Speaker 1: This is Bloombird Law with June Bresso from Bloomberg Radio,
Speaker 1: and this truck will come to market. I can promise
Speaker 1: you that for every doubt or out there that said
Speaker 1: that there's no way this is true. Absolutely, how can
Speaker 1: that be possible, We've done it. It's my pleasure to
Speaker 1: actually let you guys enjoy the night. See the truck. No,
Speaker 1: it's real. Touch at feel how sturdy it is. You're
Speaker 1: gonna see that this is a real truck. This is
Speaker 1: not a pusher. Trevor Milton might have convinced investors that
Speaker 1: his company had built the truck of the future, a
Speaker 1: zero emissions game changer, but he couldn't convince a jury.
Speaker 1: After less than a day of deliberations, a Manhattan jury
Speaker 1: convicted Milton of securities fraud and wire fraud for enticing
Speaker 1: investors to buy Nicolas shares with lies about technology that
Speaker 1: didn't exist, a stunning downfall for the door to door
Speaker 1: salesman turned billionaire who promised to revolutionize the auto industry.
Speaker 1: My guest is securities law expert James Park, a professor
Speaker 1: or at u c l A Law school. James. The
Speaker 1: Justice Department is trying to crack down on corporate crime,
Speaker 1: and they certainly put a lot into this four week trial. Yeah,
Speaker 1: I think so. I think there was a lot to
Speaker 1: put on. There were a lot of different misrepresentations, and
Speaker 1: I think for each of them you have to be
Speaker 1: very careful to establish just exactly what was said and
Speaker 1: what was the actual truth at the time. And I
Speaker 1: think you have to tell a story for each and
Speaker 1: every one of them. And I think the strength of
Speaker 1: the case, to me is not on any single misrepresentation,
Speaker 1: but the whole, the collective full of all four or
Speaker 1: five of them, when you add them up, I think
Speaker 1: that's where you get the criminal securities fraud. And I
Speaker 1: think it was also important that they put on evidence
Speaker 1: from insiders, people who worked at the company, who testified
Speaker 1: that you know, we tried to intervene. We tried to
Speaker 1: tell him you're not telling the truth, and so he
Speaker 1: can't just argue that, well, I just made a bunch
Speaker 1: of mistakes. They intervened and said that you are making
Speaker 1: false statements about material fact. There's also you know, some
Speaker 1: testimony about at some point they tried to lock him
Speaker 1: out of the social media accounts, and so this was
Speaker 1: not a situation where you have a single mistake by
Speaker 1: an important figure in the corporation. This is a pattern
Speaker 1: and practice that was occurring over a number of years
Speaker 1: and accelerated during a critical period in the company's life
Speaker 1: when it was a newly public corporation. And so I
Speaker 1: think that's why we have this four week case. So
Speaker 1: the defense seemed to be two prong one that he
Speaker 1: didn't have intent, he didn't mean to deceive potential investors,
Speaker 1: and in any case, his statements weren't material. And the
Speaker 1: defense attorney sort of comparative in the closing he said,
Speaker 1: you know, they're gonna have to go after the Energizer
Speaker 1: bunny after this. In other words, it was like puffery.
Speaker 1: It wasn't an intent to deceive. Yeah, I remember hearing
Speaker 1: the Energizer bunny prayed. I had to laugh a little
Speaker 1: at that. But you know, Energizer batteries work. They worked
Speaker 1: pretty well, and so you know, fundamentally the product works
Speaker 1: and has been tested and is reliable. And even if
Speaker 1: they have sort of a funny way of showing that,
Speaker 1: you know, there's nothing factually incorrect about the Energizer body
Speaker 1: as far as I know, And in this situation, it's
Speaker 1: not really puff free. When you are misstating very particularized fact.
Speaker 1: You know, he's saying we're producing hydrogen at four dollars
Speaker 1: a gallon at a time when it's selling for sixteen
Speaker 1: dollars a gallon. That's not true. They were not producing
Speaker 1: hydrogen at all. And so you know, when you get
Speaker 1: that specific court generally will say that's not toughery, that's
Speaker 1: a factual misstatement. And you know, he's saying, we produced
Speaker 1: this badger truck using our components from the ground up,
Speaker 1: and implying that they have developed the technology, is their
Speaker 1: proprietor very technology, when in fact they're using third party sources.
