i Keith A. Pink; Bar No. 146841 Sarah E. Hernandez, Bar No. 206305 Jennifer H. Yeungkaar No. 280819 PINK STEINBERG Rip O3 7 Attorneys at Law - 11500 Olympic Boulevard, Suite 316 90 0 Los Angeles, California 90064 Telephone: (310} 268-0780 Facsiiniie: (310) 268-0790 5m.? WMWW Attorneys for Plaintiff 61.; 3? DAVID ISENBAUM SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES - CENTRAL DISTRICT DAVID NISENBAUM, an individual, Plaintiff, V. AMERICAN APPAREL, INC, a Delaware corporation; AMERICAN APPAREL RETAIL, INC, 21 Caiifomia corporation; AMERICAN APPAREL (USA), LLC, a California limited liability company; AMERICAN APPAREL MANUFACTURING, INC., a California corporation, AMERICAN APPAREL GROUP, 21 Delaware corporation; AMERICAN APPAREL CORPORATION, a Delaware corporation; and DOES to 100. inclusive, Defendants. Plaintiff DAVID NISENBAUM hereby alleges as follows: Case No. 8057934 2 COMPLAINT FOR DAMAGES FOR: 1. VIOLATION OF GOVERNMENT CODE 12900, et seq. [Discrimination Based On Religion} 2. VIOLATION OF GOVERNMENT CODE 1294000 [Failure to Prevent Discrimination] 3. VIOLATION OF GOVERNMENT CODE l2940(h) [Retaliation] 4. WRONGFUL TERMINATION IN VIOLATION OF PUBLIC POLICY .own 7. INTENTIONAL INFLICTION OF EMOTIONAL DIRESS a. VIOLATION OF BUSINESS PROFESSIONS CODE 17200, et seg. all times relevant hereto was. a resident of the County of Los Angeles, State of California. TRIAL If! a a Pi VENUE AND PARTIES at: a 1. Plaintiff DAVID NISENBAUM and/or a: . RFRE a: - i. .. 'i VIOLATION OF LABOR CODE 1102.5 VIOLATION OF LABOR CODE 1198.5 5# I q, COMPLAINT FOR DAMAGES =ej3o?e37 Q. :1 10 El 2. PLAINTIFF is informed and believes, and thereon alleges that Defendant AMERICAN APPAREL, INC. andlor is, and at all times relevant: hereto was, a Delaware corporation doing substantial business in the County of Los Angeles, State of California. PLAINTIFF is informed and believes, and thereon alleges that Defendant AMERICAN APPAREL RETAIL, INC. andfor is, and at all times relevant hereto was, a California corporation, doing substantial business in the County of Los Angeles, State of California, 4. PLAINTIFF is informed and believes, and thereon alleges that Defendant AMERICAN APPAREL (USA), LLC andJor is, and at ail times relevant hereto was, a California limited liability company, doing substantial business in the County of Los Angeies, State of California. 5. PLAINTIFF is informed and believes, and thereon alleges that Defendant AMERICAN APPAREL MANUFACTURING, INC. and/or is, and at ail times relevant hereto was, a California corporation, doing substantial business in the County of Los .Angeles, State of California. 6. PLAINTIFF is informed and believes, and thereon alleges that Defendant AMERICAN APPAREL GROUP anti/or is, and at all times relevant hereto was, a Deiaware corporation, doing substantial business in the County of Los Angeles, State of Caiifornia. . 7. PLAINTIFF is informed and beiieves, and thereon alleges that Defendant AMERICAN APPAREL CORPORATION and/or is, and at all times relevant hereto was, a Delaware corporation, doing substantial business in the County of Los Angeles, State of California. 8. PLAINTIFF is informed and believes, and thereon alleges that AMERICAN APPAREL, INC, AMERICAN APPAREL RETAIL, INC, AMERICAN APPAREL (USA), LLC, AMERICAN APPAREL MANUFACTURING, INC, AMERICAN APPAREL GROUP, and AMERICAN APPAREL CORPORATION were joint employers of PLAINTIFF. AMERICAN APPAREL, INC, - 2 COMPLAINT FOR DAMAGES AMERICAN APPAREL RETAIL, INC, AMERICAN APPAREL (USA), LLC, AMERICAN APPAREL MANUFACTURING, INC, AMERICAN APPAREL GROUP, and AMERICAN APPAREL CORPORATION hired employees jointly, including PLAINTIFF, controlled PLAINTIFFS and other employees work assignments, and paid and other employees? wages. Therefore, these entities were at all times joint employers of PLAINTIFF. 9. PLAINTIFF is unaware of the true names and capacities, whether individual, corporate, associated or otherwise, of Defendants DOES I through 50 and/or inclusive, and therefore sues said Does by such fictitious names. PLAINTIFF will seek leave of Court to amend this Complaint to show the true names and capacities of such DOES when the same has been ascertained. PLAINTIFF is informed, believes, and thereon alleges that each of the fictitioust named Defendants are responsible to PLAINTIFF for the injuries suffered and alieged herein, or are subject to the jurisdiction of the Court as a necessary party for the relief herein requested. IO. PLAINTIFF is informed and believes and thereon alleges that AMERICAN APPAREL, INC, AMERICAN APPAREL RETAIL, INC, AMERICAN APPAREL (USA), LLC, AMERICAN APPAREL MANUFACTURING, INC, AMERICAN APPAREL GROUP, and AMERICAN APPAREL CORPORATION are alter~egos of one another because there is such a unity of interest and ownership that their separate corporate personalities are merged so that one corporation-is a mere adjunct of another and the companies form a single enterprise. PLAINTIFF further alleges that AMERICAN APPAREL, INC, AMERICAN APPAREL RETAIL, INC, AMERICAN APPAREL (USA), LLC, AMERICAN APPAREL MANUFACTURING, INC, AMERICAN APPAREL GROUP, and AMERICAN APPAREL CORPORATION commingled their funds and other assets, failed to segregate the funds of the separate entities, aIIowed the diversion of corporate funds or assets to non-corporate uses, faiied to maintain corporate minutes, failed to maintain adequate corporate records, failed to adhere to corporate formalities, failed to conduct transactions by and between one another at arm?s length, used the same offices and/or business locations, employed the same or largely the same employees, and/'01? faiied to adequately capitalize some or ali of the corporations. 