1
00:00:03,160 --> 00:00:07,960
Speaker 1: This is Bloombird Law with June Bresso from Bloomberg Radio,

2
00:00:09,400 --> 00:00:11,680
Speaker 1: and this truck will come to market. I can promise

3
00:00:11,680 --> 00:00:13,319
Speaker 1: you that for every doubt or out there that said

4
00:00:13,320 --> 00:00:16,560
Speaker 1: that there's no way this is true. Absolutely, how can

5
00:00:16,600 --> 00:00:18,960
Speaker 1: that be possible, We've done it. It's my pleasure to

6
00:00:18,960 --> 00:00:21,239
Speaker 1: actually let you guys enjoy the night. See the truck. No,

7
00:00:21,400 --> 00:00:24,040
Speaker 1: it's real. Touch at feel how sturdy it is. You're

8
00:00:24,040 --> 00:00:25,959
Speaker 1: gonna see that this is a real truck. This is

9
00:00:26,000 --> 00:00:29,479
Speaker 1: not a pusher. Trevor Milton might have convinced investors that

10
00:00:29,560 --> 00:00:32,120
Speaker 1: his company had built the truck of the future, a

11
00:00:32,320 --> 00:00:36,200
Speaker 1: zero emissions game changer, but he couldn't convince a jury.

12
00:00:36,600 --> 00:00:39,720
Speaker 1: After less than a day of deliberations, a Manhattan jury

13
00:00:39,760 --> 00:00:43,919
Speaker 1: convicted Milton of securities fraud and wire fraud for enticing

14
00:00:43,960 --> 00:00:48,199
Speaker 1: investors to buy Nicolas shares with lies about technology that

15
00:00:48,240 --> 00:00:51,600
Speaker 1: didn't exist, a stunning downfall for the door to door

16
00:00:51,680 --> 00:00:56,320
Speaker 1: salesman turned billionaire who promised to revolutionize the auto industry.

17
00:00:56,720 --> 00:00:59,960
Speaker 1: My guest is securities law expert James Park, a professor

18
00:01:00,080 --> 00:01:02,200
Speaker 1: or at u c l A Law school. James. The

19
00:01:02,280 --> 00:01:06,440
Speaker 1: Justice Department is trying to crack down on corporate crime,

20
00:01:07,000 --> 00:01:11,039
Speaker 1: and they certainly put a lot into this four week trial. Yeah,

21
00:01:11,080 --> 00:01:13,120
Speaker 1: I think so. I think there was a lot to

22
00:01:13,440 --> 00:01:16,600
Speaker 1: put on. There were a lot of different misrepresentations, and

23
00:01:16,640 --> 00:01:18,520
Speaker 1: I think for each of them you have to be

24
00:01:18,600 --> 00:01:23,440
Speaker 1: very careful to establish just exactly what was said and

25
00:01:23,480 --> 00:01:25,880
Speaker 1: what was the actual truth at the time. And I

26
00:01:25,920 --> 00:01:28,039
Speaker 1: think you have to tell a story for each and

27
00:01:28,080 --> 00:01:30,520
Speaker 1: every one of them. And I think the strength of

28
00:01:30,560 --> 00:01:34,959
Speaker 1: the case, to me is not on any single misrepresentation,

29
00:01:35,120 --> 00:01:37,880
Speaker 1: but the whole, the collective full of all four or

30
00:01:37,920 --> 00:01:40,120
Speaker 1: five of them, when you add them up, I think

31
00:01:40,160 --> 00:01:43,640
Speaker 1: that's where you get the criminal securities fraud. And I

32
00:01:43,640 --> 00:01:46,880
Speaker 1: think it was also important that they put on evidence

33
00:01:46,920 --> 00:01:51,240
Speaker 1: from insiders, people who worked at the company, who testified

34
00:01:51,320 --> 00:01:53,360
Speaker 1: that you know, we tried to intervene. We tried to

35
00:01:53,400 --> 00:01:55,720
Speaker 1: tell him you're not telling the truth, and so he

36
00:01:55,800 --> 00:01:57,880
Speaker 1: can't just argue that, well, I just made a bunch

37
00:01:57,920 --> 00:02:00,919
Speaker 1: of mistakes. They intervened and said that you are making

38
00:02:00,960 --> 00:02:04,400
Speaker 1: false statements about material fact. There's also you know, some

39
00:02:04,480 --> 00:02:07,240
Speaker 1: testimony about at some point they tried to lock him

40
00:02:07,240 --> 00:02:09,840
Speaker 1: out of the social media accounts, and so this was

41
00:02:09,919 --> 00:02:14,240
Speaker 1: not a situation where you have a single mistake by

42
00:02:14,280 --> 00:02:18,560
Speaker 1: an important figure in the corporation. This is a pattern

43
00:02:18,639 --> 00:02:22,880
Speaker 1: and practice that was occurring over a number of years

44
00:02:22,960 --> 00:02:27,320
Speaker 1: and accelerated during a critical period in the company's life

45
00:02:27,360 --> 00:02:30,680
Speaker 1: when it was a newly public corporation. And so I

46
00:02:30,680 --> 00:02:33,960
Speaker 1: think that's why we have this four week case. So

47
00:02:34,080 --> 00:02:38,120
Speaker 1: the defense seemed to be two prong one that he

48
00:02:38,160 --> 00:02:42,639
Speaker 1: didn't have intent, he didn't mean to deceive potential investors,

49
00:02:43,280 --> 00:02:47,680
Speaker 1: and in any case, his statements weren't material. And the

50
00:02:47,760 --> 00:02:50,640
Speaker 1: defense attorney sort of comparative in the closing he said,

51
00:02:50,720 --> 00:02:52,760
Speaker 1: you know, they're gonna have to go after the Energizer

52
00:02:52,880 --> 00:02:56,200
Speaker 1: bunny after this. In other words, it was like puffery.

53
00:02:56,440 --> 00:03:00,360
Speaker 1: It wasn't an intent to deceive. Yeah, I remember hearing

54
00:03:00,360 --> 00:03:03,440
Speaker 1: the Energizer bunny prayed. I had to laugh a little

55
00:03:03,480 --> 00:03:06,960
Speaker 1: at that. But you know, Energizer batteries work. They worked

56
00:03:07,000 --> 00:03:11,639
Speaker 1: pretty well, and so you know, fundamentally the product works

57
00:03:11,760 --> 00:03:15,440
Speaker 1: and has been tested and is reliable. And even if

58
00:03:15,440 --> 00:03:18,839
Speaker 1: they have sort of a funny way of showing that,

59
00:03:19,360 --> 00:03:22,680
Speaker 1: you know, there's nothing factually incorrect about the Energizer body

60
00:03:22,720 --> 00:03:25,720
Speaker 1: as far as I know, And in this situation, it's

61
00:03:25,720 --> 00:03:31,359
Speaker 1: not really puff free. When you are misstating very particularized fact.

62
00:03:31,639 --> 00:03:34,800
Speaker 1: You know, he's saying we're producing hydrogen at four dollars

63
00:03:34,800 --> 00:03:37,240
Speaker 1: a gallon at a time when it's selling for sixteen

64
00:03:37,320 --> 00:03:41,000
Speaker 1: dollars a gallon. That's not true. They were not producing

65
00:03:41,080 --> 00:03:44,320
Speaker 1: hydrogen at all. And so you know, when you get

66
00:03:44,360 --> 00:03:48,000
Speaker 1: that specific court generally will say that's not toughery, that's

67
00:03:48,040 --> 00:03:52,200
Speaker 1: a factual misstatement. And you know, he's saying, we produced

68
00:03:52,360 --> 00:03:55,760
Speaker 1: this badger truck using our components from the ground up,

69
00:03:55,880 --> 00:03:59,200
Speaker 1: and implying that they have developed the technology, is their

70
00:03:59,320 --> 00:04:04,120
Speaker 1: proprietor very technology, when in fact they're using third party sources.

