jobs most educated Americans don’t want. “This isn’t a matter of us wanting to get cheap labor, because all of our workers make minimum wage and most make $10 to $11 an hour,” he says.
Still, the company had to release 1,500 of the 1,600 people in question, including a man in a wheelchair and a woman who was using her daughter’s ID. “You can say people should have never gone for a job they couldn’t legally have. But the fact is now they’ve been here for five or six years, have a couple of kids in school, and this job is their sole support,” he says.
A couple of dismissed people waited outside Weinman’s office to plead their case to him personally. He says that kind of informality is characteristic of American Apparel.
“Anybody can get access to Dov. Often that’s a problem from an HR standpoint,” he says. “I can discipline someone and the next thing I know I get a call from the boss asking to explain it. I don’t mind having to defend my actions. [At other companies] it would end at the HR department and the employee wouldn’t be able to get to the CEO.”
Charney is not your typical CEO; Weinman knew that going into the job. Negotiations for his position began in early 2008, but it wasn’t until months later that Charney, while driving back from a Ventura County store, called Weinman, who was tanning in the backyard of his Encino home. Weinman was concerned about his casual attire, but Charney arrived with Jonny Szymanski—a.k.a. Jonny Makeup, “American Apparel’s heiress, singer and fashion icon”—clad in his trademark short shorts and big boots.
Negotiations ran late into the evening and, with his wife’s blessing, Weinman started at American Apparel in February 2009. “I had been working at a law firm [Dongell Lawrence Finney] and had a great view of everything from my 45th-floor office, but I went into the same office every day,” he says. “I figured this would be more dynamic and it was my last chance to be a half-executive and half-lawyer.”
Within days, he was on a plane to meet with Montreal bankers about issues with the company’s credit line. The next month was a blur as he prepared for the company’s first annual meeting. “We changed auditors in the middle of this to Deloitte, and there was a disagreement over how debt was classified for accounting purposes,” he says. “This is so esoteric you don’t want me to get into it.”
The debate delayed the annual meeting until October. “We’re new at being a public company and it takes time to get the infrastructure in place for the routine issuance of reports.” Working at a creative company like American Apparel, he says, “I have to be more understanding, tolerant and patient.”
Jeffrey Cohen, an attorney with Skadden Arps who has worked with Weinman since his days at Guess, says, “Glenn has a wisdom about him. He can guide a driven, entrepreneurial personality and stand up to him if need be—which not everyone can do. He’s confident, but not overpowering and so provides a calming and reassuring influence.”
That was valuable during the headline-making Allen lawsuit, which arose after Charney put up two billboards that featured Allen in rabbi garb from Annie Hall. American Apparel insisted the ads were simply a personal statement from Charney that he’s mischaracterized by people as Allen’s character was in the movie.
“There have been a lot of cases of Dov being accused of doing wild things, generally sexual harassment,” Weinman says. “He takes the position that he’s misunderstood.”
American Apparel initially couldn’t reach a settlement with Allen. During mock trials, some jurors started talking numbers that scared the company—up to $10 million. So the insurance company agreed to pay $4.25 million, with American Apparel kicking in $750,000.
“We didn’t use the billboard because we wanted Woody Allen’s image,” Weinman says. “Our demographic of 21-to-32-year-olds don’t know Woody Allen. Ask my daughter and she’d be vaguely aware he was a movie person, but she wouldn’t buy a product because he endorsed it.”
During a December 2008 deposition, Allen called American Apparel’s advertising “sleazy” and “infantile.” As general counsel, Weinman deals with ongoing complaints of the sexual content of ads, just as he did at Guess. In one instance, an American Apparel ad on the back of a magazine inflamed some people who thought the model was underage. She was 23.
Sitting in his office, Weinman logs onto the Internet to critique the ads on the company’s Web site, saying which ones he personally thinks reveal a little too much skin. “I don’t see that we need sexy-looking models to sell sexy clothes,” he says. “But I am one of the more conservative people here.”
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