1 1. PLAINTIFF is informed, believes, and thereon alleges that each DEFENDANT and DOE is now, and was at all times mentioned herein, the agent, principal, partner, officer, joint venturer, 3 COMPLAINT FOR DAMAGES was 27 28 employee or alter ego of the remaining DEFENDANTS and DOES, and that all of the acts and conduct alleged herein were performed within the course and scope and in the furtherance of such agency, partnership, joint: venture, employment or alter ego relationship. 12. Venue is properly laid in this Court in that the claims and injuries occurred in the County of Los Angeles. GENERAL ALLEGATIONS 13. MR. NISENBAUM re~alleges and incorporates herein by reference, as though set forth in full, each and every allegation contained in Paragraphs 1 through 12, inclusive 14. On or about November 1, 2012, MR. NISENBAUM was hired by AMERICAN APPAREL as Director of Manufacturing Accounting Analysis and Audit. Having over 20 years of experience working as a CEO and C00 and having extensive apparel manufacturing and retail apparel experience specifically in the finance department, MR. ISENBAUM was hired to help upgrade the accounting and finance department. In the first years of his service, there was an awareness within AMERICAN APPAREL that CFO John Luttrell?) lacked the fortitude, desire, and stamina to bring financial systems to a place where they would be considered at ?best practices?. Whereas there was a frequent call to remove Mr. Luttrell by CEO Dov Chamey (?Mn Charney?), Mr. Luttrell had support from AMERICAN Board of Directors (?Board?). 15. As a result upon his hiring, MR. NESENB AUM became intensely involved in a mission to clean up and tighten up financial controls at AMERICAN APPAREL in an effort to improve the company?s profitability and accounting controls for the benefit of all shareholders. MR. NISENBAUM worked tirelessly to bring AMERICAN APPAREL to a higher level from both a cost-saving and process point of view. 16. Under the supervision of CEO Mr. Chamey, MR. NISENBAUM made major advancements in reducing costs in the following areas, including but not limited to: - Freight cost mitigation by controlling freight classifications with vendors, and controlling freight density issues to ensure minimization of freight costs; - Negotiation of new or existing contracts with vendors for more favorable terms specifically in the area of freight, packaging, store lighting, fuel and truck leasing; 4 COMPLAINT FOR DAMAGES :22 23.523 27 23 l7. Complete review and contract negotiation of telephone, electricity, gas, garbage collection billings at stores and manufacturing facilities; Customer freight billing optimization to avoid the under billing of freight charges invoiced to customers; Identification of expense category mis~classifications allowing for better tracking of expenses; and Negotiation and implementation of Metro BTAP bus pass program to significantly reduce transportation costs for employees and mitigate company-wide parking lot crisis. As MR. NISENBAUM continued to produce results that were saving AMERICAN APPAREL millions of dollars on an annual basis, tension from CFO Mr. Luttrell to MR. NISENBAUM escalated. This was a result of MR. NISENBAUM continually discovering and unearthing embarrassing deficiencies that put Mr. Luttrell in a bad light. For example, MR. NISENBAUM discovered the following: In or around April 2013, Mr. Luttrell mismanaged the execution of a bond financing and therefore endangered the company?s financial position. Whereas Mr. Luttrell had promised the bond financing would be $220 million, the bond ended up funding at under $200 million. Additionally, interest rates and other economic terms of the bond were inferior to what Mr. Luttrell had promised. MR. NISENBAUM discovered that Mr. Luttrell failed to disclose the specific terms and conditions of the bond to both CEO Mr. Chamey and the Board. Mr. Characy and the Board were not made aware of the bond until after the terms of the bond were entered into. Mr. Luttreil also concealed from CEO Mr. Chamey, the Board, and AMERICAN general counsel that he had secretly agreed to pay one particular investor a $1.5 million promotion fee after the bond had been funded. Mr. Luttrell eventually admitted that during the course of the bond financing, he did not uphold his duty of loyalty to AMERICAN APPAREL and was instead more loyal to the investment banker arranging the bond, calling his actions the ?biggest mistake of his career?; and 5 COMPLAINT FOR DAMAGES 10 ll 326 27 28 18. From early 2012 to the end of 2013, Mr. Luttrell embarked on a distribution center project against the recommendation of CEO Mr. Chamey. Mr. Chamey opposed this project from the outset stating to Mr. Luttrell that the timing to invest in a distribution center during a time when the company?s capital structure was so fragile was a poor decision and that the distribution center should have been. built in the downtown Los Angelcs area rather than in La. Mirada, California. MR. NISENBAUM predicted and warned the project could lose substantial millions of dollars beyond those budgeted. MR. warnings and advice were thwarted by Mr. Luttrell. Mr. Luttrell single- handedly managed this distribution center project and refused to listen to the warnings