71
00:04:04,280 --> 00:04:08,280
Speaker 1: And they're saying we have all of these binding contracts,

72
00:04:08,320 --> 00:04:12,080
Speaker 1: and in the interview he specifically corrects the interview to

73
00:04:12,200 --> 00:04:15,960
Speaker 1: clarify that the contracts are binding, when in fact they

74
00:04:16,000 --> 00:04:18,839
Speaker 1: are not binding and to be canceled in any time.

75
00:04:19,000 --> 00:04:22,080
Speaker 1: These are all fact you know, one or two of them.

76
00:04:22,120 --> 00:04:24,359
Speaker 1: Maybe you could sort of say, you know, he's just

77
00:04:24,480 --> 00:04:26,920
Speaker 1: making mistakes and doesn't have an intense or to see.

78
00:04:27,160 --> 00:04:31,040
Speaker 1: But when we get some multiple misstatements of factual information

79
00:04:31,120 --> 00:04:34,440
Speaker 1: like this, I think it's very very difficult to conclude

80
00:04:34,800 --> 00:04:38,599
Speaker 1: that this was not without deceptive intent, and so I

81
00:04:38,640 --> 00:04:40,599
Speaker 1: think that if you look at the case as a

82
00:04:40,600 --> 00:04:43,359
Speaker 1: whole and it's strong now the materiality point, you know,

83
00:04:43,400 --> 00:04:46,520
Speaker 1: that's always an issue, a very important issue for any

84
00:04:46,680 --> 00:04:51,320
Speaker 1: securities fraud case. Are the misstatements material are the importance

85
00:04:51,360 --> 00:04:54,040
Speaker 1: to investors. And they put on a witness who said

86
00:04:54,080 --> 00:04:56,840
Speaker 1: that for each of these individual statements, we didn't really

87
00:04:57,080 --> 00:05:01,120
Speaker 1: see an immediate soft price reaction. But you know, to me,

88
00:05:01,279 --> 00:05:05,479
Speaker 1: I think the materiality would be in the story that's

89
00:05:05,520 --> 00:05:07,839
Speaker 1: told as a whole, with all of the mis statements

90
00:05:07,920 --> 00:05:12,400
Speaker 1: together over time, that collectively they must have had an

91
00:05:12,440 --> 00:05:17,039
Speaker 1: impact on the company stock price, which did increase exponentially

92
00:05:17,279 --> 00:05:20,719
Speaker 1: over time during the period um when he was making

93
00:05:20,760 --> 00:05:25,560
Speaker 1: these misstatements. And so I think that materiality here, in

94
00:05:25,600 --> 00:05:28,240
Speaker 1: my view, is is satisfied when you look at the

95
00:05:28,279 --> 00:05:32,960
Speaker 1: misstatements collectively as a whole um the mis statements creates

96
00:05:33,040 --> 00:05:37,599
Speaker 1: portrayal of a company that has finished products that are

97
00:05:37,880 --> 00:05:41,080
Speaker 1: soon to be rolled out, and that simply was not true.

98
00:05:41,800 --> 00:05:44,520
Speaker 1: The defense only put on one witness, and that was

99
00:05:44,640 --> 00:05:49,400
Speaker 1: to the materiality. Obviously, a defendant doesn't have to take

100
00:05:49,400 --> 00:05:52,760
Speaker 1: the stand in his own defense, but in this case,

101
00:05:53,240 --> 00:05:55,560
Speaker 1: did it sort of cry out for him to take

102
00:05:55,600 --> 00:05:58,440
Speaker 1: the stand. I mean, he has no criminal background that

103
00:05:58,520 --> 00:06:00,800
Speaker 1: a lot of defendants are worried about if they take

104
00:06:00,880 --> 00:06:04,479
Speaker 1: the stand. Obviously, he's a good talker. Why wouldn't he

105
00:06:04,520 --> 00:06:06,800
Speaker 1: take the stand to try to deflect some of this?

106
00:06:07,440 --> 00:06:09,640
Speaker 1: I think it would have been tough for him to

107
00:06:09,839 --> 00:06:14,240
Speaker 1: defend his statement, you know, even with preparation. I think

108
00:06:14,240 --> 00:06:17,120
Speaker 1: that he would have had to find some some evidence,

109
00:06:17,640 --> 00:06:21,200
Speaker 1: something to back up his statements. And I think that

110
00:06:21,200 --> 00:06:25,320
Speaker 1: that evidence simply did not exist. That he was saying

111
00:06:25,360 --> 00:06:28,880
Speaker 1: things that were false. And so I think that if

112
00:06:28,920 --> 00:06:31,400
Speaker 1: he had to come up and explain why he was

113
00:06:31,440 --> 00:06:36,400
Speaker 1: saying what he was saying, I think that the prosecutors

114
00:06:36,760 --> 00:06:40,480
Speaker 1: would have cross examined him and made a lot of

115
00:06:40,720 --> 00:06:44,880
Speaker 1: significant points. And so I think that, you know, given

116
00:06:45,600 --> 00:06:48,839
Speaker 1: that he did not testify, I think that there there

117
00:06:48,880 --> 00:06:52,640
Speaker 1: may not have been sufficient evidence to back up the

118
00:06:52,680 --> 00:06:57,159
Speaker 1: statements that he made. So prosecutors presented evidence that he

119
00:06:57,240 --> 00:07:00,960
Speaker 1: spent more than eighty million dollars in six months during

120
00:07:01,880 --> 00:07:05,160
Speaker 1: you know, the Gulf Stream jet, the multimillion dollar home,

121
00:07:05,200 --> 00:07:08,120
Speaker 1: and the turks and kid goes. How is that relevant?

122
00:07:08,200 --> 00:07:12,000
Speaker 1: Doesn't that just turn a jury against a defendant? It's

123
00:07:12,040 --> 00:07:14,560
Speaker 1: a good question. You know, I think it may speak

124
00:07:14,600 --> 00:07:18,600
Speaker 1: to motives, and I think the strongest security fraud cases

125
00:07:19,240 --> 00:07:23,120
Speaker 1: are broad against individual executives when they have a motive

126
00:07:23,200 --> 00:07:26,440
Speaker 1: to personally enrich themselves. You know, this is what we

127
00:07:26,520 --> 00:07:31,320
Speaker 1: see in en Rod with Jeff Skilling and World Colm

128
00:07:31,320 --> 00:07:34,760
Speaker 1: with Bernie ebers Jeff Skilling sells tens of billions of

129
00:07:34,800 --> 00:07:38,120
Speaker 1: dollars worth of stock in in the months before the

130
00:07:38,160 --> 00:07:42,320
Speaker 1: restatements that were made by ed Ron. Bernie Eberts had

131
00:07:42,520 --> 00:07:46,280
Speaker 1: hundreds of millions of dollars in loans that were backed

132
00:07:46,360 --> 00:07:49,680
Speaker 1: by World Tom Stock. And so to get at a

133
00:07:50,080 --> 00:07:54,000
Speaker 1: individual executive. To bring a case against an individual executive,

134
00:07:54,080 --> 00:07:56,840
Speaker 1: I think you have a stronger case when there is

135
00:07:56,880 --> 00:08:00,320
Speaker 1: a motive to inflate the stock price. And I think

136
00:08:00,360 --> 00:08:04,840
Speaker 1: that the spending would be relevant because it would show

137
00:08:04,920 --> 00:08:08,200
Speaker 1: why he had an incentive or a special incentive beyond

138
00:08:08,640 --> 00:08:13,360
Speaker 1: the normal corporate founder or executive to boost the company's

139
00:08:13,360 --> 00:08:16,240
Speaker 1: stock price. And another piece of evidence that came out

140
00:08:16,280 --> 00:08:20,280
Speaker 1: is that he negotiated a shorter lock up period. He

141
00:08:20,360 --> 00:08:23,280
Speaker 1: wanted to sell his stock six months after the I

