San Antonio Express-News (Sunday)
Grunt Style, founder continue to battle
On a clear September morning outside a far North Side coffee shop, Daniel Alarik told the story of howhe lost Grunt Style, themilitary-themed apparel company he created, grew and loved.
He spoke with the confidence and precision one would expect of a former Army drill sergeant. The 38-year-old veteran who deployed twice to the Balkans was upbeat and forward-looking as he recounted the wins and losses. He said he knew he’d made mistakes.
His mistakes were significant — and they’re culminating in a bitter legal dispute with the company he founded.
Alarik lost control of San Antonio-based Grunt Style in 2019 to C3 Capital, a small-business lender based in Kansas City, Mo. The new majority owner removed him as CEO but kept him on as board chairman and an adviser under contract.
Privately held Grunt Style, however, terminated Alarik’s employment contract in August, though he remains chairman and the largest individual shareholder.
On Oct. 2, he sued the company in state District Court in Bexar County for breaking the contract. He’s seeking as much as $1 million in fees and damages.
Grunt Style responded Oct. 27 with several counterclaims, accusing Alarik of drinking on the job, financial mismanagement and “inappropriate sexual relationships with employees.”
The court filing didn’t elaborate on the allegations, though the San Antonio Express-News reported in October on Alarik’s past alcohol use in the workplace and Grunt Style’s financial travails— both of which he acknowledged.
CEOGlenn Silbert, a formerUnder Armour executive who replaced Alarik as chief executive in February, declined to comment on the lawsuit.
In an e-mail Monday, Alarik turned down an interview request, saying he’s “going to leave the legal items to the lawyers, while I just focus on my family.”
Meanwhile, several more former employees have come forward to describe a chaotic, highstress workplace where women were sometimes demoralized and the threat of violence loomed. One ex-worker said she was groped during an office party.
Fast company
Under Alarik, Grunt Style grew fast.
Born in Anaheim, Calif., and raised near Chicago, he founded the company in 2009 while still serving in the Army. He sold funny, pointedly unpolitically correct T-shirts from the trunk of his Nissan Rogue at Fort Benning, Ga. Less than a decade later, Grunt Style was racking up nearly $100 million in annual sales and was one of the best-known veteranowned companies in the country.
Forbes magazine in 2017 called Alarik “America’s Grittiest Entrepreneur,” and the company sponsored NASCAR, the NFL and UFC. It staged massive parties — called “Grunt Fests” — around the country.
The company, however, experienced a cash crunch in 2018 that nearly wiped it out.
To stave off disaster, Alarik secured a $10 million loan agreement with C3 Capital, but Grunt Style soon defaulted. He lost his majority stake in the company when the lender converted the debt into equity in Grunt Style.
Ashley Peebles experienced the financial crisis firsthand.
In October 2017, Grunt Style hired Peebles, a single mother in the Dallas area at the time, and she soon relocated to San Antonio. Alarik moved the company headquarters from Carol Stream, Ill., near Chicago, to San Antonio in late 2017, soon settling into a threestory brick building at 900 Broadway.
“Within a few months … I realized this is not a good company,” said Peebles, who managed Grunt Style’s suite at the AT&T Center and laterworked in its finance and wholesale departments.
The company missed one of its monthly health insurance contributions for employees and barely made payroll on several occasions, she said.
In an interview in late September, Alarik acknowledged the company was within a week or two of not making payroll in early 2018.
‘Look cute, smile’
More troubling to Peebles was the treatment of female employees at Grunt Style.
During a party at the company’s Broadway office Jan. 30, 2019, she said, a male co-worker groped her as he walked past “like it was no big deal.” She told a male colleague but said she didn’t file a complaint with human resources because she didn’t think the company had an HR manager at the time.
She said thecompanyhad hada high turnover of HR heads — one lasted only two weeks.
“It wouldn’t matter anyway,” she said. That kind of behavior was typically “brushed under the rug and ignored.”
