WEBVTT - State Department Au Pair Program At Risk

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<v Speaker 1>Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every

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<v Speaker 1>day we bring you insight and analysis into the most

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<v Speaker 1>important legal news of the day. You can find more

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<v Speaker 1>episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud

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<v Speaker 1>and on Bloomberg dot com slash podcasts. Oh pairs have

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<v Speaker 1>been coming to this country for more than half a

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<v Speaker 1>century through a program overseen by the US State Department.

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<v Speaker 1>More than ninety old Pairs are using US courts to

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<v Speaker 1>challenge the Old Pair program in a type of legal

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<v Speaker 1>action that allows them to band together a class action.

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<v Speaker 1>They claim that fifteen private agencies engaged in a wage

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<v Speaker 1>fixing conspiracy, colluding to keep their compensation below the minimum wage,

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<v Speaker 1>and the old Pairs have cleared a hurdle, a Colorado

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<v Speaker 1>federal judge has certified the class allowing the lawsuit to proceed.

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<v Speaker 1>Joining me is Josh Idolson, Bloomberg Business Week reporter Josh

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<v Speaker 1>tell us about the program. Thanks for having me so.

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<v Speaker 1>This is a program under which young foreign workers under

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<v Speaker 1>come to the US. They provide live in child care.

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<v Speaker 1>They work on paper. It's supposed to be no more

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<v Speaker 1>than forty five hours a week. It is part of

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<v Speaker 1>the j one so called cultural exchange visa program overseen

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<v Speaker 1>by the State Department, And if you listen to the

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<v Speaker 1>sponsor agencies, these private companies that oversee the program as

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<v Speaker 1>certified by the State Department tell it. They would say,

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<v Speaker 1>this is not primarily a work program. It's a give

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<v Speaker 1>and take where someone welcomes the stranger into their home

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<v Speaker 1>and that stranger helps them with the kids and gets

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<v Speaker 1>treated as part of the family. So it's build as

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<v Speaker 1>a cultural exchange program, not a labor program. What do

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<v Speaker 1>these old pairs say about that billing versus reality? Well,

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<v Speaker 1>something I heard from multiple plaintiffs as well as attorneys

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<v Speaker 1>is this is something that's marketed to the o pairs

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<v Speaker 1>as the best year of your life and a cultural opportunity,

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<v Speaker 1>and marketed to the families who are hosting them as

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<v Speaker 1>cheap childcare and a chance to employ someone for a

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<v Speaker 1>lot less money than you would have to pay finding

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<v Speaker 1>someone some other way in the US. So the plaintiffs

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<v Speaker 1>are suing these fifteen private agencies that basically control the

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<v Speaker 1>old pair labor market tell us about their claims and

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<v Speaker 1>their use of the antitrust law. So they allege that

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<v Speaker 1>there is a wage fixing conspiracy where these agencies, who

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<v Speaker 1>win the lawsuit was filed, were the only agencies authorized

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<v Speaker 1>by the State Department to administer the program. Together set

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<v Speaker 1>over rate as what will be presented to the O

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<v Speaker 1>pairs as the most they can make, and presented to

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<v Speaker 1>the families is what all O pairs get paid aid,

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<v Speaker 1>And among the allegations are that OH pairs were falsely

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<v Speaker 1>told not just that this was the government's rate for

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<v Speaker 1>what they should be paid exactly, but that they could

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<v Speaker 1>be deported if they tried to get some other rate.

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<v Speaker 1>Among the evidence is allegedly conversations of an investigator had

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<v Speaker 1>with officials at the agencies in which they again allegedly

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<v Speaker 1>confirmed that there's an agreement among the agencies to get

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<v Speaker 1>everybody paying this rate. Now, the agencies say this is

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<v Speaker 1>a ridiculous allegation because it's really the government that said

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<v Speaker 1>this is the amount of pairs will get paid. A

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<v Speaker 1>magistrate judge, however, said that was a ridiculous claim to

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<v Speaker 1>make because the alleged government document really is just reminding

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<v Speaker 1>people of the floor on what's allowed under wage laws.

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<v Speaker 1>So this lawsuit is one of many controversies surrounding these

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<v Speaker 1>j vs, as which Donald Trump, when he was a candidate,

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<v Speaker 1>pledge to replace with an inner city youth jobs program.

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<v Speaker 1>Tell me about some of the other controversies. That's right.

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<v Speaker 1>We've seen over the past several years, strikes actually by

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<v Speaker 1>some j one Summer travel student work participants. We saw

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<v Speaker 1>one among people working at Hershey's in Pennsylvania. We saw

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<v Speaker 1>people working for a McDonald's franchise e go on strike,

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<v Speaker 1>alleging that they were being made to work more than

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<v Speaker 1>twenty hours consecutively and being charged exorbitant rates to live

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<v Speaker 1>in a basement controlled by the franchise e. So cultural exchange.