and advice from MR. NISENBAUM or Mr. Charney. MR. NISENBAUM shortly later discovered that the project resulted in $3040 million of direct and indirect losses combined, drained cash resources, and exceeded budgeted transition costs. This distribution center project grew out of hand so much so that the Board became concerned the company could become insolvent and would need to file bankruptcy if the distribution center continued to be mismanaged by Mr. Luttrell. As a result, MR. NISENBAUM and Mr. Charney were forced to intervene and expended countless hours over a period of one hundred days to stabilize the distribution center and turn it around. As a result of the deficiencies caused by Mr. Luttrell?s mismanagement of the bond and distribution center, beginning in or around February 2014, MR. NISENBAUM and CEO Mr. Chamey?s cost and internal control efforts intensified. MR. NISENBAUM began reviewing and auditing all cornpanywwide disbursements to find additional cost saving opportunities and to implement. cost saving strategies. During the audits, MR. NISENBAUM discovered the following: The company?s new billing system was failing to capture freight charges, costing the company hundreds of thousands of dollars; Three embezzlement rings involving several hundred thousand dollars of vendor kickbacks; and At least one consultant was receiving payments for no services rendered. 6 COMPLAINT FOR DAMAGES MR. NISENBAUM was able to: 19. Renegotiate a contract with the conference call provider, saving the company over two hundred thousand dollars per year; LED lighting initiative utilizing a contracted vendor to capture significant available governmental subsidies and rebate incentives reducing the cost from approximately forty dollars per bulb to approximately eight dollars per bulb on thousands of bulbs stiil needing retrofitting; Lower the cost of garbage collection services at the store and factory level saving the company hundreds of thousands of doilars per year; Completely rte-negotiate and realign the company cell phone and landline telephone bills, saving the company hundreds of thousands of dollars per year; Examine currency exchange programs that could have saved the company millions of dollars as the US doliar was repositioned in the iatter half of 2014; Realign distribution strategy and vendors used, resulting in faster deliveries at lower costs, saving the company several million dollars per year; I Partner with the textile procurement departments, to help improve the company?s ability to boy yarn at the lowest prevailing price, which if continuously implemented, eculd save the company millions of dollars; and Facilitate the hiring of new management at the textile dying plants, allowing for the reduction of fabric processing, dye and chemical costs and energy use. Throughout his tenure with DEFENDANTS, MR. job performance was stellar, such that MR. NISENBAUM saved AMERICAN APPAREL millions of dollars to the benefit of AMERICAN APPAREL and all its sharehoiders. MR. skiliful and exhaustive fiscal management Was unprecedented at AMERICAN APPAREL. 20. 21. MR. NISENBAUM is of Jewish faith, and thus falls within the protected category of Government Code On or about June 18, 2014, MR. NISENBAUM was informed by a co-worker that Mr. Luttrell had been making derogatory statements about MR. religious affiliation. It was 7 COMPLAINT FOR DAMAGES as 27 as no secretthat MR. NISENBAUM was Jewish because he wore religious clothing and a kippah. 22. Throughout MR. employment, Mr. Luttrell continuously directed aggression and hostility toward him, but he had not fully understood why. Until he was informed of the derogatory comments, MR. NISENBAUM only had an intuitive feeling that Mr. Luttrell?s visceral hatred of him was motivated by MR. religious affiliation. 23. For example, in or around January 2014, Mr. Luttrell stormed into MR. NISENB office with a false accusation. against MR. NISENBAUM. In this exchange, Mr. Luttrell exclaimed, ?All you do is lie. You are a dirty liar and I am going to get you!? Mr. Luttrell even verbally ordered MR. NISENBAUM to stay away from him. Mr. Luttrell would also sneer at MR. NISENBAUM every time he walked in front of him. On multiple occasions, when walking behind MR. NISENBAUM, Mr. Luttrell would make mocking gestures, pretending that MR. NISENBAUM smelled bad. 24. In the evening on or about June 18, 2014, MR. complained to acqueline Madrigal (?Ms Madrigal?), the Director of Human Resources and Benefits. in his correspondence, MR. NISENBAUM complained to AMERICAN APPAREL about the discrimination by Mr. Luttrell and that he feared he was being targeted because of his religion. Nothing happened for the next four days. 25. On or about June 23, 2014, MR. NISENBAUM lodged through AMERICAN APPARELS system a complaint to the Board regarding accounting and disclosure issues in violation of Sarbanes Oxley. MR. NISENBAUM indicated that it was critical that he speak. with members of the Board in connection with certain accounting and finance issues that the company was faced with as a result of the removal of CEO Mr. Chamey and elevation of Mr. Luttrell as interim CEO. MR. NISENBAUM had planned to explain to the Board that Mr. Luttrell was not competent as a CFO, was putting the company at risk. as interim CEO, and could not simultaneously act in both capacities. Specifically, MR. NISENBAUM complained that in the absence of checks and balances that were implemented by CEO Mr. Chamey, there