142
00:08:23,400 --> 00:08:26,400
Speaker 1: p O instead of a year. And I think that

143
00:08:26,960 --> 00:08:29,840
Speaker 1: um is also a piece of evidence that may indicate that,

144
00:08:30,080 --> 00:08:32,760
Speaker 1: you know, he may have some financial reason to boost

145
00:08:32,760 --> 00:08:35,319
Speaker 1: the company stock so that he can get out as

146
00:08:35,360 --> 00:08:38,040
Speaker 1: quickly as possible. And so I think it's fair game

147
00:08:38,160 --> 00:08:41,760
Speaker 1: to make allegations like that in the context of a

148
00:08:41,840 --> 00:08:45,360
Speaker 1: security sproad case, because you know, there is second circuit

149
00:08:45,480 --> 00:08:50,640
Speaker 1: precedent which says that individual Enrichmond is relevant on the

150
00:08:50,760 --> 00:08:54,600
Speaker 1: question of whether somebody acted with fraudulent intent, and so

151
00:08:54,640 --> 00:08:56,680
Speaker 1: I think that this is well within the bounds of

152
00:08:57,160 --> 00:09:01,800
Speaker 1: proper evidence for the prosecution to int So outside the courthouse,

153
00:09:01,840 --> 00:09:04,480
Speaker 1: Milton said, I did nothing wrong. I was talking about

154
00:09:04,520 --> 00:09:08,720
Speaker 1: the business plan. He still has hundreds of millions of dollars,

155
00:09:08,760 --> 00:09:11,720
Speaker 1: and obviously they'll be appeals ahead. His attorney said they

156
00:09:11,760 --> 00:09:14,439
Speaker 1: were going to keep on fighting, but appeals are an

157
00:09:14,520 --> 00:09:19,160
Speaker 1: uphill battle. Was there any obvious error trial error that

158
00:09:19,520 --> 00:09:23,320
Speaker 1: they can use here. I didn't see an obvious arrah.

159
00:09:23,559 --> 00:09:26,520
Speaker 1: Others may have, but I did not see an obvious error.

160
00:09:26,920 --> 00:09:30,280
Speaker 1: Do they have a chance on the materiality argument. I

161
00:09:30,320 --> 00:09:32,560
Speaker 1: think it's a long shot. I don't think it's a

162
00:09:32,720 --> 00:09:37,720
Speaker 1: zero percent probability. I think they will raise the materiality arguments,

163
00:09:38,000 --> 00:09:41,320
Speaker 1: and I think that maybe the best arguments they have

164
00:09:41,559 --> 00:09:44,640
Speaker 1: because I think it's fairly clear that these statements are false,

165
00:09:45,000 --> 00:09:47,480
Speaker 1: and that there are multiple statements, and you know, you

166
00:09:47,520 --> 00:09:52,480
Speaker 1: can always make an argument about deceptive intent, about fraudulent intent.

167
00:09:52,800 --> 00:09:55,440
Speaker 1: But I think the prosecution made a very strong case,

168
00:09:55,559 --> 00:09:58,160
Speaker 1: and I think if you look at the misstatements as

169
00:09:58,200 --> 00:10:01,520
Speaker 1: a whole, they are material, a real and given that

170
00:10:01,960 --> 00:10:06,520
Speaker 1: they happened multiple times after warnings, I think it's hard

171
00:10:06,600 --> 00:10:09,240
Speaker 1: for him to argue that he's acting in good faith.

172
00:10:09,400 --> 00:10:13,120
Speaker 1: I think that he knew as a executive chairman of

173
00:10:13,160 --> 00:10:16,760
Speaker 1: a public corporation that he has an obligation to tell

174
00:10:16,800 --> 00:10:19,440
Speaker 1: the truth when he's speaking to the public. Yeah. So,

175
00:10:19,480 --> 00:10:22,760
Speaker 1: the U S Attorney for Manhattan, Damian Williams, said the

176
00:10:22,800 --> 00:10:25,560
Speaker 1: case is a warning to anyone who plays fast and

177
00:10:25,600 --> 00:10:28,400
Speaker 1: loose with the truth to get investors to part with

178
00:10:28,480 --> 00:10:33,480
Speaker 1: their money. So does this case have ramifications beyond this trial?

179
00:10:33,960 --> 00:10:35,840
Speaker 1: I think it does. I mean, I think in some

180
00:10:35,880 --> 00:10:39,800
Speaker 1: ways you can see this as a continuation of the

181
00:10:40,040 --> 00:10:44,720
Speaker 1: effort in the Farahness case, Right Sarahnes involved similar types

182
00:10:44,760 --> 00:10:49,840
Speaker 1: of material misrepresentations with respect to the development of a product.

183
00:10:50,000 --> 00:10:52,760
Speaker 1: It was in the context of a private corporation, and

184
00:10:52,800 --> 00:10:55,280
Speaker 1: I think the next step is a company like this

185
00:10:55,480 --> 00:10:58,560
Speaker 1: which is newly public had been acquired by a spac

186
00:10:59,040 --> 00:11:01,760
Speaker 1: And my think that this sort of builds on the

187
00:11:01,840 --> 00:11:04,240
Speaker 1: lesson of seranists. In my view that if you are

188
00:11:05,000 --> 00:11:09,240
Speaker 1: relatively new technology company, that you have to tell the

189
00:11:09,280 --> 00:11:12,720
Speaker 1: truth about your products. Given how important these sorts of

190
00:11:12,760 --> 00:11:16,760
Speaker 1: companies are to our economy, given the activity we still

191
00:11:16,800 --> 00:11:20,840
Speaker 1: have with respect to entrepreneurial companies, I think that founders

192
00:11:21,360 --> 00:11:26,040
Speaker 1: and management teams of these companies should be very careful

193
00:11:26,080 --> 00:11:28,400
Speaker 1: and take note of both of these cases, take a

194
00:11:28,480 --> 00:11:31,360
Speaker 1: very careful look at the sorts of problems that arose

195
00:11:31,520 --> 00:11:36,400
Speaker 1: when you make factual misstatements. This will hopefully improve the

196
00:11:36,440 --> 00:11:41,440
Speaker 1: practices with respect to these startup companies and newly public corporations.

197
00:11:41,480 --> 00:11:44,560
Speaker 1: You know, we've seen these sorts of products claims throughout

198
00:11:44,600 --> 00:11:48,720
Speaker 1: the history of securities fraud. You know, in times when

199
00:11:49,000 --> 00:11:53,120
Speaker 1: entrepreneurial companies, technology companies become a more important part of

200
00:11:53,280 --> 00:11:57,439
Speaker 1: economy than there are high investor expectations for their products,

201
00:11:57,440 --> 00:12:00,840
Speaker 1: and so there's incentive to lie about the product and

202
00:12:00,920 --> 00:12:04,120
Speaker 1: sort of their prospects. And so you know, nineteen eighties

203
00:12:04,160 --> 00:12:08,600
Speaker 1: we have Apple computer lying about the Leasta office computer

204
00:12:09,000 --> 00:12:11,520
Speaker 1: and that results in a hundred million dollar verdict in

205
00:12:11,559 --> 00:12:14,559
Speaker 1: a trial against some of the executives. And so we

206
00:12:14,640 --> 00:12:17,800
Speaker 1: see these patterns again and again over the decades, and

207
00:12:17,840 --> 00:12:22,079
Speaker 1: I think given the importance of entrepreneurial companies to today's economy,

208
00:12:22,520 --> 00:12:25,920
Speaker 1: it shouldn't surprise us that we see similar theories of

209
00:12:25,960 --> 00:12:30,600
Speaker 1: securities fraud being asserted. They did focus on social media

210
00:12:30,800 --> 00:12:34,480
Speaker 1: a lot, so it's a message there too that you know,

211
00:12:34,679 --> 00:12:41,160
Speaker 1: even on social media, you can't be exaggerating and giving misstatements. Absolutely,

212
00:12:41,280 --> 00:12:44,840
Speaker 1: and I think that they highlighted the fact that social

213
00:12:44,880 --> 00:12:49,920
Speaker 1: media is often accessed by you know, individual retail investors,

214
00:12:50,000 --> 00:12:52,520
Speaker 1: and this is a way that we know you can

215
00:12:52,640 --> 00:12:56,880
Speaker 1: communicate with a portion of the stock markets that previously

216
00:12:56,960 --> 00:13:00,720
Speaker 1: had been somewhat ignored, and you can get your message

217
00:13:00,760 --> 00:13:04,280
Speaker 1: out to retail investors. And if you're persuasive, as we

218
00:13:04,320 --> 00:13:06,760
Speaker 1: saw a year or two ago in the game Stop

219
00:13:06,800 --> 00:13:11,719
Speaker 1: in a MC, matters that if retail investors buy your

220
00:13:11,720 --> 00:13:14,960
Speaker 1: message on social media, they can really boost your stock price.

