SCOTUS Upholds Workplace Arbitration Contracts Barring Class Actions

From today’s New York Times:

 The Supreme Court on Monday ruled that companies can use arbitration clauses in employment contracts to prohibit workers from banding together to take legal action over workplace issues.

The vote was 5 to 4, with the court’s more conservative justices in the majority. The court’s decision could affect some 25 million employment contracts.

Writing for the majority, Justice Neil M. Gorsuch said the court’s conclusion was dictated by a federal law favoring arbitration and the court’s precedents. If workers were allowed to band together to press their claims, he wrote, “the virtues Congress originally saw in arbitration, its speed and simplicity and inexpensiveness, would be shorn away and arbitration would wind up looking like the litigation it was meant to displace.”

Justice Ruth Bader Ginsburg read her dissent from the bench, a sign of profound disagreement. In her written dissent, she called the majority opinion “egregiously wrong.” In her oral statement, she said the upshot of the decision “will be huge under-enforcement of federal and state statutes designed to advance the well being of vulnerable workers.”

Justice Ginsburg called on Congress to address the matter.

Brian T. Fitzpatrick, a law professor at Vanderbilt University who studies arbitrations and class actions, said the ruling was unsurprising in light of earlier Supreme Court decisions. Justice Gorsuch, he added, “appears to have put his cards on the table as firmly in favor of allowing class actions to be stamped out through arbitration agreements.”

As a result, Professor Fitzpatrick said “it is only a matter of time until the most powerful device to hold corporations accountable for their misdeeds is lost altogether.”

But Gregory F. Jacob, a lawyer with O’Melveny & Myers in Washington, said the decision would have a limited impact, as many employers already use the contested arbitration clauses. “This decision thus will not see a huge increase in the use of such provisions,” he said, “but it does protect employers’ settled expectations and avoids placing our nation’s job providers under the threat of additional burdensome litigation drain.”

Read the complete article here.

Mick Mulvaney says CFPB’s priority is ‘free markets and consumer choice’

From today’s LA Times:

Consumer Financial Protection Bureau chief Mick Mulvaney told lawmakers Wednesday that the agency’s new priority is “to recognize free markets and consumer choice” and take “a humble approach to enforcing the law,” according to prepared remarks released in advance.

In his first testimony to Congress since his controversial appointment as the bureau’s acting director, Mulvaney acknowledged that many lawmakers have disagreed with his actions in the job, “just as many members disagreed with the actions of my predecessor.”

Mulvaney blamed lawmakers’ frustrations on the structure of the bureau, an independent watchdog created in the wake of the financial crisis. He was an outspoken critic of the bureau as a Republican congressman, and last week he formally asked Congress to reduce the bureau’s authority.

Mulvaney and other Republicans have said the bureau is unaccountable because its funding, like that of other financial regulators, is outside the appropriations process, and the president can fire the bureau’s director only for cause, rather than at will.

Read the complete article here.

Facebook Says Cambridge Analytica Harvested Data of Up to 87 Million Users

From today’s New York Times:

Facebook on Wednesday said that the data of up to 87 million users may have been improperly shared with a political consulting firm connected to President Trump during the 2016 election — a figure far higher than the estimate of 50 million that had been widely cited since the leak was reported last month.

Mark Zuckerberg, the company’s chief executive, also announced that Facebook would offer all of its users the same tools and controls required under European privacy rules. The European rules, which go into effect next month, give people more control over how companies use their digital data.

Facebook had not previously disclosed how many accounts had been harvested by Cambridge Analytica, the firm connected to the Trump campaign. It has also been reluctant to disclose how it was used by Russian-backed actors to influence the 2016 presidential election.

Among Facebook’s acknowledgments on Wednesday was the disclosure of a vulnerability in its search and account recovery functions that it said could have exposed “most” of its 2 billion users to having their public profile information harvested.

The new effort to appear more transparent about the data leaks — including a rare question-and-answer session with Mr. Zuckerberg and reporters — came just before Mr. Zuckerberg’s expected testimony next week on Capitol Hill, where he will most likely face criticism over how the company collects and shares the personal data of its users. Sheryl Sandberg, Mr. Zuckerberg’s top deputy, has several national television interviews scheduled for later this week.

The company said that on Monday it would start telling users whether their information may have been shared with Cambridge Analytica.

Andy Stone, a spokesman for Facebook in Washington, said the 87 million figure was an estimate of the total number of users whose data could have been acquired by Cambridge Analytica. He said that the estimate was calculated by adding up all the friends of the people who had logged into the Facebook app from which Cambridge Analytica collected profile data.

Read the complete article here.

When Wall Street Writes Its Own Rules, It’s An Age of Unprecedented Corruption

From today’s New York Times:

On July 25, 2013, a high-ranking federal law enforcement officer took a public stand against malfeasance on Wall Street. Preet Bharara, then the United States attorney for the Southern District of New York, held a news conference to announce one of the largest Wall Street criminal cases the American justice system had ever seen.

