Speaker 1: Welcome to the Bloomberg Law Podcast. I'm June Grosso. Every
Speaker 1: day we bring you insight and analysis into the most
Speaker 1: important legal news of the day. You can find more
Speaker 1: episodes of the Bloomberg Law Podcast on Apple Podcasts, SoundCloud
Speaker 1: and on Bloomberg dot com slash podcasts. Oh pairs have
Speaker 1: been coming to this country for more than half a
Speaker 1: century through a program overseen by the US State Department.
Speaker 1: More than ninety old Pairs are using US courts to
Speaker 1: challenge the Old Pair program in a type of legal
Speaker 1: action that allows them to band together a class action.
Speaker 1: They claim that fifteen private agencies engaged in a wage
Speaker 1: fixing conspiracy, colluding to keep their compensation below the minimum wage,
Speaker 1: and the old Pairs have cleared a hurdle, a Colorado
Speaker 1: federal judge has certified the class allowing the lawsuit to proceed.
Speaker 1: Joining me is Josh Idolson, Bloomberg Business Week reporter Josh
Speaker 1: tell us about the program. Thanks for having me so.
Speaker 1: This is a program under which young foreign workers under
Speaker 1: come to the US. They provide live in child care.
Speaker 1: They work on paper. It's supposed to be no more
Speaker 1: than forty five hours a week. It is part of
Speaker 1: the j one so called cultural exchange visa program overseen
Speaker 1: by the State Department, And if you listen to the
Speaker 1: sponsor agencies, these private companies that oversee the program as
Speaker 1: certified by the State Department tell it. They would say,
Speaker 1: this is not primarily a work program. It's a give
Speaker 1: and take where someone welcomes the stranger into their home
Speaker 1: and that stranger helps them with the kids and gets
Speaker 1: treated as part of the family. So it's build as
Speaker 1: a cultural exchange program, not a labor program. What do
Speaker 1: these old pairs say about that billing versus reality? Well,
Speaker 1: something I heard from multiple plaintiffs as well as attorneys
Speaker 1: is this is something that's marketed to the o pairs
Speaker 1: as the best year of your life and a cultural opportunity,
Speaker 1: and marketed to the families who are hosting them as
Speaker 1: cheap childcare and a chance to employ someone for a
Speaker 1: lot less money than you would have to pay finding
Speaker 1: someone some other way in the US. So the plaintiffs
Speaker 1: are suing these fifteen private agencies that basically control the
Speaker 1: old pair labor market tell us about their claims and
Speaker 1: their use of the antitrust law. So they allege that
Speaker 1: there is a wage fixing conspiracy where these agencies, who
Speaker 1: win the lawsuit was filed, were the only agencies authorized
Speaker 1: by the State Department to administer the program. Together set
Speaker 1: over rate as what will be presented to the O
Speaker 1: pairs as the most they can make, and presented to
Speaker 1: the families is what all O pairs get paid aid,
Speaker 1: And among the allegations are that OH pairs were falsely
Speaker 1: told not just that this was the government's rate for
Speaker 1: what they should be paid exactly, but that they could
Speaker 1: be deported if they tried to get some other rate.
Speaker 1: Among the evidence is allegedly conversations of an investigator had
Speaker 1: with officials at the agencies in which they again allegedly
Speaker 1: confirmed that there's an agreement among the agencies to get
Speaker 1: everybody paying this rate. Now, the agencies say this is
Speaker 1: a ridiculous allegation because it's really the government that said
Speaker 1: this is the amount of pairs will get paid. A
Speaker 1: magistrate judge, however, said that was a ridiculous claim to
Speaker 1: make because the alleged government document really is just reminding
Speaker 1: people of the floor on what's allowed under wage laws.
Speaker 1: So this lawsuit is one of many controversies surrounding these
Speaker 1: j vs, as which Donald Trump, when he was a candidate,
Speaker 1: pledge to replace with an inner city youth jobs program.
Speaker 1: Tell me about some of the other controversies. That's right.
Speaker 1: We've seen over the past several years, strikes actually by
Speaker 1: some j one Summer travel student work participants. We saw
Speaker 1: one among people working at Hershey's in Pennsylvania. We saw
Speaker 1: people working for a McDonald's franchise e go on strike,
Speaker 1: alleging that they were being made to work more than
Speaker 1: twenty hours consecutively and being charged exorbitant rates to live
Speaker 1: in a basement controlled by the franchise e. So cultural exchange.