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<v Speaker 1>I talked to some of those strikers years ago, and

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<v Speaker 1>they said they did get a cultural exchange, coming together

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<v Speaker 1>with these other students from around the world and going

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<v Speaker 1>on strike and defying this company. But it was not

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<v Speaker 1>the cultural exchange that was advertised, certainly not. What is

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<v Speaker 1>the status of the j VS is well, there have

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<v Speaker 1>been rumors that there will be major changes to these

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<v Speaker 1>programs under President Trump. This is an area where you

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<v Speaker 1>have heard concerns from the left and from the right,

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<v Speaker 1>though certainly phrased somewhat differently. But we don't really know what,

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<v Speaker 1>if any change there will be to this program under

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<v Speaker 1>this administration, and the State Department did not wish to

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<v Speaker 1>speak at length about it. How big a hurdle was

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<v Speaker 1>it for the planeffs in this case the O pairs

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<v Speaker 1>to get class action certification. Well, class certification, as in

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<v Speaker 1>any case, is a very big deal. And prior to that,

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<v Speaker 1>the fact that this case survived motion to dismiss, and

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<v Speaker 1>that the magistrate judge and the federal judge, who largely

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<v Speaker 1>embraced the magistrate judges ruling, saw these as allegations that

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<v Speaker 1>should proceed, and in fact said that if what is

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<v Speaker 1>being alleged is true, there is what another judge has

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<v Speaker 1>referred to as the smoking gun in a price fixing case,

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<v Speaker 1>actual explicit conspiracy to set prices of people's labor. We

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<v Speaker 1>often think of antitrust as all about prices for consumers,

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<v Speaker 1>but it's equally about wages for workers. And what's the

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<v Speaker 1>likelihood now that there might be a settlement of this case, Well,

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<v Speaker 1>you know better than I do. At the point that

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<v Speaker 1>there's been a class action certification hurdle crossed. If you

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<v Speaker 1>are providing counsel as a defense attorney, that can change

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<v Speaker 1>your calculation. We are waiting for the end of the

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<v Speaker 1>week for the deadline for the defendants to formally announced

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<v Speaker 1>that they would seek federal Appeals Court consideration of that

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<v Speaker 1>motion on class certification. But I imagine there's some calculation

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<v Speaker 1>going on at the moment. Thanks Josh, it's it's really

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<v Speaker 1>a fascinating area. And oh, Paris have come up so

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<v Speaker 1>much in the past, it's not surprising me as a lawsuit.

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<v Speaker 1>That's Josh Idlesoon Bloomberg Business Week reporter. Harvey Weinstein faces

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<v Speaker 1>a wave of sexual assault claim stretching back to the seventies. Now,

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<v Speaker 1>Weinstein and his company are facing a civil rights lawsuit

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<v Speaker 1>by the state of New York. The stakes are high,

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<v Speaker 1>including sale of the troubled studio. New York Attorney General

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<v Speaker 1>Eric Schneiderman said a four month investigation revealed a pervasive

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<v Speaker 1>pattern of sexual harassment, intimidation, and discrimination that was flagrant.

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<v Speaker 1>We have never seen anything as despicable as what we've

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<v Speaker 1>seen here. We made it very clear that our three

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<v Speaker 1>principles are very simple. Um victims and employees have to

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<v Speaker 1>be treated fairly going forward. We don't think that is

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<v Speaker 1>too much to ask of anyone who wants to continue

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<v Speaker 1>the work of the Weinstein Company. Or purchase its assets,

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<v Speaker 1>and that last part is key. Schneiderman said an offer

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<v Speaker 1>to buy Weinstein's film and TV company is not acceptable

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<v Speaker 1>in its current form. Weinstein's attorney, Ben Braffman said that

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<v Speaker 1>many of the allegations against Weinstein are without merit, and

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<v Speaker 1>while his behavior was not without fault, there certainly was

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<v Speaker 1>no criminality. My guest is an expert in this area.

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<v Speaker 1>Jennifer and Drew Back, a visiting scholar at Harvard Law School.

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<v Speaker 1>Jennifer tell us more about the allegations in the lawsuit. Well,

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<v Speaker 1>the lawsuit alleges a number of civil rights violations and

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<v Speaker 1>um AT pattern and practice of systemically discriminating against women

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<v Speaker 1>and also enabling Harvey Weinstein to sexually assault UH and

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<v Speaker 1>UH engage in violent behavior with either employees or UM

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<v Speaker 1>women who were potential clients of his Jennifer, Yeah, it's

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<v Speaker 1>just a it's a civil rights lawsuit. Basically, we've seen

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<v Speaker 1>lawsuits by employees against companies for sexual harassment and discrimination,

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<v Speaker 1>civil rights violations. Is it unusual to have a state

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<v Speaker 1>sewer company. It's not unusual in the sense that you

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<v Speaker 1>get UM departments of Fair Employment and housing. Is that

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<v Speaker 1>the department in California, and you can have a variety

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<v Speaker 1>of state agencies UM engaging in lawsuits on behalf of

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<v Speaker 1>aggrieved employees. UM. But typically if there are employees who