Speaker 1: And they're saying we have all of these binding contracts,
Speaker 1: and in the interview he specifically corrects the interview to
Speaker 1: clarify that the contracts are binding, when in fact they
Speaker 1: are not binding and to be canceled in any time.
Speaker 1: These are all fact you know, one or two of them.
Speaker 1: Maybe you could sort of say, you know, he's just
Speaker 1: making mistakes and doesn't have an intense or to see.
Speaker 1: But when we get some multiple misstatements of factual information
Speaker 1: like this, I think it's very very difficult to conclude
Speaker 1: that this was not without deceptive intent, and so I
Speaker 1: think that if you look at the case as a
Speaker 1: whole and it's strong now the materiality point, you know,
Speaker 1: that's always an issue, a very important issue for any
Speaker 1: securities fraud case. Are the misstatements material are the importance
Speaker 1: to investors. And they put on a witness who said
Speaker 1: that for each of these individual statements, we didn't really
Speaker 1: see an immediate soft price reaction. But you know, to me,
Speaker 1: I think the materiality would be in the story that's
Speaker 1: told as a whole, with all of the mis statements
Speaker 1: together over time, that collectively they must have had an
Speaker 1: impact on the company stock price, which did increase exponentially
Speaker 1: over time during the period um when he was making
Speaker 1: these misstatements. And so I think that materiality here, in
Speaker 1: my view, is is satisfied when you look at the
Speaker 1: misstatements collectively as a whole um the mis statements creates
Speaker 1: portrayal of a company that has finished products that are
Speaker 1: soon to be rolled out, and that simply was not true.
Speaker 1: The defense only put on one witness, and that was
Speaker 1: to the materiality. Obviously, a defendant doesn't have to take
Speaker 1: the stand in his own defense, but in this case,
Speaker 1: did it sort of cry out for him to take
Speaker 1: the stand. I mean, he has no criminal background that
Speaker 1: a lot of defendants are worried about if they take
Speaker 1: the stand. Obviously, he's a good talker. Why wouldn't he
Speaker 1: take the stand to try to deflect some of this?
Speaker 1: I think it would have been tough for him to
Speaker 1: defend his statement, you know, even with preparation. I think
Speaker 1: that he would have had to find some some evidence,
Speaker 1: something to back up his statements. And I think that
Speaker 1: that evidence simply did not exist. That he was saying
Speaker 1: things that were false. And so I think that if
Speaker 1: he had to come up and explain why he was
Speaker 1: saying what he was saying, I think that the prosecutors
Speaker 1: would have cross examined him and made a lot of
Speaker 1: significant points. And so I think that, you know, given
Speaker 1: that he did not testify, I think that there there
Speaker 1: may not have been sufficient evidence to back up the
Speaker 1: statements that he made. So prosecutors presented evidence that he
Speaker 1: spent more than eighty million dollars in six months during
Speaker 1: you know, the Gulf Stream jet, the multimillion dollar home,
Speaker 1: and the turks and kid goes. How is that relevant?
Speaker 1: Doesn't that just turn a jury against a defendant? It's
Speaker 1: a good question. You know, I think it may speak
Speaker 1: to motives, and I think the strongest security fraud cases
Speaker 1: are broad against individual executives when they have a motive
Speaker 1: to personally enrich themselves. You know, this is what we
Speaker 1: see in en Rod with Jeff Skilling and World Colm
Speaker 1: with Bernie ebers Jeff Skilling sells tens of billions of
Speaker 1: dollars worth of stock in in the months before the
Speaker 1: restatements that were made by ed Ron. Bernie Eberts had
Speaker 1: hundreds of millions of dollars in loans that were backed
Speaker 1: by World Tom Stock. And so to get at a
Speaker 1: individual executive. To bring a case against an individual executive,
Speaker 1: I think you have a stronger case when there is
Speaker 1: a motive to inflate the stock price. And I think
Speaker 1: that the spending would be relevant because it would show
Speaker 1: why he had an incentive or a special incentive beyond
Speaker 1: the normal corporate founder or executive to boost the company's
Speaker 1: stock price. And another piece of evidence that came out
Speaker 1: is that he negotiated a shorter lock up period. He
Speaker 1: wanted to sell his stock six months after the I
Speaker 1: p O instead of a year. And I think that
Speaker 1: um is also a piece of evidence that may indicate that,
Speaker 1: you know, he may have some financial reason to boost
Speaker 1: the company stock so that he can get out as
Speaker 1: quickly as possible. And so I think it's fair game
Speaker 1: to make allegations like that in the context of a
Speaker 1: security sproad case, because you know, there is second circuit
Speaker 1: precedent which says that individual Enrichmond is relevant on the
Speaker 1: question of whether somebody acted with fraudulent intent, and so
Speaker 1: I think that this is well within the bounds of
Speaker 1: proper evidence for the prosecution to int So outside the courthouse,
Speaker 1: Milton said, I did nothing wrong. I was talking about
Speaker 1: the business plan. He still has hundreds of millions of dollars,
Speaker 1: and obviously they'll be appeals ahead. His attorney said they
Speaker 1: were going to keep on fighting, but appeals are an
Speaker 1: uphill battle. Was there any obvious error trial error that
Speaker 1: they can use here. I didn't see an obvious arrah.
