According to Renfro's attorney, American Apparel supervisor Sean Alonzo called Renfro the N-word at least 12 times during a business trip in 2006.
Renfro originally sued the clothing store for $1 million. The attorney also added that Refro reported Alonzo to management, but Alonzo was only reprimanded after the suit was filed.
Unsavory behavior is becoming de rigeur at American Apparel. The company's founder and CEO Dov Charney is often lambasted in the press, and for good reason. He has been sued by former employees in the past, including a sexual harassment case from an 18 year old named Irene Morales, who claimed that Charney forced her to perform sexual acts on him.
It was not the first, or last, time such allegations have come out.
American Apparel has also sparked controversy for a policy requiring applicants to submit full-body photos of themselves, as well as for their racy, sexualized print ads which have included visible public hair and bare breasts.
Contemporaneously, the company has been in financial trouble recently. The board of directors debated filing for chapter 11 bankruptcy last spring, but decided not to. On Wednesday, two of the board members who voted for chapter 11 protection, Mark Samson and Mark Thornton, resigned.
The company was blessed with a monetary injection by Canadian investors, who gave American Apparel $15 million in April, 2011. This was needed after the company reportedly lost $86.3 million in 2010, and the company is hoping that more investors will come to its aid.