Jessica Lerma, Grunt Style’s general counsel and vice president of human resources, said the company did have an HR representative whom Peebles could have turned to. However, Lerma added, the apparel maker was “a
typical, fast-growth company wheremaybe you outgrow the experience of your employee who might have been in HR at that time.”
Lerma joined Grunt Style is September 2018 and took over HR responsibilities 13 months later.
According to Peebles, some male employees frequently made comments such as: “You can’t do this — get out of the way.” She said they treated female co-workers as “ifwewere only sexual objects, always expected to look cute and have a smile.”
“There was a lot of fake smiling going on. ... Itwas very awkward,” she said.
Lerma declined to discuss Peebles’ specific allegations but said the mistreatment ofwomen in the workplace “would absolutely not be tolerated at Grunt Style today.”
Nearly half of Grunt Style’s 56 employees at the headquarters office arewomen, she said, with 11 in management roles. Overall, the company employs roughly 270 workers.
“We knowdiversitydrives innovation, and with half of our leadership in San Antonio being comprised of females, Grunt Style takes that mission seriously,” Lermasaid. “In fact, for our 2021mentorship program, where our most senior leaders are mentoring select employees, we are proud to say that we have all females as the inaugural class.”
Fire in the alley
“There was a lot of screaming, yelling between men, men and women,” Peebles said, describing office life at Grunt Style. “A lot of bad things happened there, and I just stuck it out. You shouldn’t be afraid to go to your job.”
The flamethrower really bothered her.
More than once in the spring of 2019, she said, co-workers paraded a functional flamethrower around the Broadway office.
“They were walking around with it and goofing around with it,” she said. The flamethrower, she added, wasn’t ignited. “They were definitely wearing it around the office — just to wear it around the office.”
Civilians can legally purchase flamethrowers in Texas.
The device was the star of advertising photo shoots in the alley near the company’s headquarters. Peebles said Grunt Style employees fired the flamethrower in the alley “numerous times.”
Lerma acknowledged that employees took photos of the flamethrower in action in the alley, adding
that they adhered guidelines.
The flamethrower remains at headquarters under lock and key, according to CEO Silbert, who described it as a marketing prop.
“Nobody is walking around our office with a flamethrower right now,” Lerma said.
WoodyWoodward, spokesman for the San Antonio Fire Department, said the city’s fire prevention code prohibits “reignited materials” that create “disturbance or cause a fire hazard” within city limits.
“Although a flamethrower device might not be addressed specifically in the code or amendments, the fire hazard created by it is prohibited,” he said. “However, if someone that wanted to use some kind of special effect that involved a flamethrower in a show in front of an audience, they could obtain a permit for that.”
Silbert and Lerma said they didn’t know if the company had a permit for the alleyway photo shoots, and the city did not respond to an inquiry about whether thecompanyhadsecured a permit.
A reporter was unable to locate Grunt Style’s flamethrower photos online. In July, however, thecompany posted a video on social media that included a flamethrower being fired on a weapons range outside San Antonio.
Peebles said she was fired in July 2019 and that she’d received a performance review about six weeks before her termination that characterized her as “being negative.”
Tumults
to
safety
Oneex-worker, who asked to remain anonymous, said that during Grunt Style’s Chicago-area years, employees frequently settled disagreements by fighting outside.
“Yeah, I could tell you about the ‘Fight Club’ at the dumpsters,” noted another former employee, Bryan Duszczak, who joined the company in 2012. He rose through the ranks to oversee customized apparel sales.
Lerma said the company doesn’t allow fighting on any Grunt Style property.
The company, Silbert said, has no tolerance for sexual misconduct, abusive language and disrespect in the workplace.
“There’s no place for that in our company,” he said. “There’s been a lot of change at Grunt Style and a lot of change for the positive.”
Shortly before moving with the company to Texas, Duszczak said he took an unexpected 25 percent
pay cut.