was no accountability for Mr. Luttrell?s actions. MR. NISENBAUM complained that this created numerous accounting inconsistencies, and resulted in a rapid deterioration of internal controls as well as untimely reporting of significant events constituting fraud on the investing pubiic. MR. NISENBAUM also complained that Mr. Luttrell failed to timely and accurately disclose his mistakes to shareholders, including but not limited to: misleading shareholders 8 COMPLAINT FOR DAMAGES 0 regarding the distribution center project in La Mirada, California, telling shareholders that the project was on track .from both a timing and financial point of view but in actuality was exceeding its budget by $10 million and resulting in losses in excess of $30 million. MR. NISENBAUM also complained that Mr. Luttrell failed to disclose a $4.4 million customs overpayment problem in Germany that resulted from his poor management and that Mr. Luttrell issued inaccurate quarterly reports to shareholders regarding his mistake. The $4.4 million customs mistake would not have occurred if the proper paperwork had been filed. 26. The nex'ltkday on or about June 24, 20M, MR. NISENBAUM was called into a meeting with two attorneys for AMERICAN APPAREL to discuss his discrimination complaint to Ms. Madrigal. The attorneys ?claimed? that they were investigating his complaint about the religious discrimination. The attorneys justified Mr. Luttrell?s illegal behavior and told MR. NISENBAUM that he was mistaken about Mr. Luttreli?s motives. The attorneys told MR. NISENBAUM that his complaint for discrimination on the basis of his religion was baseless. At the conclusion of the meeting. MR. NISENBAUM was given a termination letter and was told it was his last day at AMERICAN APPAREL. A true and correct copy of the termination letter is attached hereto as Exhibit. A. 27. MR. NISENB AUM was terminated in retaliation for complaints of discrimination due to his religious beliefs andlor for his complaints of accounting and cost control issues and his efforts to bring the company to a position of improved compliance with Sarbanes Oxley and improved profitability which shed light on Mr. Luttreli?s deficiencies. 28. MR. NISENBAUM is also informed and believes that CEO Mr. Chamey was similarly fired because Mr. Luttrell wanted to sell AMERICAN APPAREL such that he could retire and cover up his violations of Sarbanes Oxley and fraud in running a publicly traded company. Following Mr. Luttrell?s mismanagement of the distribution center project in La Mirada. California, Mr. Chamey called for Mr. Luttrell?s removal, which the Board ignored. However, as early as February 14, 201.4, Mr. Luttrell had schemed to remove Mr. Chamey from his position as CEO of AMERICAN APPAREL. On February 14, 2014, Mr. Luttrell wrote in a memorandum prepared fora secret presentation to the audit committee lead that the solution for AMERICAN financial was to ?[rlemove' CEO and replace with an interim replacement. Put the Company up for sale. Engage Peter Solomon.? 9 COMPLAINT FOR DAMAGES 1.20 22:21 2213123 :24 27 23 Mr. Luttrell then proceeded to dilute Mr. Chamey?s ownership in the company rather than engage in more debt and equity financing to resolve the deficiencies he created, and eventually completed his scheme by firing Mr. Chamey on June 18, 2014. 29. MR. NISENBAUM timely ?led administrative complaints with the Department of Fair Employment and Housing against the named DEFENDANTS and received corresponding right to sue letters. Therefore, MR. NISENBAUM has exhausted his administrative remedies. 30. On or about February 19, 2015, MR. NISENBAUM requested his personnel file. Several weeks later, AMERICAN APPAREL produced MR. personnel file, but it was incomplete. Teilingly all documents relative to MR. June 18, 2014, religious discrimination complaint and June 23, 201.4, Sarbanes Oxiey complaint were removed from his personnel file. Plaintiff is informed and believes that AMERICAN APPAREL now has a practice of sanitizing illegally fired employees by stuffing personnel files with backdated memorandum that the employees were never shown while working at AMERICAN APPAREL and removing select documents from fiies that demonstrate iliegal practices by the company. FIRST CAUSE OF ACTION VIOLATION OF GOVERNMENT CODE 12900, 5233231; [Discrimination Based On Religion] (Against All DEFENDANTS and DOES to 100) 3 l. MR. NISENBAUM re-alleges and incorporates herein by reference, as though set forth in foil, each and every allegation contained in Paragraphs 1. through 30, inclusive. 32. This cause of action is brought pursuant to Government Code 12900, M, which prohibits discrimination in employment on the basis of religion. 33. MR. NISENBAUM is of iewish faith, and thus falls within the protected category of Government Code 34. The decision to terminate MR. NESENBAUM because he is Jewish, and thereby deprive him of substantial employment benefits guaranteed by state law, was motivated by the forbidden criteria of religious discrimination. I #1 l0 COMPLAINT FOR DAMAGES Is.) 35. There was no professional or business justification for the termination of MR. NISENBAUM and the stated reasons were pretextual for the true reasons and motivations, to wit: religious discrimination. 36. MR. NISENBAUM is informed and believes that his position and job duties and responsibilities were offered to and bestowed upon various less qualified non-Jewish individuals subsequent to his employment with DEFENDANTS. 