American Apparel Inc. responded Wednesday to a former employee's wrongful-termination lawsuit -- the latest legal trouble for the seller of trendy cotton clothing.
Roberto Hernandez sued the Los Angeles company and its chief executive, Dov Charney, in Los Angeles County Superior Court last week. The lawsuit alleges he was fired a week after he refused to pad the company's balance sheet to make the company more attractive to potential investors.
Hernandez's lawyers said he worked in accounts payable and the information-technology department. The company disputed that he was an accountant, among other things.
"The allegations in this lawsuit are fictional, which the company believes represents a cynical attempt to extract phony leverage by Mr. Hernandez's counsel, Keith Fink, who has been engaged with the company in other litigation for over three years," the company argued in its statement.
Fink also represents a client in a separate sexual harassment lawsuit, one of several that have been filed against the company.
The apparel retailer said Hernandez was fired for legitimate reasons.
"The best they can come up with was 'legitimate reasons,' " Fink said. "I don't think it takes a rocket scientist -- is it tardiness, is it insubordination -- if they had a single reason, they would've told you that."
On Tuesday, the company reported that its third-quarter profit fell 61% as it spent $13.2 million on stock-based compensation, but it reaffirmed its full-year profit estimate. Revenue rose 45%, and sales in stores open at least one year rose 24%.