Speaker 1: Others may have, but I did not see an obvious error.
Speaker 1: Do they have a chance on the materiality argument. I
Speaker 1: think it's a long shot. I don't think it's a
Speaker 1: zero percent probability. I think they will raise the materiality arguments,
Speaker 1: and I think that maybe the best arguments they have
Speaker 1: because I think it's fairly clear that these statements are false,
Speaker 1: and that there are multiple statements, and you know, you
Speaker 1: can always make an argument about deceptive intent, about fraudulent intent.
Speaker 1: But I think the prosecution made a very strong case,
Speaker 1: and I think if you look at the misstatements as
Speaker 1: a whole, they are material, a real and given that
Speaker 1: they happened multiple times after warnings, I think it's hard
Speaker 1: for him to argue that he's acting in good faith.
Speaker 1: I think that he knew as a executive chairman of
Speaker 1: a public corporation that he has an obligation to tell
Speaker 1: the truth when he's speaking to the public. Yeah. So,
Speaker 1: the U S Attorney for Manhattan, Damian Williams, said the
Speaker 1: case is a warning to anyone who plays fast and
Speaker 1: loose with the truth to get investors to part with
Speaker 1: their money. So does this case have ramifications beyond this trial?
Speaker 1: I think it does. I mean, I think in some
Speaker 1: ways you can see this as a continuation of the
Speaker 1: effort in the Farahness case, Right Sarahnes involved similar types
Speaker 1: of material misrepresentations with respect to the development of a product.
Speaker 1: It was in the context of a private corporation, and
Speaker 1: I think the next step is a company like this
Speaker 1: which is newly public had been acquired by a spac
Speaker 1: And my think that this sort of builds on the
Speaker 1: lesson of seranists. In my view that if you are
Speaker 1: relatively new technology company, that you have to tell the
Speaker 1: truth about your products. Given how important these sorts of
Speaker 1: companies are to our economy, given the activity we still
Speaker 1: have with respect to entrepreneurial companies, I think that founders
Speaker 1: and management teams of these companies should be very careful
Speaker 1: and take note of both of these cases, take a
Speaker 1: very careful look at the sorts of problems that arose
Speaker 1: when you make factual misstatements. This will hopefully improve the
Speaker 1: practices with respect to these startup companies and newly public corporations.
Speaker 1: You know, we've seen these sorts of products claims throughout
Speaker 1: the history of securities fraud. You know, in times when
Speaker 1: entrepreneurial companies, technology companies become a more important part of
Speaker 1: economy than there are high investor expectations for their products,
Speaker 1: and so there's incentive to lie about the product and
Speaker 1: sort of their prospects. And so you know, nineteen eighties
Speaker 1: we have Apple computer lying about the Leasta office computer
Speaker 1: and that results in a hundred million dollar verdict in
Speaker 1: a trial against some of the executives. And so we
Speaker 1: see these patterns again and again over the decades, and
Speaker 1: I think given the importance of entrepreneurial companies to today's economy,
Speaker 1: it shouldn't surprise us that we see similar theories of
Speaker 1: securities fraud being asserted. They did focus on social media
Speaker 1: a lot, so it's a message there too that you know,
Speaker 1: even on social media, you can't be exaggerating and giving misstatements. Absolutely,
Speaker 1: and I think that they highlighted the fact that social
Speaker 1: media is often accessed by you know, individual retail investors,
Speaker 1: and this is a way that we know you can
Speaker 1: communicate with a portion of the stock markets that previously
Speaker 1: had been somewhat ignored, and you can get your message
Speaker 1: out to retail investors. And if you're persuasive, as we
Speaker 1: saw a year or two ago in the game Stop
Speaker 1: in a MC, matters that if retail investors buy your
Speaker 1: message on social media, they can really boost your stock price.