221
00:13:15,160 --> 00:13:17,680
Speaker 1: And you know that to me may also be another

222
00:13:17,840 --> 00:13:22,440
Speaker 1: argument prosecutors might make with respective materiality is that even

223
00:13:22,480 --> 00:13:25,079
Speaker 1: if we don't see an immediate impact with respect to

224
00:13:25,160 --> 00:13:28,719
Speaker 1: sophisticated traders. You know, social media may take a bit

225
00:13:28,760 --> 00:13:34,160
Speaker 1: of time for enthusiasm to sort of spread among different

226
00:13:34,160 --> 00:13:37,280
Speaker 1: members of social media as things get posted and reposted,

227
00:13:37,440 --> 00:13:40,080
Speaker 1: but over time it can have a very significant impact.

228
00:13:40,120 --> 00:13:42,720
Speaker 1: And we did see a search in the company stock

229
00:13:42,840 --> 00:13:46,440
Speaker 1: around the time these statements were made over social media.

230
00:13:47,320 --> 00:13:49,920
Speaker 1: So he's facing as many as twenty years in prison.

231
00:13:50,080 --> 00:13:53,240
Speaker 1: Do you have any feel for how much you'll get.

232
00:13:53,280 --> 00:13:56,440
Speaker 1: I doubt it. Yeah, I doubt it will be twenty

233
00:13:56,480 --> 00:13:58,360
Speaker 1: as well. You know, one of the things they may

234
00:13:58,440 --> 00:14:02,560
Speaker 1: look at his investor hall how much were investors harmed

235
00:14:03,080 --> 00:14:07,880
Speaker 1: by these misstatements. They may have examples of retail investors

236
00:14:07,880 --> 00:14:10,640
Speaker 1: to spend a lot of money when the stock was

237
00:14:10,679 --> 00:14:14,040
Speaker 1: trading at you know, ten, fifteen, twenty billion dollars and

238
00:14:14,360 --> 00:14:17,079
Speaker 1: lost almost all their money now that it is trading

239
00:14:17,080 --> 00:14:19,360
Speaker 1: at three dollars. And so I think one of the

240
00:14:19,400 --> 00:14:22,920
Speaker 1: things they may argue is that there was a significant

241
00:14:22,920 --> 00:14:25,960
Speaker 1: amount of market capitalization that was lost in the wake

242
00:14:26,080 --> 00:14:28,840
Speaker 1: of the fraud. And I think that sort of harm

243
00:14:29,040 --> 00:14:32,120
Speaker 1: can be relevant in terms of a sentence. You know,

244
00:14:32,160 --> 00:14:34,800
Speaker 1: I think defense will sort of portray him as somebody

245
00:14:34,840 --> 00:14:37,800
Speaker 1: who was over enthusiastic and he made a lot of

246
00:14:38,160 --> 00:14:44,800
Speaker 1: bad judgment calls and did he really intend to hurt people?

247
00:14:45,240 --> 00:14:46,920
Speaker 1: But I agree with you, I don't think it's going

248
00:14:46,960 --> 00:14:49,800
Speaker 1: to be the maximum penalty. Thanks so much for being

249
00:14:49,800 --> 00:14:52,760
Speaker 1: on the show of James D. Professor James Park of

250
00:14:52,920 --> 00:15:02,640
Speaker 1: u c l A Law School, y the American history

251
00:15:03,840 --> 00:15:07,880
Speaker 1: Champagne corks popped when an upstart labor union pulled off

252
00:15:07,920 --> 00:15:11,680
Speaker 1: a stunning upset at an Amazon facility on Staten Island

253
00:15:11,760 --> 00:15:15,640
Speaker 1: last April. Unions are seeing a resurgence in this country,

254
00:15:15,880 --> 00:15:19,680
Speaker 1: with workers at big name companies like Amazon, Starbucks, and

255
00:15:19,720 --> 00:15:23,640
Speaker 1: Apple voting to unionize. Management often tries to curb union

256
00:15:23,760 --> 00:15:28,520
Speaker 1: organizing with illegal tactics, despite a National Labor Relations Board

257
00:15:28,640 --> 00:15:32,760
Speaker 1: and an administration that's in labor's camp. The middle class

258
00:15:33,320 --> 00:15:37,720
Speaker 1: the middle class bill America. Everybody knows that, But unions

259
00:15:37,880 --> 00:15:42,280
Speaker 1: built the meddle class. That's a fact. My guest is

260
00:15:42,360 --> 00:15:47,000
Speaker 1: labor law expert Kate Andreas, a professor at Columbia Law School. Kate.

261
00:15:47,120 --> 00:15:50,760
Speaker 1: Some pro union employees seem to be trying something a

262
00:15:50,760 --> 00:15:54,920
Speaker 1: little different. A group of Starbucks employees in South Carolina

263
00:15:55,000 --> 00:15:59,080
Speaker 1: are suing the company for defamation over its response to

264
00:15:59,120 --> 00:16:03,400
Speaker 1: a union pro test. The employees accused Starbucks of falsely

265
00:16:03,440 --> 00:16:08,000
Speaker 1: and maliciously portraying them as criminals after they presented a

266
00:16:08,080 --> 00:16:11,360
Speaker 1: letter of demands to their store manager, and the store

267
00:16:11,440 --> 00:16:14,960
Speaker 1: manager then filed a police report. A defamation claim in

268
00:16:15,000 --> 00:16:18,560
Speaker 1: a union organizing effort is certainly unusual and got a

269
00:16:18,600 --> 00:16:21,680
Speaker 1: lot of attention, including from Senator Bernie Sanders. But is

270
00:16:21,720 --> 00:16:25,160
Speaker 1: it effective legally? Yeah, So the allegations in this case,

271
00:16:25,200 --> 00:16:30,000
Speaker 1: they're really pretty stunning. The employer apparently accused workers of

272
00:16:30,040 --> 00:16:33,200
Speaker 1: trying to kidnap him without any evidence, according to at

273
00:16:33,240 --> 00:16:37,000
Speaker 1: least report. So the workers seemed to be seeking to

274
00:16:37,080 --> 00:16:39,920
Speaker 1: pursue a defamation claim because that gives them more ability

275
00:16:39,960 --> 00:16:44,800
Speaker 1: to win remedies than proceeding under the National Labor Relations Act,

276
00:16:44,880 --> 00:16:48,720
Speaker 1: because state law includes greater penalties for violations of defamation

277
00:16:48,800 --> 00:16:52,120
Speaker 1: law than labor law allows. And I think their argument

278
00:16:52,200 --> 00:16:54,920
Speaker 1: is that the harm here is one that's more of

279
00:16:54,960 --> 00:16:58,320
Speaker 1: a sort of defamation rather than a labor violation. It's

280
00:16:58,320 --> 00:17:01,040
Speaker 1: not entirely clear whether the suit will be able to

281
00:17:01,080 --> 00:17:05,720
Speaker 1: go forward, because federal preemption doctrine does require that conduct

282
00:17:05,800 --> 00:17:09,080
Speaker 1: that is protected by the Act or prohibited by the

283
00:17:09,160 --> 00:17:12,880
Speaker 1: National Labor Relations Act must be resolved. Legal issues around

284
00:17:12,920 --> 00:17:15,639
Speaker 1: that must be resolved in the first instance, by the board.

