The board of American Apparel voted to oust founder Dov Charney as chairman and notified him of its intent to remove him as president and chief executive, the clothing chain said in a statement Wednesday night.
The move means Charney was suspended as president and CEO of the Los Angeles-based chain pending a contractually required 30-day period before he can be terminated.
The board's statement said that the proposed firing is for cause, and cited an "ongoing investigation into alleged misconduct," without giving details.
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"We take no joy in this, but the board felt it was the right thing to do," said Allan Mayer, one of two board members appointed co-chairmen to replace Charney. "Dov Charney created American Apparel, but the Company has grown much larger than any one individual and we are confident that its greatest days are still ahead."
Charney has been the subject of several lawsuits alleging inappropriate sexual conduct with female employees. He has acknowledged having sexual relationships with workers, but said they were consensual.
Charney could not immediately be reached for comment on Wednesday night.
Executive Vice President and Chief Financial Officer John Luttrell, has been named interim CEO. He has been with American Apparel since 2011 and previously worked for Old Navy and Wet Seal. The board says it is working with a search firm to find a permanent CEO.
The company, founded by Charney in 1998, manufactures clothes and sells them in its own 249 retail stores in 20 countries and has about 10,000 employees in 20 countries.
It planned to maintain Charney's commitment to sweatshop-free U.S.-based manufacturing, Luttrell said in a statement.