Everlane’s Promises to Its Workers Were Made to Be Broken

Like American Apparel before it, Everlane began as a clothing company for Millennials built on a supposedly ethical business model. But by now the lesson should be clear: when push comes to shove, businesses will always subordinate ethics to profit.

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In a saturated market, branding is the key to turning a profit. And in 2010, the founders of the clothing company Everlane hit on a brand strategy that positioned them well in the competitive field of online fashion: they promised to be honest and good. The notion, dubbed “radical transparency,” rhymed with the firm’s apparel concept which foregrounded tasteful basics. Everything about Everlane was accessible, simple, and clean.

In the beginning, Everlane seemed like the anti–American Apparel, which had been in a tailspin for years. At the same time venture capitalists were coughing up seed money for Everlane, the federal government was investigating American Apparel for misleading shareholders. In the preceding years, its founder Dov Charney had gained a reputation as a serial sexual harasser, casting the company’s distinctive advertising style featuring amateur models in provocative poses in a sinister light. And as anyone who frequented American Apparel’s white-walled brick-and-mortar stores in the late aughts remembers, the quality of the clothing was rapidly declining.

In the hailstorm of controversy, American Apparel’s origins were all but forgotten. In reality, they were not dissimilar from Everlane’s. American Apparel, too, was founded as a supposedly ethical clothing company specializing in simple essentials. The brand relied heavily on the promise that its clothes were sweatshop-free, its workers paid a fair wage in the United States. To the modern urban older-millennial consumer, Charney told the New York Times in 2004 as the brand was beginning to explode, “it doesn’t feel good when their happiness is based on exploitation.”

American Apparel clothing distinctively featured no graphics or logos, which appealed to the period’s particular strain of liberal anti-consumerism. Eventually the progressive aversion to visible branding gave way to a desire for detailed commodity sourcing information, a tendency memorably parodied in a 2011 Portlandia skit in which a white urban professional couple inquires whether the hazelnuts consumed by the chicken on the menu are local. The waitress hands them the chicken’s papers; his name is Colin.

By promising to be entirely transparent about every detail of their operation, Everlane was diligently tracking the trends. “We make our Seed Stitch sweaters in Dongguan, China, in a small, three-story sweater manufacturing facility that employs just 120 people,” read typical Everlane copy. “The small scale of the operation allows the factory to consistently deliver top-notch knits.”

There were notable aesthetic differences between the two brands, of course. Where American Apparel could find a way to sexualize even hair accessories, Everlane CEO Michael Preysman promised that “You do not get laid in Everlane.” The brand was less provocative and more polished, targeted in fact at a slightly older demographic who had probably worn American Apparel in their late teens and early twenties and were now settling into full-time (if not necessarily lucrative) office work. But when it came to the brand fundamentals — conscious company makes elemental garments for elder millennials — Everlane wasn’t exactly reinventing the wheel. In fact it was merely assuming the position on the pedestal from which American Apparel had fallen.

Predictably, after years of nonstop company growth and fawning press coverage, Everlane now shows signs of following in its predecessor’s footsteps. An article appeared in the New York Times last week harshly titled, “Everlane’s Promise of ‘Radical Transparency’ Unravels.”

As part of its Radical Transparency™ pledge — the company trademarked the phrase in 2017 — Everlane “promised to reveal its pricing markups, its clothing suppliers, its ecological footprint.” But the Times judged it to have fallen well short of its self-assigned responsibilities, observing a failure to disclose key sustainability metrics and “an absence of initiatives to guarantee living wages.” The Times story also detailed allegations of overwork and underpay among Everlane employees, a racially insensitive office culture, and union-busting.

The accusations from inside the company have been brewing for a while. They were accelerated by the new wave of Black Lives Matter protests, which have sparked conversations about anti-black racism, and the coronavirus pandemic, which Everlane is alleged to have exploited to fire the majority of a division that was attempting to unionize.

By the time the New York Times reached them, Everlane’s corporate leadership already had kicked into public relations crisis management mode. They were prepared with multiple gestures of contrition and restitution, most of them unlikely to have much effect on the company’s internal problems, including opening a seat for one black person on its board of directors, partnering with outside anti-racist NGOs, and instituting company-wide anti-racist trainings.

These are the kinds of token changes a company agrees to institute when it wants to get credit for addressing a problem without giving up anything of quantifiable value. Any company would rather diversify its board than open all its labor and environmental practices up to full public scrutiny, inviting pressure that might imperil its bottom line since high profits depend on keeping labor and production costs down. Likewise, any company would rather schedule a few anti-racism trainings than agree to let workers form a union. A union would give employees another avenue for filing grievances over workplace racism besides the human resources department, which exists to protect the company. But a union would also raise workers’ wages and benefits, which would again threaten profits.

The most damning judgment of Everlane, from a London-based sustainability consultant, appears at the end of the article. He says, “Fundamentally, what they do is not any different from most mass-market fashion brands who do exactly the same, or more. They do some good work, but I wouldn’t describe it as radical. The most radical thing about Everlane is the marketing.”

As much poetry as there is in Everlane’s beginning its descent down the same path as its ethical basics forebearer, it also has an entirely rational explanation. Businesses that stake their reputation on a promise that they will be uniquely good will eventually be revealed as hardly better than the competition. This isn’t because the people at the top aren’t actually well-intentioned, which would imply that better corporate leadership would solve the problem. It’s because businesses have little choice but to prioritize profit-making.

Sometimes businesses, not just in fashion but across industries, make promises to pay special attention to wages or sustainability. There is a capitalist calculus to this: it has the potential to work as a marketing strategy that will increase the desirability of the product and, ultimately, move units and increase profits. If a company calibrates wrong, their ethical decisions will cause them to lose money and potentially go under. There’s always, then, a limit to how ethical a company can be, and that limit is determined not by individuals but by the market.

American Apparel appealed to millions with its claim to pay workers an above-average wage for the type of work they were performing — a claim which was by all accounts true. But in 2004, the same year that Charney was explaining the strategy of appealing to consumers’ consciences to the New York Times, the company blocked unionization efforts at its garment factory in Los Angeles. It wanted to throw workers a bone, but on its own terms, not on workers’ terms or even shared terms.

The move perfectly illustrates the principle of corporate self-interest. Companies that promise to be ethical are actually promising to be ethical only insofar as it serves them, and to remain vigilant about the limits of their own largesse. The same principle can be found in corporations’ substitution of voluntary philanthropy on their terms for paying taxes on ours.

The structural inability of corporations to neglect their bottom line is one of the most compelling arguments for moving toward an economy that isn’t dominated by profit-seeking private firms, which is the goal of socialism. In the meantime, we can’t rely on their internal moral compasses for the outcomes we desire. We need to protect their employees’ right to unionize and regulate companies’ labor and environmental practices through the state.

“I am trying to figure out that right line of how to be as human as possible, while also running a business,” a defensive Preysman told the New York Times. But if there’s one thing we know about capitalism, it’s that when corporations are faced with the ultimatum, the latter always wins. If the house of Everlane falls, another brand with a heart of gold will take its place on the pedestal. But perhaps by then our generation will be warier of its promises.