285
00:17:16,480 --> 00:17:20,280
Speaker 1: Starbucks is a huge company. The union has prevailed and

286
00:17:20,359 --> 00:17:24,400
Speaker 1: around two hundred fifty of the company's nine thousand stores

287
00:17:24,800 --> 00:17:29,200
Speaker 1: and the unions filed numerous legal complaints with the National

288
00:17:29,280 --> 00:17:33,800
Speaker 1: Labor Relations Board. Do those complaints ever bring any kind

289
00:17:33,800 --> 00:17:37,679
Speaker 1: of resolution. I think what we're seeing with Starbucks is

290
00:17:37,720 --> 00:17:42,160
Speaker 1: that there's overwhelming interests among workers and organizing unions. Hundreds

291
00:17:42,160 --> 00:17:45,119
Speaker 1: of Starbucks stores in I think three dozen states have

292
00:17:45,160 --> 00:17:48,159
Speaker 1: had union elections, and this is really pretty stunning, given

293
00:17:48,200 --> 00:17:52,679
Speaker 1: that a year ago no Starbucks had the union, and

294
00:17:52,800 --> 00:17:57,000
Speaker 1: most of the vast majority of these have voted to unionize. Nonetheless,

295
00:17:57,119 --> 00:18:00,240
Speaker 1: what these workers are confronting at the legal regime that

296
00:18:00,320 --> 00:18:03,400
Speaker 1: really doesn't do a good job at protecting their rights.

297
00:18:03,400 --> 00:18:05,439
Speaker 1: And so what we see is that the employer has

298
00:18:05,480 --> 00:18:09,479
Speaker 1: engaged in a pattern of anti union activity, and the

299
00:18:09,520 --> 00:18:13,760
Speaker 1: penalties under the National Labor Relations Fact are really pretty minimal,

300
00:18:13,800 --> 00:18:17,800
Speaker 1: and so I think workers are looking to other tools

301
00:18:17,880 --> 00:18:20,560
Speaker 1: to try to make sure that their rights aren't violated.

302
00:18:21,080 --> 00:18:25,200
Speaker 1: It's Starbucks the best example of the pro union movement

303
00:18:25,480 --> 00:18:28,560
Speaker 1: of the workers. They are made the most progress. There's

304
00:18:28,600 --> 00:18:30,879
Speaker 1: a lot of areas where workers are organizing in the

305
00:18:30,960 --> 00:18:33,800
Speaker 1: last few years, and I think we see increased organizing

306
00:18:33,840 --> 00:18:38,800
Speaker 1: activity in the areas of healthcare, university workers, journalists, trader

307
00:18:38,880 --> 00:18:42,560
Speaker 1: does apple workers are I but Starbucks are certainly a

308
00:18:42,600 --> 00:18:45,919
Speaker 1: pretty dark example of how much interest there is across

309
00:18:45,960 --> 00:18:48,840
Speaker 1: the country among workers in organizing union so that they

310
00:18:48,840 --> 00:18:51,159
Speaker 1: can have a voice at the workplace, so that they

311
00:18:51,160 --> 00:18:54,680
Speaker 1: can address problems of low wages, um of not having

312
00:18:54,760 --> 00:18:58,240
Speaker 1: enough sick time, of just the vast range of concerns

313
00:18:58,240 --> 00:18:59,800
Speaker 1: that workers have that they want to have a voice

314
00:19:00,240 --> 00:19:03,840
Speaker 1: how the company addresses those problems, and Starbucks is a

315
00:19:03,920 --> 00:19:06,600
Speaker 1: good example of the rising interest in unions, particularly among

316
00:19:06,640 --> 00:19:10,480
Speaker 1: young people. Do you think the rising interest in unions

317
00:19:10,840 --> 00:19:17,440
Speaker 1: is in part sparked by concerns about health and economic

318
00:19:17,560 --> 00:19:20,760
Speaker 1: justice that arose during the pandemic, or is it, as

319
00:19:20,800 --> 00:19:24,800
Speaker 1: you say, more about young workers looking to protect their rights.

320
00:19:25,600 --> 00:19:28,040
Speaker 1: I think it's a combination of factors. I think for

321
00:19:28,080 --> 00:19:31,119
Speaker 1: the last few years, it's become increasingly clear that the

322
00:19:31,119 --> 00:19:34,840
Speaker 1: country has a really significant problem with economic inequality, and

323
00:19:34,920 --> 00:19:37,360
Speaker 1: people who are doing the work that makes things run

324
00:19:37,960 --> 00:19:42,119
Speaker 1: are not receiving their share of economic rewards. From that,

325
00:19:42,200 --> 00:19:45,560
Speaker 1: and that became particularly clear in the context of the pandemic,

326
00:19:45,600 --> 00:19:48,399
Speaker 1: where we had the workers who are considered essential and

327
00:19:48,440 --> 00:19:50,600
Speaker 1: they had to keep working were actually many of them

328
00:19:50,680 --> 00:19:53,720
Speaker 1: very low wage workers they think significant health and safety reacts.

329
00:19:54,119 --> 00:19:57,359
Speaker 1: So I think the pandemic did kind of highlight those

330
00:19:57,400 --> 00:20:01,320
Speaker 1: problems that already existed in the economy at increasing concerns

331
00:20:01,320 --> 00:20:03,720
Speaker 1: around health and safety. But then at the same time,

332
00:20:03,720 --> 00:20:06,120
Speaker 1: we have a generation of young people who are coming

333
00:20:06,160 --> 00:20:09,720
Speaker 1: into the workforce and recognizing that in order to make

334
00:20:09,760 --> 00:20:13,760
Speaker 1: their jobs better and to improve conditions um that organizing

335
00:20:14,440 --> 00:20:17,280
Speaker 1: collectively is the best route to do that. So studies

336
00:20:17,280 --> 00:20:20,639
Speaker 1: show that seventy one percent of Americans now approve of

337
00:20:20,760 --> 00:20:22,800
Speaker 1: labor unions and the majority would like to have a

338
00:20:22,880 --> 00:20:25,119
Speaker 1: union if they could, which is the highest since has

339
00:20:25,160 --> 00:20:29,840
Speaker 1: been since nineteen and I remember we spoke when the

340
00:20:29,960 --> 00:20:34,240
Speaker 1: upstart union Amazon Labor Union won that election at a

341
00:20:34,280 --> 00:20:38,359
Speaker 1: facility in Staten Island. Now the group has had a

342
00:20:38,440 --> 00:20:40,679
Speaker 1: second defeat in a row. As far as you know,

343
00:20:40,840 --> 00:20:45,719
Speaker 1: workers voting to unionize. With these union fights, it seems

344
00:20:45,760 --> 00:20:49,560
Speaker 1: like it's one step forward, two steps back. Yeah. I

345
00:20:49,600 --> 00:20:52,560
Speaker 1: don't think the issue is that workers don't want unions, because,

346
00:20:52,600 --> 00:20:55,840
Speaker 1: as I said, there's really overwhelming evidence and increasing studies

347
00:20:55,840 --> 00:20:58,280
Speaker 1: showing that the vast majority of workers would like to

348
00:20:58,280 --> 00:21:00,600
Speaker 1: have a union if they could. But the problem is

349
00:21:00,640 --> 00:21:04,600
Speaker 1: that the obstacles to winning a union really significant. So

350
00:21:04,760 --> 00:21:12,000
Speaker 1: employers routinely engage in extensive anti union campaigning during union campaigns.