Mr. Bharara’s office had just indicted the multibillion-dollar hedge fund firm SAC Capital Advisors, charging it with wire fraud and insider trading. Standing before a row of television cameras, Mr. Bharara described the case in momentous terms, saying that it involved illegal trading that was “substantial, pervasive and on a scale without precedent in the history of hedge funds.” His legal action that day, he assured the public, would send a strong message to the financial industry that cheating was not acceptable and that prosecutors and regulators would take swift action when behavior crossed the line.

Steven A. Cohen, the founder of SAC and one of the world’s wealthiest men, was never criminally charged, but his company would end up paying $1.8 billion in civil and criminal fines, one of the largest settlements of its kind. He denied any culpability, but his reputation was still badly — some might argue irreparably — damaged. Eight of his former employees were charged by the government, and six pleaded guilty (a few later had their convictions or guilty pleas dismissed). Mr. Cohen was required to shut his fund down and was prohibited from managing outside investors’ money until 2018.

Now, with the prohibition having expired in December, Mr. Cohen has been raising money from investors and is set to start a new hedge fund. He’ll find himself in an environment very different from the one he last operated in. His resurrection arrives as Wall Street regulation is under assault and financiers are directing tax policy and other aspects of the economy — often to the benefit of their own industry. Mr. Cohen is a powerful symbol of Wall Street’s resurgence under President Trump.

As the stock market lurched through its stomach-turning swings over the past week, it was hard not to worry that Wall Street could once again torpedo an otherwise healthy economy and to think about how little Mr. Trump and his Congress have done to prepare for such a possibility. Stock market turbulence typically prompts calls for smart and stringent financial regulation, which is not part of the Trump agenda. One of Mr. Trump’s first acts as president was to fire Mr. Bharara, who made prosecuting Wall Street crime one of his priorities. Mr. Trump has also given many gifts to people like Mr. Cohen.

Read the complete article here.

How Wells Fargo and Federal Reserve Struck Deal to Hold Board Accountable

From today’s New York Times:

On a Thursday evening in mid-January, a group of top Wells Fargo executives sat down for dinner in an upscale surf-and-turf restaurant near the White House. At nearby tables, power brokers ate seafood on ice and sipped cocktails out of copper mugs.

The Wells Fargo executives — including the chief executive, Timothy J. Sloan, and the finance chief, John R. Shrewsberry — enjoyed their crab legs, but they were in Washington on unpleasant business. The Federal Reserve planned to impose tough sanctions on the San Francisco-based bank for years of misconduct and the shoddy governance that allowed it.

The executives’ mission, according to three people directly involved in the negotiations, was to avoid further shaking investor confidence in the bank and its management team.

Officials at the central bank had a different goal, according to people familiar with their thinking. They wanted to send a message to the Wells board that it would be held responsible for the company’s behavior.

After three weeks of frenzied negotiations, deal was announced on Friday night that represented a milestone in the evolving relationship between regulators and banks. Wells Fargo, one of the country’s largest banks, was banned from getting bigger until it can convince regulators that it has cleaned up its act.

Read the complete article here.

Salaried or Hourly? The Gaps in Family Friendly Policies Begin to Close

From the New York Times:

More large companies like Starbucks and Walmart are starting to see the value in paid leave and other benefits for parents, including hourly workers, though big disparities remain.

As the labor market tightens, employers have been competing for highly educated workers by trying to make it easier for them to do their jobs and also have families — benefits like egg freezing or reduced schedules for new parents.

Now, some employers are beginning to address the same challenge for lower-wage workers, starting with paid family leave.

On Wednesday, Starbucks announced raises and stock grants for all employees in the United States, along with new benefits aimed specifically at workers with family caregiving responsibilities: paid time off to care for sick family members and paid paternity leave for hourly employees.

It followed the announcement by Walmart this month that it was raising pay and adding family-friendly benefits. It gave full-time hourly workers the same paid parental leave as salaried ones and said it would help pay for adoptions, including for hourly workers.

Read the complete article here.

 

On Sex Discrimination, Men at Work Wonder if They’ve Overstepped

From Nov. 10 New York Times by Nellie Bowles:

It has been a confusing season for America’s working men, as the conversation around workplace harassment reveals it to be a nationwide epidemic — and many men wonder if they were involved or ignored the signs.

Consider Owen Cunningham, a director at San Francisco’s KBM-Hogue design firm. When he looks toward the annual corporate holiday party these days, he shudders.

“Cancel the holiday party,” said Mr. Cunningham, 37, adding that he means just until it has been figured out how men and women should interact. He said he considered himself progressive on gender issues but was thinking more about the behavior he had seen in the past: “What flirting is O.K.? Was I ever taking advantage of any meager power I had? You start to wonder.”