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<v Speaker 1>can come forward, they do and they don't go through

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<v Speaker 1>UM like the of typically if they have the ability

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<v Speaker 1>to sue privately on their own UM. Typically because many

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<v Speaker 1>of the state UH agencies don't get as much in

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<v Speaker 1>prosecuting the lawsuits. UM. So this one is a little

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<v Speaker 1>bit unusual in that sense. But UM. I also note

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<v Speaker 1>I've I've read the lawsuit, and I note that UM

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<v Speaker 1>the state is suing not only for violations of these laws,

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<v Speaker 1>but for civil penalties to the State of New York,

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<v Speaker 1>for example, for a hundred thousand dollars for each violation

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<v Speaker 1>UM of particular New York statutes two hundred fifty thousand

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<v Speaker 1>per a violation of another one. So that can add

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<v Speaker 1>up to a lot of money. So there, so the

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<v Speaker 1>Attorney General's office is putting the State of New York

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<v Speaker 1>in as UM as a sort of a we're scipient

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<v Speaker 1>of assets UM from this company and from the Weinstein brothers.

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<v Speaker 1>Weinstein is trying to sell the studio to Maria contraras Sweet,

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<v Speaker 1>who was the head of a small business administration for

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<v Speaker 1>three years under President Obama. This lawsuit was filed electronically

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<v Speaker 1>on Sunday, before the deal was set to close. Why

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<v Speaker 1>did the a G want to block that deal? It's

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<v Speaker 1>not so much that the a G wants to block

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<v Speaker 1>the deal. The a G could have blocked the deal arguably. UM, So,

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<v Speaker 1>what what the AG is doing is putting New York's

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<v Speaker 1>claims on record file and alerting the buyers that the

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<v Speaker 1>State of New York is not agreeable to the sale

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<v Speaker 1>under the sales particular current terms. Now there's some controversy

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<v Speaker 1>over what those terms are in some dispute with the

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<v Speaker 1>BIO is claiming that they have a fund for victims.

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<v Speaker 1>But and at first I was sympathetic because if the

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<v Speaker 1>sale doesn't go through, there's a potential for bankruptcy, in

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<v Speaker 1>which everyone loves it. However, I think the Attorney General

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<v Speaker 1>UM maybe taking some short term hostility for some long

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<v Speaker 1>term gain for the state and everyone else, because um,

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<v Speaker 1>the Attorney General is pointing out some problems. For example, um,

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<v Speaker 1>what has been specified as a fund, it's really a

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<v Speaker 1>litigation fund, which could go to pay attorney such as

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<v Speaker 1>Gloria Alred um, who's representing some of the women who

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<v Speaker 1>have been agreed, And what the a G. S Office

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<v Speaker 1>is specifying is that there would be a victim's fund

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<v Speaker 1>to make sure that the victims are compensated for their injuries. UM.

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<v Speaker 1>There's also some question as to whether or not the

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<v Speaker 1>perpetrators who engaged in cover ups and who facilitated Harvey

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<v Speaker 1>Weinstein's egregious behavior, it looks like they were going to

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<v Speaker 1>continue on with the company once it was purchased, and

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<v Speaker 1>that's part of the Attorney General's problem with the sale.

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<v Speaker 1>And it's not to say that these people wouldn't clean

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<v Speaker 1>up their act under you know, sort of oversight by

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<v Speaker 1>the predominantly female board of directors, but to allow people

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<v Speaker 1>who have engaged in such egregious cover up behavior is

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<v Speaker 1>pretty stocking. UM. And so the Attorney General is on

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<v Speaker 1>behalf the people of New York UH stating some objection

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<v Speaker 1>to that, and I think understandably so. And in this

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<v Speaker 1>era of hashtag me too and times up, UM, I

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<v Speaker 1>think it's important to draw attention to this issue. Jennifer.

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<v Speaker 1>We have just about thirty seconds here. The Equal Employment

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<v Speaker 1>Opportunity Commission hasn't seen a spike in sexual harassment claims

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<v Speaker 1>despite the fallout from the Weinstein scandal and the advent

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<v Speaker 1>of me too. Uh, the me too movement? Is there

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<v Speaker 1>any reason you see for that? In about thirty seconds only, Uh,

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<v Speaker 1>it's it's possible that companies are being proactive. I hope

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<v Speaker 1>that's the answer, and and are taking this in house

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<v Speaker 1>and are resolving these issues, um in a way that

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<v Speaker 1>doesn't require people to go to outside agencies such as

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<v Speaker 1>the eo C. Thank you so much for being here

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<v Speaker 1>and your insights. That's Jennifer and Drove Back, a visiting

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<v Speaker 1>scholar at Harvard Law School. Thanks for listening to the

0:14:37.520 --> 0:14:40.920
<v Speaker 1>Bloomberg Law Podcast. You can subscribe and listen to the

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<v Speaker 1>show on Apple Podcasts, SoundCloud, and on Bloomberg dot com

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<v Speaker 1>slash podcast. I'm June Brosso. This is Bloomberg