351
00:21:12,240 --> 00:21:14,280
Speaker 1: Some of this is in violation of the law, and

352
00:21:14,359 --> 00:21:16,040
Speaker 1: some of it is not in violation of the law,

353
00:21:16,040 --> 00:21:18,920
Speaker 1: but it sends a very clear message to workers that

354
00:21:19,000 --> 00:21:21,239
Speaker 1: they should not organize and that their jobs are at

355
00:21:21,320 --> 00:21:24,120
Speaker 1: risk if they organized, and that makes it very hard

356
00:21:24,160 --> 00:21:26,600
Speaker 1: to win unions. When you ask that the fact that

357
00:21:27,000 --> 00:21:32,000
Speaker 1: many employers, even once workers win unions, resist negotiating contracts,

358
00:21:32,359 --> 00:21:35,480
Speaker 1: and the legal remedies for that are very minimal, you

359
00:21:35,520 --> 00:21:39,080
Speaker 1: can understand why it's been so hard for workers to

360
00:21:39,840 --> 00:21:42,840
Speaker 1: organize and to win contracts, notwithstanding that they have the

361
00:21:42,920 --> 00:21:44,879
Speaker 1: legal right to do so. I think it really just

362
00:21:45,000 --> 00:21:48,960
Speaker 1: highlights the need for labor law reform in this area. Yeah,

363
00:21:49,000 --> 00:21:52,640
Speaker 1: because that Amazon union, the Staten Island facility, they still

364
00:21:52,680 --> 00:21:56,439
Speaker 1: haven't gotten a contract, and the president of the union

365
00:21:56,560 --> 00:22:01,640
Speaker 1: said that at the warehouse near Albany, Amazon subjected workers

366
00:22:01,680 --> 00:22:06,160
Speaker 1: to intimidation and retaliation on a daily basis. They file

367
00:22:06,280 --> 00:22:12,359
Speaker 1: dozens of unfair labor practice complaints with the n l

368
00:22:12,480 --> 00:22:15,439
Speaker 1: r B. Is that par for the course for these

369
00:22:15,560 --> 00:22:19,760
Speaker 1: big companies? What can they do and what can't they do?

370
00:22:19,840 --> 00:22:25,160
Speaker 1: Where's the line between intimidation and holding those meetings called

371
00:22:25,280 --> 00:22:29,160
Speaker 1: captive audience meetings? Yeah, they're called that because essentially they're

372
00:22:29,200 --> 00:22:33,720
Speaker 1: requiring employees to attend these meetings as a condition of employments.

373
00:22:33,840 --> 00:22:37,040
Speaker 1: Of the employee declines to, they can be terminated. So

374
00:22:37,040 --> 00:22:39,359
Speaker 1: where's the line. Well, the Nationally Or Relations Act the

375
00:22:39,480 --> 00:22:43,399
Speaker 1: text employers right to compagne against unions, but it doesn't

376
00:22:43,400 --> 00:22:45,560
Speaker 1: allow them to do so in a way that is coursive.

377
00:22:46,240 --> 00:22:50,080
Speaker 1: They can't threaten workers for organizing unions. The problem is

378
00:22:50,160 --> 00:22:53,360
Speaker 1: that the line is often hard to draw, and workers

379
00:22:53,359 --> 00:22:57,760
Speaker 1: often hear something as a threat. Because of the employment relationship,

380
00:22:57,920 --> 00:23:00,760
Speaker 1: they know that they can be the from principles that

381
00:23:00,800 --> 00:23:03,119
Speaker 1: they can be fired for any reason or no reason

382
00:23:03,200 --> 00:23:07,359
Speaker 1: at all, and so frequently um there's a debate about

383
00:23:07,480 --> 00:23:11,120
Speaker 1: or litigation over whether a statement is a threat or

384
00:23:11,240 --> 00:23:15,320
Speaker 1: or just an opinion. And even when employers are found

385
00:23:15,359 --> 00:23:18,800
Speaker 1: to have committed unfairly for practices to either have threatened

386
00:23:18,800 --> 00:23:23,120
Speaker 1: workers to have fired workers for organizing unions have easigally

387
00:23:23,160 --> 00:23:26,960
Speaker 1: disciplined workers for organizing unions. The problem is that the

388
00:23:27,040 --> 00:23:30,200
Speaker 1: penalties for doing any of that are so minimal that

389
00:23:30,280 --> 00:23:34,560
Speaker 1: it's often in employers interests or they deem it to

390
00:23:34,600 --> 00:23:37,000
Speaker 1: be within their economic interests to go ahead and violate

391
00:23:37,040 --> 00:23:40,320
Speaker 1: the law because that can displayed workers from organizing unions

392
00:23:40,400 --> 00:23:43,000
Speaker 1: and the penalties that they will be faced with are

393
00:23:43,119 --> 00:23:47,120
Speaker 1: very minimal. These votes are all secret votes, right, so

394
00:23:47,320 --> 00:23:51,800
Speaker 1: the company doesn't know which way any particular workers voting.

395
00:23:52,520 --> 00:23:55,520
Speaker 1: That's true, Um, these are all secret ballot votes. The

396
00:23:55,520 --> 00:23:58,040
Speaker 1: problem is that over the course of a union campaign,

397
00:23:58,400 --> 00:24:01,040
Speaker 1: workers frequently become a friend aid because of all the

398
00:24:01,080 --> 00:24:04,199
Speaker 1: things that their employer has done or said that if

399
00:24:04,240 --> 00:24:06,639
Speaker 1: they do organize the union, things will actually get worse.

400
00:24:07,000 --> 00:24:10,640
Speaker 1: And in fact, because employers violate the law, they are

401
00:24:10,720 --> 00:24:14,360
Speaker 1: often able to coerce workers in that in that way.

402
00:24:14,440 --> 00:24:17,720
Speaker 1: So how big a setback is it for the Amazon

403
00:24:17,840 --> 00:24:21,320
Speaker 1: Labor Union to have to no votes in a row.

404
00:24:21,760 --> 00:24:25,000
Speaker 1: I think it is a setback, and it will probably

405
00:24:25,040 --> 00:24:28,040
Speaker 1: require them to go back and think more about their

406
00:24:28,160 --> 00:24:32,120
Speaker 1: organizing strategy. But I don't think it changes the underlying reality,

407
00:24:32,200 --> 00:24:36,720
Speaker 1: which is that Amazon workers have deep desire to change

408
00:24:36,760 --> 00:24:41,400
Speaker 1: their conditions. They are very low paid, they work under

409
00:24:41,560 --> 00:24:44,879
Speaker 1: very time constraints or often punished for any idle time.

410
00:24:45,200 --> 00:24:49,200
Speaker 1: There's significant health and safety problems at these warehouses, and

411
00:24:49,880 --> 00:24:53,840
Speaker 1: the desire to change conditions among workers will remain. And

412
00:24:53,880 --> 00:24:56,040
Speaker 1: so I think that there will be continue to be

413
00:24:56,160 --> 00:24:59,600
Speaker 1: organizing the activity and continue to be union successes. It

414
00:24:59,760 --> 00:25:03,240
Speaker 1: just is going to require additional legal work and challenging

415
00:25:03,280 --> 00:25:08,160
Speaker 1: the unfairly practices of Amazon and additional organizing. Kate, how

416
00:25:08,200 --> 00:25:11,800
Speaker 1: long will it take for that Staten Island union to

417
00:25:11,920 --> 00:25:16,880
Speaker 1: get a contract? Well, it depends on both how well

418
00:25:16,920 --> 00:25:19,360
Speaker 1: those workers are able to stay organized and how much

419
00:25:19,359 --> 00:25:22,360
Speaker 1: economic and public pressure they're able to bring to bear

420
00:25:22,400 --> 00:25:25,840
Speaker 1: against the company. There's no deadline for reaching our contract.