Speaker 1: I talked to some of those strikers years ago, and
Speaker 1: they said they did get a cultural exchange, coming together
Speaker 1: with these other students from around the world and going
Speaker 1: on strike and defying this company. But it was not
Speaker 1: the cultural exchange that was advertised, certainly not. What is
Speaker 1: the status of the j VS is well, there have
Speaker 1: been rumors that there will be major changes to these
Speaker 1: programs under President Trump. This is an area where you
Speaker 1: have heard concerns from the left and from the right,
Speaker 1: though certainly phrased somewhat differently. But we don't really know what,
Speaker 1: if any change there will be to this program under
Speaker 1: this administration, and the State Department did not wish to
Speaker 1: speak at length about it. How big a hurdle was
Speaker 1: it for the planeffs in this case the O pairs
Speaker 1: to get class action certification. Well, class certification, as in
Speaker 1: any case, is a very big deal. And prior to that,
Speaker 1: the fact that this case survived motion to dismiss, and
Speaker 1: that the magistrate judge and the federal judge, who largely
Speaker 1: embraced the magistrate judges ruling, saw these as allegations that
Speaker 1: should proceed, and in fact said that if what is
Speaker 1: being alleged is true, there is what another judge has
Speaker 1: referred to as the smoking gun in a price fixing case,
Speaker 1: actual explicit conspiracy to set prices of people's labor. We
Speaker 1: often think of antitrust as all about prices for consumers,
Speaker 1: but it's equally about wages for workers. And what's the
Speaker 1: likelihood now that there might be a settlement of this case, Well,
Speaker 1: you know better than I do. At the point that
Speaker 1: there's been a class action certification hurdle crossed. If you
Speaker 1: are providing counsel as a defense attorney, that can change
Speaker 1: your calculation. We are waiting for the end of the
Speaker 1: week for the deadline for the defendants to formally announced
Speaker 1: that they would seek federal Appeals Court consideration of that
Speaker 1: motion on class certification. But I imagine there's some calculation
Speaker 1: going on at the moment. Thanks Josh, it's it's really
Speaker 1: a fascinating area. And oh, Paris have come up so
Speaker 1: much in the past, it's not surprising me as a lawsuit.
Speaker 1: That's Josh Idlesoon Bloomberg Business Week reporter. Harvey Weinstein faces
Speaker 1: a wave of sexual assault claim stretching back to the seventies. Now,
Speaker 1: Weinstein and his company are facing a civil rights lawsuit
Speaker 1: by the state of New York. The stakes are high,
Speaker 1: including sale of the troubled studio. New York Attorney General
Speaker 1: Eric Schneiderman said a four month investigation revealed a pervasive
Speaker 1: pattern of sexual harassment, intimidation, and discrimination that was flagrant.
Speaker 1: We have never seen anything as despicable as what we've
Speaker 1: seen here. We made it very clear that our three
Speaker 1: principles are very simple. Um victims and employees have to
Speaker 1: be treated fairly going forward. We don't think that is
Speaker 1: too much to ask of anyone who wants to continue
Speaker 1: the work of the Weinstein Company. Or purchase its assets,
Speaker 1: and that last part is key. Schneiderman said an offer
Speaker 1: to buy Weinstein's film and TV company is not acceptable
Speaker 1: in its current form. Weinstein's attorney, Ben Braffman said that
Speaker 1: many of the allegations against Weinstein are without merit, and
Speaker 1: while his behavior was not without fault, there certainly was
Speaker 1: no criminality. My guest is an expert in this area.
Speaker 1: Jennifer and Drew Back, a visiting scholar at Harvard Law School.