37. At all material points described herein, MR. NISENBAUM was treated differently than similarly situated employees and/or otherwise was Subjected to unlawful discriminatory and/or retaliatory employment practices as prohibited by the laws of California. DEFENDANTS, in engaging in the aforementioned conduct, intended to discriminate against MR. NISENBAUM on the basis of his religion. 38. The conduct, statements, and acts described herein were an ongoing part of a continuing scheme and course of conduct. DEFENDANTS knew the substance of the above?described facts and circumstances and ratified the wrongs and injuries mentioned herein when it was their ability to prevent, remedy and/or correct these wrongs. 39. DEFENDANTS have continued to ratify and have refused to remedy or correct the aforementioned conduct during and since MR. employment, notwithstanding the fact that they knew or reasonabiy should have known of the conduct and its unlawfulness. 40. The California legislature has established a policy against employment discrimination based on religion in its adoption of Government Code 12900, and in violation of the announced policy of this State against such practices. - 41. As a direct and proximate result of the aforementioned violations of Statute and public policy, MR. NISENBAUM has suffered and will continue to suffer: a. A substantiai reduction in past and current income, and future income potential in sums as may be shownaccording to proof; b. A substantiai injury and damage to his occupation and professional reputation in a sum as may be shown according to proof; c. A substantial reduction in loss of work-related benefits; and i .l COMPLAINT FOR DAMAGES mum-mmcuww?s my gmlgi2} :23 3124 a 28 0 d. Extreme humiliation, embarrassment, depression, sleeplessness, emotional pain, suffering, mental anguish, emotional distress which culminated in physical injury and bodily injury, inconvenience, loss of enjoyment of life, and other losses from the date of said acts all to MR. damage in a sum as may be shown according to proof. 42. The amount of MR. damages is not presently known but he will seek leave of Court to amend this Complaint when the exact amount of such damages has been ascertained or will prove the same at trial. 43. The above-recited actions of DEFENDANTS were done with malice, fraud, or oppression, and reckless disregard of MR. rights. DEFENDANTS engaged in offensive conduct despite their awareness of the effect on MR. NISENBAUM. As a result of these and other actions, MR. is entitled to an award of punitive damages. 44. In addition, as a proximate result of the wrongful conduct of DEFENDANTS, MR. NISENBAUM is entitled to attorneys? fees and prejudgment interest. 45. Pursuant to California Government Code MR. NISENBAUM requests the award of attorneys? fees against DEFENDANTS under this cause of action. SECOND CAUSE OF ACTION VIOLATION OF GOVERNMENT CODE 12940(k) [Failure to Prevent Discrimination] (Against All DEFENDANTS and DOES I to 100) 46. MR. NISENBAUM re-alleges and incorporates herein by reference, as though set forth in full, each and every allegation contained in Paragraphs 1 through 45, inclusive. 47. At all times herein mentioned, Government Code 1294000 was in full force and effect and binding on DEFENDANT S. Government Code 1294000 requires DEFENDANTS to take all reasonable steps necessary to prevent discrimination. As alieged above, DEFENDANTS violated this statutory provision. 48. DEFENDANTS knew or should have known of the unlawful conduct undertaken by it against MR. NISENBAU M, and failed to take reasonable steps to remedy such conductor provide MR. ISENBAUM with a workplace free from discrimination and retaliation. l2 COMPLAINT FOR DAMAGES as r. engag- pun 49. As a? direct and proximate result of the aforementioned violations of statute and public policy, MR. NISENBAUM has suffered and will continue to suffer: a. A substantial reduction in future income potential in sums as may be shown according to proof; b. A substantial injury and damage to his occupation and professional reputation in a sum as maybe shown according to proof; (2. A substantial reduction in ioss of work-related benefits; and d. Extreme humiliation, embarrassment, depression, sleeplessness, emotional pain, emotional distress which culminated in physical injury and bodily injury, suffering, mental anguish, inconvenience, loss of enjoyment of life, and other losses from the date of said acts all to MR. NISENB damage in a sum as may be shown according to proof. 50. The amount of MR. damages is not presently known but he wiil seek leave of Court to amend this Complaint when the exact amount of such damages has been ascertained or will prove the same at trial. 51. The above-recited actions of DEFENDANTS were done with malice, fraud, or Oppression, and reckless disregard of MR. rights. DEFENDANTS engaged in their offensive conduct despite their awareness of the effect on MR. NISENBAUM. As a result of these and Other actions, MR. is entitled to an award of punitive damages. 52. In addition, as a proximate result of the wrongful conduct of DEFENDANTS, MR. is entitled to attorneys? fees and prejudgrnent interest. 