Speaker 1: And you know that to me may also be another
Speaker 1: argument prosecutors might make with respective materiality is that even
Speaker 1: if we don't see an immediate impact with respect to
Speaker 1: sophisticated traders. You know, social media may take a bit
Speaker 1: of time for enthusiasm to sort of spread among different
Speaker 1: members of social media as things get posted and reposted,
Speaker 1: but over time it can have a very significant impact.
Speaker 1: And we did see a search in the company stock
Speaker 1: around the time these statements were made over social media.
Speaker 1: So he's facing as many as twenty years in prison.
Speaker 1: Do you have any feel for how much you'll get.
Speaker 1: I doubt it. Yeah, I doubt it will be twenty
Speaker 1: as well. You know, one of the things they may
Speaker 1: look at his investor hall how much were investors harmed
Speaker 1: by these misstatements. They may have examples of retail investors
Speaker 1: to spend a lot of money when the stock was
Speaker 1: trading at you know, ten, fifteen, twenty billion dollars and
Speaker 1: lost almost all their money now that it is trading
Speaker 1: at three dollars. And so I think one of the
Speaker 1: things they may argue is that there was a significant
Speaker 1: amount of market capitalization that was lost in the wake
Speaker 1: of the fraud. And I think that sort of harm
Speaker 1: can be relevant in terms of a sentence. You know,
Speaker 1: I think defense will sort of portray him as somebody
Speaker 1: who was over enthusiastic and he made a lot of
Speaker 1: bad judgment calls and did he really intend to hurt people?
Speaker 1: But I agree with you, I don't think it's going
Speaker 1: to be the maximum penalty. Thanks so much for being
Speaker 1: on the show of James D. Professor James Park of
Speaker 1: u c l A Law School, y the American history
Speaker 1: Champagne corks popped when an upstart labor union pulled off
Speaker 1: a stunning upset at an Amazon facility on Staten Island
Speaker 1: last April. Unions are seeing a resurgence in this country,
Speaker 1: with workers at big name companies like Amazon, Starbucks, and
Speaker 1: Apple voting to unionize. Management often tries to curb union
Speaker 1: organizing with illegal tactics, despite a National Labor Relations Board
Speaker 1: and an administration that's in labor's camp. The middle class
Speaker 1: the middle class bill America. Everybody knows that, But unions
Speaker 1: built the meddle class. That's a fact. My guest is
Speaker 1: labor law expert Kate Andreas, a professor at Columbia Law School. Kate.
Speaker 1: Some pro union employees seem to be trying something a
Speaker 1: little different. A group of Starbucks employees in South Carolina
Speaker 1: are suing the company for defamation over its response to
Speaker 1: a union pro test. The employees accused Starbucks of falsely
Speaker 1: and maliciously portraying them as criminals after they presented a
Speaker 1: letter of demands to their store manager, and the store
Speaker 1: manager then filed a police report. A defamation claim in
Speaker 1: a union organizing effort is certainly unusual and got a
Speaker 1: lot of attention, including from Senator Bernie Sanders. But is
Speaker 1: it effective legally? Yeah, So the allegations in this case,
Speaker 1: they're really pretty stunning. The employer apparently accused workers of
Speaker 1: trying to kidnap him without any evidence, according to at
Speaker 1: least report. So the workers seemed to be seeking to
Speaker 1: pursue a defamation claim because that gives them more ability
Speaker 1: to win remedies than proceeding under the National Labor Relations Act,
Speaker 1: because state law includes greater penalties for violations of defamation
Speaker 1: law than labor law allows. And I think their argument
Speaker 1: is that the harm here is one that's more of
Speaker 1: a sort of defamation rather than a labor violation. It's
Speaker 1: not entirely clear whether the suit will be able to
Speaker 1: go forward, because federal preemption doctrine does require that conduct
Speaker 1: that is protected by the Act or prohibited by the
Speaker 1: National Labor Relations Act must be resolved. Legal issues around
Speaker 1: that must be resolved in the first instance, by the board.