421
00:25:26,200 --> 00:25:28,480
Speaker 1: One of the possible labor law reforms that has been

422
00:25:28,520 --> 00:25:32,480
Speaker 1: considered is to require that a first contract goes through

423
00:25:33,040 --> 00:25:35,639
Speaker 1: mediation or even arbitration in order to make sure that

424
00:25:35,680 --> 00:25:38,200
Speaker 1: a fair contract is reached. But our current law does

425
00:25:38,240 --> 00:25:40,720
Speaker 1: not require that. So the workers need to bring to

426
00:25:40,800 --> 00:25:44,520
Speaker 1: bear public pressure and economic pressure on the company to

427
00:25:44,560 --> 00:25:47,360
Speaker 1: try to convince it to negotiate as it is required

428
00:25:47,400 --> 00:25:50,239
Speaker 1: to do under the law. Another thing that's happening is

429
00:25:50,280 --> 00:25:53,800
Speaker 1: that for this month, Starbucks and Apple were hit with

430
00:25:53,960 --> 00:25:59,480
Speaker 1: shareholder proposals that call for labor rights audits after complaints

431
00:25:59,480 --> 00:26:02,720
Speaker 1: by workers that the company has been trying to curb

432
00:26:02,840 --> 00:26:06,879
Speaker 1: union organizing, and Amazon and Tesla were hit with similar

433
00:26:06,880 --> 00:26:12,800
Speaker 1: proposals less proxy season. So is this another way to

434
00:26:12,920 --> 00:26:16,840
Speaker 1: try to put pressure on these companies? Yeah? I think

435
00:26:16,840 --> 00:26:21,600
Speaker 1: what those proposals reflected a growing realization among shareholders that

436
00:26:21,760 --> 00:26:25,080
Speaker 1: there are companies violation of the law and anti union

437
00:26:25,160 --> 00:26:29,040
Speaker 1: campaigning is in contradiction with the what the brands claimed

438
00:26:29,080 --> 00:26:31,439
Speaker 1: to be and it can actually hurt the company. And

439
00:26:31,480 --> 00:26:35,159
Speaker 1: it's another way to try to hold companies accountable and

440
00:26:35,359 --> 00:26:39,640
Speaker 1: for following the law and for being good corporate system. Yes,

441
00:26:39,640 --> 00:26:44,800
Speaker 1: so a may proposal at Amazon secured of independent voters

442
00:26:44,880 --> 00:26:48,440
Speaker 1: and thirty eight point nine percent in total. What strikes

443
00:26:48,480 --> 00:26:52,240
Speaker 1: me is that you have investors, this many investors wanting

444
00:26:52,320 --> 00:26:55,640
Speaker 1: to support unions, and then you have Amazon with all

445
00:26:55,720 --> 00:26:59,480
Speaker 1: these anti union tactics at the same time. Does it

446
00:26:59,520 --> 00:27:01,919
Speaker 1: come from the top, does it come from you know,

447
00:27:02,080 --> 00:27:07,040
Speaker 1: lower levels of management? Is it organized union busting? Yeah?

448
00:27:07,080 --> 00:27:10,760
Speaker 1: So I can't speak specifically to Amazon, but in general.

449
00:27:11,640 --> 00:27:16,000
Speaker 1: Typically when there is a significant anti union campaign, it's

450
00:27:16,040 --> 00:27:19,359
Speaker 1: coming from the top, and it's a company decision to

451
00:27:19,720 --> 00:27:23,800
Speaker 1: try to coerce workers against joining union UM and so

452
00:27:23,840 --> 00:27:27,480
Speaker 1: I think the more public pressure is brought to their

453
00:27:27,600 --> 00:27:31,960
Speaker 1: either through shareholders, through the media, through worker activity, through

454
00:27:32,000 --> 00:27:36,040
Speaker 1: community activity, trying to call upon employers to respect workers

455
00:27:36,119 --> 00:27:38,480
Speaker 1: rights to organize, the more that that can help to

456
00:27:38,640 --> 00:27:44,080
Speaker 1: change employer behavior. That along with law reforms, and even

457
00:27:44,119 --> 00:27:49,280
Speaker 1: without statutory reform, This current National Labor Relations Board and

458
00:27:49,320 --> 00:27:51,920
Speaker 1: the current General Council at the Board is working very

459
00:27:52,080 --> 00:27:55,040
Speaker 1: hard to try to enforce and make real the promise

460
00:27:55,119 --> 00:27:58,040
Speaker 1: of the statute. So the General Council at the National

461
00:27:58,080 --> 00:28:02,119
Speaker 1: Abor Relations Board has been per doing very aggressively violations

462
00:28:02,160 --> 00:28:04,440
Speaker 1: of the law in order to try to stop this

463
00:28:04,680 --> 00:28:09,320
Speaker 1: kind of anti union illegal behavior by companies like Starbucks

464
00:28:09,320 --> 00:28:12,440
Speaker 1: and Amazon. I've been talking to Columbia Law School professor

465
00:28:12,520 --> 00:28:16,600
Speaker 1: Kate Andreas about the resurgence in unions. Is there any

466
00:28:16,680 --> 00:28:20,359
Speaker 1: move in Congress to change the labor laws. There is

467
00:28:20,400 --> 00:28:23,560
Speaker 1: a bill pending in Congress and it does have significant support,

468
00:28:23,840 --> 00:28:27,399
Speaker 1: but unless the filibuster is removed, it's unlikely that it

469
00:28:27,440 --> 00:28:30,119
Speaker 1: will pass. But that bill would make it easier for

470
00:28:30,160 --> 00:28:34,240
Speaker 1: workers to organize unions, and it would increase penalties on

471
00:28:34,400 --> 00:28:37,000
Speaker 1: employers who violate the law. It would also make it

472
00:28:37,000 --> 00:28:39,120
Speaker 1: easier to win first contracts, So it would be a

473
00:28:39,160 --> 00:28:42,520
Speaker 1: really significant improvement and enable the workers who do want

474
00:28:42,520 --> 00:28:45,320
Speaker 1: to have unions to achieve them. Tell us about the

475
00:28:45,440 --> 00:28:49,200
Speaker 1: union case the Supreme Court just decided to take up

476
00:28:49,240 --> 00:28:53,640
Speaker 1: for this term. Essentially, it involves a strike that occurred

477
00:28:54,040 --> 00:28:56,320
Speaker 1: and it's kind of the inverse of the defamation pace

478
00:28:56,400 --> 00:29:01,360
Speaker 1: involving Starbucks, an employer's food teamsters or workers for their

479
00:29:01,400 --> 00:29:05,120
Speaker 1: behavior during a strike under state law, and is seeking

480
00:29:05,320 --> 00:29:08,400
Speaker 1: to have that to go forward, which would impose significant

481
00:29:08,680 --> 00:29:11,800
Speaker 1: penalties on the union. The union argued that the state

482
00:29:11,880 --> 00:29:15,280
Speaker 1: lawsuit was preempted and therefore they couldn't be subject to

483
00:29:15,320 --> 00:29:18,120
Speaker 1: get damages, and they won at the lower court, but

484
00:29:18,160 --> 00:29:20,400
Speaker 1: this Preme Court just granted it. So there's some question

485
00:29:20,440 --> 00:29:23,880
Speaker 1: about whether the court will change the law regarding preemption

486
00:29:24,040 --> 00:29:26,960
Speaker 1: and make it easier for state lawsuits to go forward.

487
00:29:27,360 --> 00:29:29,880
Speaker 1: That would make it easier, potentially for the Starbucks workers

488
00:29:29,920 --> 00:29:32,960
Speaker 1: in the defination case to proceed, but it also would

489
00:29:32,960 --> 00:29:36,239
Speaker 1: make it a lot easier for employers to bring actions

490
00:29:36,280 --> 00:29:40,880
Speaker 1: against workers who engage in drug activity under state tourt

491
00:29:40,960 --> 00:29:44,960
Speaker 1: law or state property law. The Supreme Court in recent

492
00:29:45,120 --> 00:29:48,080
Speaker 1: years has not been I'll say, has not been particularly

493
00:29:48,160 --> 00:29:51,760
Speaker 1: kind to unions, particularly supportive of unions. Well, of course,

494
00:29:51,760 --> 00:29:54,720
Speaker 1: there was the big union case for the Janis case,

495
00:29:54,800 --> 00:29:58,320
Speaker 1: and then there was the case about farm workers in California.