53. Pursuant to California Government Code MR. ISENBAUM requeSts the award of attorneys? fees against DEFENDANTS under this cause of action. THIRD CAUSE OF ACTION VIOLATION OF GOVERNMENT CODE 1.2940(h) [Retaliation] (Against All DEFENDANTS and DOES 1 to 100) 54. NISENBAUM re-alleges and incorporates herein by reference, as though set forth in foil, each and every allegation contained in Paragraphs 1 through 53, inclusive. i 3 COMPLAINT FOR DAMAGES 10 1.1 12 13 .E 4 55. There was no professional or business justification for terminating MR. employmentiwith AMERICAN APPAREL. Any stated reasons for actions were pre textual to cover up the true reasons and motivations, to wit, retaliation for MR. opposition to and complaints of discrimination on the basis of religion. 56. continued conduct towards MR. NISENBAUM and, ultimately, their termination of MR. NISENBAUM, was in violation of public policy embodied in Government Code 12940(h), which prohibits an employer from discriminating against an employee because that employee opposes any act prohibited by FEHA. 57. The actions of the and each of them, in terminating MR. employment by retaliating against him constitutes unlawful discrimination in violation of settled law including but not limited to California Government Code 12900, m, the Caiifornia Constitution, Articie I, 8, and Civil Code 1770, 58. The conduct, statements, and acts described herein were an ongoing part of a continuing scheme and course of conduct. DEFENDANT knew the substance of the above-described facts and circumstances and ratified the wrongs and injuries mentioned herein when it was their ability to prevent, remedy and/or correct these wrongs. DEFENDANTS further intentionally and willfuily failed to ensure that their employees were informed of the law relevant to their duties or to ensure that employees would not be required to participate in illegal conduct. 59. DEFENDANTS have continued to ratify and have refused to remedy or correct the aforementioned conduct during and since MR. employment, notwithstanding the fact that company officials knew or reasonably should have known of the conduct and its unlawfulness. 60. As a direct and proximate result of the aforementioned violations of statute and public policy, MR. NISENBAUM has suffered and will continue to suffer: a. A substantial reduction in future income potential in sums as may be shown according to proof; b. A substantiai injury and damage to his occupation and professional reputation in a sum as may be shown according to proof; c. A substantial reduction in loss of work-related benefits; and [4 COMPLAINT FOR DAMAGES d. Extreme humiliation, embarrassment, depression, sleeplessness, emotional pain, emotional distress which culminated in physical injury and bodily injury, suffering, mental anguish, inconvenience, loss of enjoyment of life, and other losses from the date of said acts all to MR. damage in a sum as may be shown according to proof. 61. The amount of MR. damages is not presentiy known but he wiil seek leave of Court to amend this Complaint when the exact amount of such damages has been ascertained or will prove the same at trial. 62. The above~recited actions of DEFENDANTS were done with malice, fraud, or oppression, and reckless disregard of MR. rights. DEFENDANTS engaged in their offensive conduct despite their awareness of the effect on MR. ISBN BAUM. As a result of these and other actions, MR. NISENBAUM is entitied to an award of punitive damages. 63. In addition, as a proximate result of the wrongful conduct of DEFENDANTS, MR. ISENBAUM is entitled to attorneys? fees and prejudgment interest. 64. Pursuant to California Government Code 12965(b), MR. NISENBAUM requests the award of attorneys? fees against DEFENDANTS under this cause of action. FOURTH CAUSE OF ACTION WRONGFUL TERMINATION IN VIOLATION OF PUBLIC (Against All DEFENDANTS and DOES to 100) 65. MR. NISENBAUM re-alleges and incorporates herein by reference, as though set forth in full, each and every allegation contained in Paragraphs 1 through 64, inclusive. 66. It is the well?estabiished policy of the State of California by and through its statutory and common laws, inciudin but not limited to: the California Constitution, Article I, 8, Government Code 12900, et Business and Professions Code 17200, 139,, and Civil Code 1770, m, 15 U.S.C.A. 78m (issuer of a security to knowingly circumvent or knowingly fail to implement a system of internal accounting controls or knowingly falsify any book, record, or account. t7 CPR. 110.4- 01 (SEC financials must follow the Generally Accepted Accounting Principles); and Sarbanes-Oxley Act of 2002, as codified in 18 U.S.C.A. Civil Code 1572, 1709, 1710, and 1572 (fraud in commercial activities), that it is intolerable and unlawful for an employer to bar or to discharge a person i 5 COMPLAINT FOR DAMAGES ?523 :24 -26 28 0 from employment ?or to discriminate against the person in compensation or in terms, conditions, or privileges of employment in retaliation for opposing an unlawful and/or discriminatory practice or participating in a protected activity. California also has a fundamental, substantial, and well-established public policy against retaliating against an employee for opposing and refusing to participate in corporate fraud, internally raising concerns related to unlawful activities, and/or by refusing to participate in activities that would result in a violation or noncompliance of state law. (See, my Qod_e? 1102.5). 