Across white-collar workplaces, rank-and-file men are awakening to the prevalence of sexual harassment and assault after high-profile cases including those of Harvey Weinstein, Mark Halperin and Louis C.K. Those cases helped inspire the #MeToo campaign, in which thousands of women have posted about their own harassment experiences on social media. Now many men who like to think they treat women as equals in the workplace are starting to look back at their own behavior and are wondering if they, too, have overstepped at work — in overt or subtle ways that would get them included in a #MeToo post.

“I don’t think I’ve done anything wrong,” said Nick Matthews, 42, who works at PwC, formerly PricewaterhouseCoopers, and lives in San Francisco. “But has anything I’ve done been interpreted another way?”

Read entire article here.

N.F.L. Players May Have an Ally in Their Protests: Labor Law

From today’s New York Times by Noam Scheiber:As National Football League team owners consider President Trump’s call to fire players who refuse to stand for the national anthem, they have stumbled into one of the most consequential debates in today’s workplace: How far can workers go in banding together to address problems related to their employment?

In principle, the answer in the N.F.L. and elsewhere may be: Quite far.

To the extent that most people think about the reach of federal labor law, they probably imagine a union context — like organizing workers, or bargaining as a group across the table from management.

As it happens, the law is much more expansive, protecting any “concerted activities” that employees engage in to support one another in the workplace, whether or not a union is involved. The National Labor Relations Board and the courts have defined such activity to include everything from airing complaints about one’s boss through social media to publicly supporting political causes that have some bearing on one’s work life.

The league’s operations manual says players must be on the sidelines during the anthem and should stand. While the law might not bear on whether an individual player can kneel during the anthem, many experts say it could protect players from repercussions for making such a gesture together — or taking other action — to show solidarity on the job.

And as unionization continues its decades-long decline, some believe that these alternative forms of taking collective action may be crucial to enabling workers to speak up.

Read the entire article here.

Class Actions Lawsuits by Women Could Fight Discrimination in Tech Industry

From today’s New York Times “Opinion” Section by Anita Hill:

The recent leak of a Google engineer’s screed against the company’s diversity initiatives is a reminder that the notion of Silicon Valley as the seat of human progress is a myth — at least when it comes to way the women behind the latest in technology are treated.

The tech industry is stuck in the past, more closely resembling “Mad Men”-era Madison Avenue or 1980s Wall Street than a modern egalitarian society. It may take the force of our legal system to change that.

The leaked memo, titled “Google’s Ideological Echo Chamber,” called on the company to abandon its efforts for gender diversity and replace them with a focus on “ideological diversity.” The author even claimed that biological differences make women poorly suited to engineering. While the document may be unusual in its explicit embrace of this kind of backward thinking, the attitudes that underlie it are nothing new in Silicon Valley. Google’s decision to fire the employee responsible for the memo neither dispels the notion that a systemic problem exists nor solves it.

Since a former Uber employee published her blog post detailing her experience with the ride-sharing company’s toxic, male-dominated culture, a stream of female coders, engineers and others have come forward to discuss their experiences with sexual harassment and hostile, discriminatory workplace cultures. Companies like Google, Tesla, Twitter, Microsoft and Oracle face allegations of sexism in the form of individual lawsuits and Labor Department inquiries.

Sadly, these types of cases represent only one element of the industrywide discrimination against women in tech. There’s also an alarming gap in pay and promotions, which has devastating effects on women’s careers.

Read the entire editorial here.

Kellogg’s pulls ads from white nationalists, Breitbart calls for un-American boycott

From today’s Wall Street Journal:

Breitbart News is asking its readers to boycott Kellogg Co. after the cereal maker said it would no longer advertise on the conservative news website.

In a post on Breitbart News on Wednesday, the publication called on readers to sign a #DumpKelloggs petition against the manufacturer, whose brands include Frosted Flakes, Rice Krispies and Cheez-It.

Kellogg on Tuesday said it would pull its ads from Breitbart News after consumers notified the manufacturer that its products were appearing on the site. A company spokesperson told the Associated Press, “We regularly work with our media buying partners to ensure our ads do not appear on sites that aren’t aligned with our values as a company.”

Breitbart fought back hard. “Boycotting Breitbart News for presenting mainstream American ideas is an act of discrimination and intense prejudice,” Alexander Marlow, Breitbart News editor-in-chief, said in the Breitbart News article.

The anti-Kellogg petition accused Kellogg of trying to “placate left-wing totalitarians.”

In a statement, Kellogg said, “To be clear, our decision had nothing to do with politics.”

Breitbart News, a hard-right site know for scorched-earth populism, has been popular with the “alt right,” portraying immigration and multiculturalism as threats. The site’s critics say it has explicitly embraced white nationalism.

The site’s former chairman, Stephen Bannon, helped run Donald Trump’s presidential campaign and is now poised to become one of the president elect’s top advisers in the White House. Since the election and Mr. Bannon’s appointment, scrutiny of Breitbart has intensified.