In the past couple years clothing company American Apparel has garnered criticism for its policy of firing — or simply not hiring — employees who it deems too ugly , as Gawker’s “Apparel watch” bloggers have repeatedly noted. And now, it’s contending with a different form of internal ugliness, specifically, that of racial discrimination. Last Wednesday, an arbitrator in Oakland ruled in favor of plaintiff Christopher Renfro, a former American Apparel employee who alleged that his supervisor, Sean Alonzo, repeatedly called him a “nigger” during a July 2007 business trip to renovate American Apparel stores in Tennessee. According to testimony, the company avoided disciplining Mr. Alonso until it was threatened with litigation in October. At that point, it gave him a written warning, followed by a pay raise two days later.