67. in contravention of these policies, MR. ISENBAUM is informed, believes and thereon alleges that DEFENDANTS discriminated, retaliated against him, and terminated him because of his religion and/or his comptaints of discrimination based on religion. MR. NISENBAUM is further informed, believes and thereon alleges that DEFENDANT retaliated-against him, and terminated him because of his complaints of Sarbanes~0xley violations and actions taken by DEFENDANTS to defraud the investing public and because of his refusal to foilow practice of defrauding those investors. 68. actions described herein above were in violation of established public policy against termination for participating in a protected activity and/or discrimination based on religion and/or for complaints of fraud. 69. The conduct, statements and acts described herein were an ongoing part of a continuing scheme and course of conduct. DEFENDANTS were aware of the substance of the above-described facts and circumstances and ratified the wrongs and injuries mentioned herein when it was their ability to prevent, remedy andfor correct these wrongs. 70. DEFENDANTS have continued to ratify and have refused to remedy or correct the aforementioned conduct during and since MR. employment, notwithstanding the fact that they knew or reasonably should have known of the conduct and its unlawfulness. 71. As a direct and proximate result of the aforementioned violations of statute and public policy, MR. NISENBAUM has suffered and will continue to suffer: a. A substantial reduction in past and current income, and future income potential in sums as may be shown according to proof; 16 COMPLAINT FOR DAMAGES substantial injury and damage to his occupation and professional reputation in a sum as may be shown according to proof; c. A substantial reduction in loss of work-related benefits; and d. Extreme humiliation, embarrassment, depression, sleeplessness, emotional pain, emotional distress which culminated in physical injury and bodily injury, suffering, mental anguish, inconvenience, loss of enjoyment of life, and other losses from the date of said acts all to MR. damage in a sum as may be shown according to proof. 72. The amount of MR. damages is not presently known but he will seek leave of Court to amend this Complaint when the exact amount of such damages has been ascertained or will prove the same at trial. 73. The above?recited actions of DEFENDANTS were done with malice, fraud, or oppression, and reckless disregard of MR. rights. DEFENDANTS engaged in their offensive conduct despite their awareness of the effect on MR. NISENBAUM. As a result of these and other actions, MR. ISENBAUM is entitled to an award of punitive damages. FIFTH CAUSE OF ACTION VIOLATION OF LABOR CODE 1102.5 (AGAINST ALL DEFENDANTS AND DOES I TO 100) 74. MR. NISENBAUM re?alleges and incorporates herein by reference, as though set forth in full, each and every allegation contained in Paragraphs 1 through 73, inclusive. 75. MR. NISENBAUM engaged in activities in opposition to AMERICAN unlawful conduct, including without limitation, complaining, opposing, investigating, and trying to prevent AMERICAN fraud. 76. MR. ISENBAUM is informed and believes and thereon alleges that DEFENDANTS did willfully retaliate against him for engaging in the acts alleged herein by terminating his employment. 77. termination of MR. NISENBAUM has caused him economic and noneconomic harm in an amount to be proven at trial, but which are in excess of the minimum jurisdiction of this court. MR. damages include, but are not limited to, loss of earnings and bene?ts, humiliation, embarrassment, mental and emotional distress and discomfort. l7 COMPLAINT FOR DAMAGES oppression, and reckless disregard of MR. rights. DEFENDANTS engaged in their offensive conduct despite their awareness of the effect on MR. ISENBAUM. As a result of these and other actions, MR. NISENBAUM is entitled to an award of punitive damages. in full, each and every allegation contained in Paragraphs 1 through 78, inclusive. inspect or copy records of that empioyee?s tile pursuant to subdivision pertaining to a current or former employee shall comply with the request as soon as practicable, but no later than 21 catendar days from the date of the request. Additionally, pursuant to Labor Code 1198.5, former employees are allowed access to their personnel files and records that relate to their performance or to any grievance concerning them. employment file, in violation of Labor Code 1t98.5. Tellineg all documents relative to MR. June 18, 2014, religious discrimination complaint and June 23, 2014, Sarbanes Oxley complaint were removed from his personnel file in contravention of Labor Code 1198.5. Plaintiff is informed and believes that AMERICAN APPAREL now has a practice of sanitizing illegally fired employees by stuffing personnel files with backdated memorandums that the employees were never shown white working at AMERICAN APPAREL and removing select documents from files that demonstrate illegal practices by the company. teave of Court to amend this Complaint when the exact amount of such damages has been ascertained or will prove the same at trial. The? above-recited actions of DEFENDANTS were done with malice, fraud, or SIXTH CAUSE OF ACTION VIOLATION OF LABOR CODE 1,198.5 (AGAINST ALL DEFENDANTS AND DOES 1 T0 100) MR. NISENBAUM re-alieges and incorporates herein by reference, as though set forth Pursuant to Labor Code 1198.5, an employer who receives an employee?s request to DEFENDANTS failed to compiy with MR. written request for his The amount of MR. damages is not presently known, but he will seek l8 COMPLAINT FOR DAMAGES SEVENTH CAUSE OF ACTION 2 INTENTIONAL INF LICTION OF EMOTIONAL DISTRESS 3 (Against All DEFENDANTS and DOES to 100) 4 83. MR. NISENBAUM re?alleges and incorporates herein by reference, as though set forth 5 in full, each and every allegation contained in Paragraphs 1 through 82, inclusive. 