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While most manufacturers have spent millions securing subcontractors or even factories in Third World countries, Dov Charney's operation, American Apparel LLC, is in downtown Los Angeles. His factory workers--who can receive health-care and immigration support, English and computer classes, even on-the-job massages--earn an average of $10 an hour, with the potential of making much more. In five years, Charney, a self-described neurotic Jew from Montreal, has built American Apparel into a $40-million business. In an era when corporate responsibility is top of mind and in an industry notorious for its treatment of workers, Charney, 34, stands out. He makes clothing in a "sweatshop-free" environment--and, with unerring market savvy, labels each piece that way. American Apparel manufactures T-shirts, all-cotton sweats, tank tops, polo shirts and panties, sold primarily in the so-called imprintables market--that is, clothing with nothing printed on it.