January 8, 2008 -- The founder of American Apparel will star in a sexual-harassment trial this week, and he makes Isiah Thomas sound like Susan B. Anthony.

Dov Charney walks around his office in his underwear, sleeps with employees, and calls women bitches, sluts, whores and the c-word - and that's the stuff he admits to.

In her civil case, which is slated to begin in Los Angeles tomorrow, former employee Mary Nelson charges the eccentric Charney, 39, once had a meeting with her wearing only a fragment of clothing called a "c- - k sock," invited her to masturbate with him, and then fired her when he learned she planned to meet with a lawyer.

Nelson's lawyer, Keith Fink, said his first witness would be Charney, who's turned his company into a multimillion-dollar retail giant with 7,000 employees.

Asked in a deposition whether he'd ever referred to women as "sluts" at work, he said, "In private conversations, where such language was generally welcome."

Asked whether he considered the word "derogatory," he said, "There are some of us that love sluts . . . It could be also be an endearing term."

Asked whether he'd ever used the c-word for female genitalia at work, he said, "Absolutely."

He also acknowledged traipsing around his company wearing only his American Apparel-made underwear.

"There is no evidence to say that you can't walk around in your underwear all day anywhere in the United States of America," he testified.

"Not only does he admit to virtually all of the outlandish allegations in this case, [but] he's somewhat proud of how he comports himself in the workplace," Fink said. "That's what I find so shocking."

His client went to work as a sales manager for the company in November 2003.

Said Fink: "She felt uncomfortable from the get-go," a feeling that deepened when she and a colleague went for a business meeting at Charney's house and he stripped down to show off the sock on his privates.

Charney said that he couldn't remember the incident but that it was possible he was trying to show them new merchandise.

Nelson says she was fired after complaining about outrageous sexual shenanigans by company employees at trade shows and then consulting with a lawyer.

In a statement, the company called Nelson's charges "outrageous and false," and that some were contradicted by her own deposition.

"The facts are these: Mr. Charney never harassed Ms. Nelson. Mr. Charney never propositioned Ms. Nelson. The only time he was in his undergarments was for strictly professional reasons," the statement said.

"We are glad this frivolous case will be soon behind us."

Labels: unfamously treated