Speaker 1: Jennifer tell us more about the allegations in the lawsuit. Well,
Speaker 1: the lawsuit alleges a number of civil rights violations and
Speaker 1: um AT pattern and practice of systemically discriminating against women
Speaker 1: and also enabling Harvey Weinstein to sexually assault UH and
Speaker 1: UH engage in violent behavior with either employees or UM
Speaker 1: women who were potential clients of his Jennifer, Yeah, it's
Speaker 1: just a it's a civil rights lawsuit. Basically, we've seen
Speaker 1: lawsuits by employees against companies for sexual harassment and discrimination,
Speaker 1: civil rights violations. Is it unusual to have a state
Speaker 1: sewer company. It's not unusual in the sense that you
Speaker 1: get UM departments of Fair Employment and housing. Is that
Speaker 1: the department in California, and you can have a variety
Speaker 1: of state agencies UM engaging in lawsuits on behalf of
Speaker 1: aggrieved employees. UM. But typically if there are employees who
Speaker 1: can come forward, they do and they don't go through
Speaker 1: UM like the of typically if they have the ability
Speaker 1: to sue privately on their own UM. Typically because many
Speaker 1: of the state UH agencies don't get as much in
Speaker 1: prosecuting the lawsuits. UM. So this one is a little
Speaker 1: bit unusual in that sense. But UM. I also note
Speaker 1: I've I've read the lawsuit, and I note that UM
Speaker 1: the state is suing not only for violations of these laws,
Speaker 1: but for civil penalties to the State of New York,
Speaker 1: for example, for a hundred thousand dollars for each violation
Speaker 1: UM of particular New York statutes two hundred fifty thousand
Speaker 1: per a violation of another one. So that can add
Speaker 1: up to a lot of money. So there, so the
Speaker 1: Attorney General's office is putting the State of New York
Speaker 1: in as UM as a sort of a we're scipient
Speaker 1: of assets UM from this company and from the Weinstein brothers.
Speaker 1: Weinstein is trying to sell the studio to Maria contraras Sweet,
Speaker 1: who was the head of a small business administration for
Speaker 1: three years under President Obama. This lawsuit was filed electronically
Speaker 1: on Sunday, before the deal was set to close. Why
Speaker 1: did the a G want to block that deal? It's
Speaker 1: not so much that the a G wants to block
Speaker 1: the deal. The a G could have blocked the deal arguably. UM, So,
Speaker 1: what what the AG is doing is putting New York's
Speaker 1: claims on record file and alerting the buyers that the
Speaker 1: State of New York is not agreeable to the sale
Speaker 1: under the sales particular current terms. Now there's some controversy
Speaker 1: over what those terms are in some dispute with the
Speaker 1: BIO is claiming that they have a fund for victims.
Speaker 1: But and at first I was sympathetic because if the
Speaker 1: sale doesn't go through, there's a potential for bankruptcy, in
Speaker 1: which everyone loves it. However, I think the Attorney General
Speaker 1: UM maybe taking some short term hostility for some long
Speaker 1: term gain for the state and everyone else, because um,
Speaker 1: the Attorney General is pointing out some problems. For example, um,
Speaker 1: what has been specified as a fund, it's really a
Speaker 1: litigation fund, which could go to pay attorney such as
Speaker 1: Gloria Alred um, who's representing some of the women who
Speaker 1: have been agreed, And what the a G. S Office
Speaker 1: is specifying is that there would be a victim's fund
Speaker 1: to make sure that the victims are compensated for their injuries. UM.
Speaker 1: There's also some question as to whether or not the
Speaker 1: perpetrators who engaged in cover ups and who facilitated Harvey
Speaker 1: Weinstein's egregious behavior, it looks like they were going to
Speaker 1: continue on with the company once it was purchased, and
Speaker 1: that's part of the Attorney General's problem with the sale.
Speaker 1: And it's not to say that these people wouldn't clean
Speaker 1: up their act under you know, sort of oversight by
Speaker 1: the predominantly female board of directors, but to allow people
Speaker 1: who have engaged in such egregious cover up behavior is
Speaker 1: pretty stocking. UM. And so the Attorney General is on
Speaker 1: behalf the people of New York UH stating some objection
Speaker 1: to that, and I think understandably so. And in this
Speaker 1: era of hashtag me too and times up, UM, I
Speaker 1: think it's important to draw attention to this issue. Jennifer.
Speaker 1: We have just about thirty seconds here. The Equal Employment
Speaker 1: Opportunity Commission hasn't seen a spike in sexual harassment claims
Speaker 1: despite the fallout from the Weinstein scandal and the advent
Speaker 1: of me too. Uh, the me too movement? Is there
Speaker 1: any reason you see for that? In about thirty seconds only, Uh,
Speaker 1: it's it's possible that companies are being proactive. I hope
Speaker 1: that's the answer, and and are taking this in house
Speaker 1: and are resolving these issues, um in a way that
Speaker 1: doesn't require people to go to outside agencies such as
Speaker 1: the eo C. Thank you so much for being here
Speaker 1: and your insights. That's Jennifer and Drove Back, a visiting
Speaker 1: scholar at Harvard Law School. Thanks for listening to the
Speaker 1: Bloomberg Law Podcast. You can subscribe and listen to the
Speaker 1: show on Apple Podcasts, SoundCloud, and on Bloomberg dot com
Speaker 1: slash podcast. I'm June Brosso. This is Bloomberg