He said he wasn’t in the best of health because of frequent12-hour workdays and a poor diet. In July 2018 he suffered a stroke, and he believes the shock of his pay reduction and work stress contributed to it.
“I had the stroke the weekend after they told me that they were taking away part of my commission structure,” Duszczak said. “I ended up in the hospital within 72 hours of them telling me they changed my pay.”
At the time, hewas preparing to move fromIllinois to San Antonio. Against his doctor’s advice, he pressed ahead while still recovering from his stroke.
But this past January, he said, Grunt Style fired him after he argued with a supervisor about the company’s new owners.
For his part, Silbert said he’s focused on Grunt Style’s current performance and its future.
“There’s history,” he said. “I think there’s history with every company and every brand, but there’s also the body of our work today.”
“We’ll continue to stick to what we do best, which is make great products, take care of employees, protect the livelihoods of our employees financially and physically, and as importantly do great things for the community,” he said.
On Veterans Day, the company said it would give “more than $100,000 to charities that support veterans, active military and their families” in a campaign from Nov. 13 to 23.
Legal trouble
In its countersuit, Grunt Style said the feud with Alarik had caused “irreparable harm” to the business, including more than $1 million in damages to the brand. The company is seeking dismissal of his lawsuit, an unspecified award for damages and injunctions against Alarik.
“Everyone is dying to take shots at Dan now, and none of them are willing to talk about the hardwork they put in, the pride they did it with and how they grew from the chaos,” said a former member of Grunt Style’s upper management. Still, he added: “So many things were promised with the best of intentions, but the execution of the tasks were managed really poorly.”
After C3 Capital took majority control of Grunt Style, Alarik signed a two-year employment agreement making him responsible for “vision and branding,” with a salary of $300,000, potential
bonuses and health care benefits, according to Alarik’s breachof-contract lawsuit.
“Within months, Alarik became frustrated with the changes being implemented by the new CEO, which significantly departed from the values and focus of the Grunt Style brand and community,” the lawsuit said. “For example, when Grunt Style’s customer outreach efforts started to include excessive use of profanity in its emails to over a million customers, Alarik expressed his concern to Silbert that it was a departure from Grunt Style’s values.”
Alarik’s lawsuit claims he was never “notified of any performance issues” and was terminated via email.
His legal troubles don’t end with Grunt Style’s counterclaims.
On Monday, Alpha Outpost, a company in St. Charles, Ill., that sells subscriptions for outdoor gear, sued Alarik in Circuit Court of Cook County in that state. It’s seeking more than $62,000, accusing Alarik of violating the terms of a 2018 agreement to sell Alarik Outpost — a venture unrelated to Grunt Style — to Alpha Outpost.
The lawsuit alleges that Alarik failed to disclose that Alarik Outpost owed more than $53,000 in Illinois business income tax, plus interest and penalties. Alpha Outpost received a bill from the state in August and claimed Alarik did not respond to its request for payment.
Alarik appears to be taking the turmoil in stride.
He posted a video online Tuesday in which he expressed admiration for King David in the Bible for his “authentic rawness.”
“He’s a man that had struggles, had successes, had mistakes and failures, but he always tried to recenter himself,” he said. “He’s like, ‘You knowwhat? You’re right — I’m going to own it, and I’m going to do the right thing.’ ... I just love that foundation, that core, that kept him focused on something greater than himself.”
Alarik put his $1.4 million home in Boerne on the market Oct. 23.
On Tuesday, he posted on social media that the property is under contract and that he’sworking as a consultant for a veteranowned company.
The firemen’s doctor was Dr. Bill Gonzaba, who had opened his medical practice a year earlier after earning his degree from the University of Texas Medical Branch in Galveston. Dr. Bill had grown up on the southside of San Antonio, in the Sunny Slope neighborhood, and he felt called to come back to serve his community, which he believed was medically under-served. in the hospital together and did the four surgeries back to back.