496
00:29:58,720 --> 00:30:01,040
Speaker 1: Court has issued a theory is of cases in recent

497
00:30:01,120 --> 00:30:04,600
Speaker 1: years that are both hostile to unions and also to workers.

498
00:30:04,600 --> 00:30:09,080
Speaker 1: So one example was the Jans case, which made it

499
00:30:09,320 --> 00:30:13,920
Speaker 1: impossible for state employers um to agree with their unions

500
00:30:14,040 --> 00:30:16,960
Speaker 1: to have fair share fees, where all workers who benefit

501
00:30:17,000 --> 00:30:19,800
Speaker 1: from a contract have to pay union use their fees.

502
00:30:19,920 --> 00:30:22,640
Speaker 1: The court ruled that as a matter of the First Amendment,

503
00:30:23,040 --> 00:30:26,040
Speaker 1: that is unconstitutional to have fair share fees, and all

504
00:30:26,080 --> 00:30:29,080
Speaker 1: public sector workers have to be open shop or right

505
00:30:29,160 --> 00:30:31,600
Speaker 1: to work, meaning you can be covered by union contract

506
00:30:31,600 --> 00:30:33,840
Speaker 1: and get the benefits of a union contract but not

507
00:30:33,960 --> 00:30:38,360
Speaker 1: have to pay any contributions towards representation and bargaining. There

508
00:30:38,440 --> 00:30:41,600
Speaker 1: was that case. Then there was another case recently that

509
00:30:41,760 --> 00:30:46,000
Speaker 1: held that a California state law that gave organizers the

510
00:30:46,120 --> 00:30:49,320
Speaker 1: right to enter firm to talk to farm workers on

511
00:30:49,320 --> 00:30:52,120
Speaker 1: a pretty minimal basis every now and then, but in

512
00:30:52,200 --> 00:30:55,840
Speaker 1: order to enable the organizers have access to farm workers

513
00:30:55,840 --> 00:30:58,400
Speaker 1: who often live on farms and are difficult to um

514
00:30:58,880 --> 00:31:03,200
Speaker 1: to organize, the court will get that constituted at taking

515
00:31:03,640 --> 00:31:07,760
Speaker 1: an illegal taking of property and violated the Fifth Amendment.

516
00:31:08,120 --> 00:31:10,080
Speaker 1: And the Court is also if a number of cases

517
00:31:10,160 --> 00:31:12,960
Speaker 1: that limit workers right. So, for example, it help that

518
00:31:13,320 --> 00:31:16,920
Speaker 1: employees could be required to waive their right to proceed

519
00:31:17,360 --> 00:31:21,560
Speaker 1: in class actions or collective actions through mandatory arbitration agreements,

520
00:31:21,760 --> 00:31:24,560
Speaker 1: even though the National Labor Relations Act says that workers

521
00:31:24,560 --> 00:31:27,800
Speaker 1: have the right to act collectively. And in all of

522
00:31:27,840 --> 00:31:31,920
Speaker 1: these cases that were very vociferous defense, including defense that

523
00:31:32,000 --> 00:31:34,880
Speaker 1: expressed a worry that the Court is returned into the

524
00:31:35,080 --> 00:31:38,760
Speaker 1: kind of legal positions that it held in the early

525
00:31:38,800 --> 00:31:41,560
Speaker 1: part of the twentieth century, where it routinely struck down

526
00:31:41,600 --> 00:31:44,760
Speaker 1: laws that benefited workers. So why do you think the

527
00:31:44,800 --> 00:31:48,680
Speaker 1: court is taking this particular case. It's always hard to

528
00:31:48,720 --> 00:31:51,920
Speaker 1: know why a case gets granted. Um. In this case,

529
00:31:52,000 --> 00:31:55,240
Speaker 1: the employer argued um that there was a circuit split

530
00:31:55,400 --> 00:31:57,480
Speaker 1: or a split among the lower court. And so that's

531
00:31:57,520 --> 00:32:00,440
Speaker 1: one reason why the court often takes a case. And

532
00:32:00,440 --> 00:32:03,080
Speaker 1: and so one possibility is that the Court is just

533
00:32:03,120 --> 00:32:06,920
Speaker 1: going to use this to clarify the longstanding preemption doctrine.

534
00:32:07,320 --> 00:32:10,680
Speaker 1: There is a worry, however, that given how conservative and

535
00:32:10,840 --> 00:32:14,360
Speaker 1: anti worker some of the justices on the Court have

536
00:32:14,560 --> 00:32:17,200
Speaker 1: been in the past, that they might use this case

537
00:32:17,600 --> 00:32:20,720
Speaker 1: to make it harder for workers to engage in collective

538
00:32:20,760 --> 00:32:24,640
Speaker 1: action and expose them to additional penalties under state law.

539
00:32:25,280 --> 00:32:27,600
Speaker 1: I don't know about this recent case, but you know,

540
00:32:27,600 --> 00:32:31,480
Speaker 1: a lot of these cases, the plaintiffs aren't paying their

541
00:32:31,480 --> 00:32:34,840
Speaker 1: own legal fees. A lot of these cases are part

542
00:32:34,840 --> 00:32:38,400
Speaker 1: of a broader strategy to limit the ability of the

543
00:32:38,440 --> 00:32:41,720
Speaker 1: government to protect workers and consumers and the environment. And

544
00:32:41,800 --> 00:32:44,240
Speaker 1: so you know, even the case last year about the

545
00:32:44,360 --> 00:32:46,800
Speaker 1: e g as ability is kind of part of the

546
00:32:46,840 --> 00:32:49,360
Speaker 1: same kind of broader campaign to limit the ability of

547
00:32:49,400 --> 00:32:53,800
Speaker 1: government to regulate corporations in ways that protect ordinary citizens.

548
00:32:53,920 --> 00:32:56,360
Speaker 1: Um and so you know, yeah, there are individual workers

549
00:32:56,360 --> 00:32:57,840
Speaker 1: here and there who might not want to pay union

550
00:32:57,880 --> 00:33:00,120
Speaker 1: do but the drive to kind of achieve right to

551
00:33:00,200 --> 00:33:03,120
Speaker 1: work or the effort to expand the takings pause, it's

552
00:33:03,120 --> 00:33:05,840
Speaker 1: really not driven so much by you know, individual agreece

553
00:33:05,880 --> 00:33:08,520
Speaker 1: citizens or workers, but rather by a broader adgenda to

554
00:33:08,760 --> 00:33:12,120
Speaker 1: weekend government's ability to protect workers and consumers and to

555
00:33:12,160 --> 00:33:15,080
Speaker 1: protect the environment. Thanks so much for your insights, Kate.

556
00:33:15,360 --> 00:33:19,200
Speaker 1: That's Professor Kate Andreas of Columbia Law School, and that's

557
00:33:19,240 --> 00:33:21,840
Speaker 1: it for this edition of The Bloomberg Law Show. Remember

558
00:33:21,880 --> 00:33:23,959
Speaker 1: you can always get the latest legal news on our

559
00:33:24,000 --> 00:33:28,120
Speaker 1: Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify,

560
00:33:28,320 --> 00:33:33,360
Speaker 1: and at www dot bloomberg dot com, slash podcast, Slash Law,

561
00:33:33,760 --> 00:33:36,400
Speaker 1: and remember to tune into The Bloomberg Law Show every

562
00:33:36,400 --> 00:33:39,880
Speaker 1: week night at ten pm Wall Street Time. I'm June

563
00:33:39,880 --> 00:33:42,080
Speaker 1: Grosso and you're listening to Bloomberg