6 84. conduct toward MR. NISENBAUM, as alleged above, including but 7 not limited to the discrimination based on religion, was outrageous and unpriviieged and was done either 8 with the intent to cause severe emotional distress or with reckless disregard of the probability of causing 9 such emotional distress. it} 85. As a direct and proximate result of the aforementioned conduct, MR. NISENBAUM has ll. suffered and will continue to suffer: 12. a. A substantial reduction in past and current income, and future income potential 13 in sums as may be shown according to proof; 14 b. A substantial injury and damage to his occupation and professional reputation shown according to proof; 16 c. A substantial reduction in loss of work-minted benefits; and 17 (1. Extreme humiliation, embarrassment, depression, sleeplessness, emotional pain, 18 emotional distress which culminated in physicai injury and bodily injury, suffering, mental anguish, l9 inconvenience, loss of enjoyment of life, and other losses from the date of said acts all to MR. 20 damage in a sum as may be shown according to proof. 86. The amount of MR. damages is not presently known, but he will seek leave of Court to amend this Complaint when the exact amount of such damages has been ascertained or will prove the same at trial. 87. The above-recited actions of DEFENDANTS were done with malice, fraud, or oppression, and reckless disregard of MR. rights. DEFENDANTS engaged in their offensive conduct despite their awareness of the effect on MR. NISENBAUM. As a result of these and 27 other actions, MR. NISENBAUM is entitled to an award of punitive damages. 28 If/ 19 COMPLAINT FOR DAMAGES EIGHTH CAUSE OF ACTION OF BUSINESS PROFESSIGNS CODE 17200, (Against All DEFENDANTS and DOES 1 to 100) 88. MR. NISENBAUM re~alleges and incorporates herein by reference, as though set forth in full, each and every allegation contained in Paragraphs 1 through 87, inclusive. 89. California Business and Professions Code ?l7200, provides that unfair competition shall mean and include ?all unlawful, unfair or fraudulent business acts or practices and unfair, deceptive, untrue or misleading advertising.? 90. MR. NISENBAUM is informed and believes and thereon alleges that DEFENDANTS have engaged in unfair competition in violation of California Business and Professions Code ?17200, gt seq, by maintaining a workplace rife with discrimination and retaliation on the basis of religion. 91. Such business practices are also a violation of California public policy, including but not limited to the following: Government Code ?12900, m, California Constitution, Article I, and Civil Code 1770, The continuation of such unfair business practices allows DEFENDANTS to maintain an unfair advantage over other companies which comply with Government Code ?12900, gt gm, and the public policy of the state of California. 92. DEFENDANTS fall within the definition of ?person? as set forth at Business and Professions Code. ??17203 and 17506. 93. The unlawful, unfair, and fraudulent business practices of DEFENDANTS described above present a continuing threat to members of the public in that DEFENDANT 8 have or will soon engage in the conduct described above, and members of the public are likely to be deceived when they pursue or gain employment with DEFENDANTS. Pursuant to California Business and Professions Code ?17203, MR. NISENBAUM seeks an order from this Court that: a. Provides inj unctive and declaratory relief finding that DEFENDANTS have violated the provisions of California Business and Professions Code ?l7200, w; and b. For an order enjoining DEFENDANTS and their respective successors, agents, servants, officers, directors, employees, and all other persons acting in concert with them, directly or indirectly, from engaging in conduct which violates California Business and Professions Code ?l7200, 20 FOR DAMAGES CE SEQ. WHEREFORE, MR. NISENBAUM prays for judgment against DEFENDANTS, and each of them, as follows: 1. Dated: April 20, 2015 For general, special, actual, compensatory, and/or nominal damages, including prejudgrnent interest, in an amount to be determined at triai; For lost salary, both front and back pay, bonuses, and any other benefits to which MR. NISENBAUM would have been entitled to and/or afforded but-for and each of their, unlawful conduct, according to proof; For punitive damages in an amount to be determined at trial sufficient to punish penalize and/or deter DEFENDANTS, and each of them, from further engaging in the conduct described herein, and to deter others from engaging in the same or similar acts; For approPriate civil and statutory penalties; For restitution and/or disgorgernent of all ilingotten gains (on the 8th Cause of Action only) For preiiminary and permanent injunction against DEFENDANTS from the acts of unfair competition as described in the 8th Cause of Action; For reasonable costs and attorneys? fees where appropriate; For pre~ and post?judgment interest on ali damages and other relief awarded herein from all entities against whom such relief may be properly awarded; and, For all such Other relief as this Court deems just and appropriate, STEINBERG By: (??zmg .Ke' amine Sarah E. Hernandez Jennifer H. Yeung Attorneys for Plaintiff DAVID NISENBAUM 2 COMPLAINT FOR DAMAGES