Speaker 1: Starbucks is a huge company. The union has prevailed and
Speaker 1: around two hundred fifty of the company's nine thousand stores
Speaker 1: and the unions filed numerous legal complaints with the National
Speaker 1: Labor Relations Board. Do those complaints ever bring any kind
Speaker 1: of resolution. I think what we're seeing with Starbucks is
Speaker 1: that there's overwhelming interests among workers and organizing unions. Hundreds
Speaker 1: of Starbucks stores in I think three dozen states have
Speaker 1: had union elections, and this is really pretty stunning, given
Speaker 1: that a year ago no Starbucks had the union, and
Speaker 1: most of the vast majority of these have voted to unionize. Nonetheless,
Speaker 1: what these workers are confronting at the legal regime that
Speaker 1: really doesn't do a good job at protecting their rights.
Speaker 1: And so what we see is that the employer has
Speaker 1: engaged in a pattern of anti union activity, and the
Speaker 1: penalties under the National Labor Relations Fact are really pretty minimal,
Speaker 1: and so I think workers are looking to other tools
Speaker 1: to try to make sure that their rights aren't violated.
Speaker 1: It's Starbucks the best example of the pro union movement
Speaker 1: of the workers. They are made the most progress. There's
Speaker 1: a lot of areas where workers are organizing in the
Speaker 1: last few years, and I think we see increased organizing
Speaker 1: activity in the areas of healthcare, university workers, journalists, trader
Speaker 1: does apple workers are I but Starbucks are certainly a
Speaker 1: pretty dark example of how much interest there is across
Speaker 1: the country among workers in organizing union so that they
Speaker 1: can have a voice at the workplace, so that they
Speaker 1: can address problems of low wages, um of not having
Speaker 1: enough sick time, of just the vast range of concerns
Speaker 1: that workers have that they want to have a voice
Speaker 1: how the company addresses those problems, and Starbucks is a
Speaker 1: good example of the rising interest in unions, particularly among
Speaker 1: young people. Do you think the rising interest in unions
Speaker 1: is in part sparked by concerns about health and economic
Speaker 1: justice that arose during the pandemic, or is it, as
Speaker 1: you say, more about young workers looking to protect their rights.
Speaker 1: I think it's a combination of factors. I think for
Speaker 1: the last few years, it's become increasingly clear that the
Speaker 1: country has a really significant problem with economic inequality, and
Speaker 1: people who are doing the work that makes things run
Speaker 1: are not receiving their share of economic rewards. From that,
Speaker 1: and that became particularly clear in the context of the pandemic,
Speaker 1: where we had the workers who are considered essential and
Speaker 1: they had to keep working were actually many of them
Speaker 1: very low wage workers they think significant health and safety reacts.
Speaker 1: So I think the pandemic did kind of highlight those
Speaker 1: problems that already existed in the economy at increasing concerns
Speaker 1: around health and safety. But then at the same time,
Speaker 1: we have a generation of young people who are coming
Speaker 1: into the workforce and recognizing that in order to make
Speaker 1: their jobs better and to improve conditions um that organizing
Speaker 1: collectively is the best route to do that. So studies
Speaker 1: show that seventy one percent of Americans now approve of
Speaker 1: labor unions and the majority would like to have a
Speaker 1: union if they could, which is the highest since has
Speaker 1: been since nineteen and I remember we spoke when the
Speaker 1: upstart union Amazon Labor Union won that election at a
Speaker 1: facility in Staten Island. Now the group has had a
Speaker 1: second defeat in a row. As far as you know,
Speaker 1: workers voting to unionize. With these union fights, it seems
Speaker 1: like it's one step forward, two steps back. Yeah. I
Speaker 1: don't think the issue is that workers don't want unions, because,
Speaker 1: as I said, there's really overwhelming evidence and increasing studies
Speaker 1: showing that the vast majority of workers would like to
Speaker 1: have a union if they could. But the problem is
Speaker 1: that the obstacles to winning a union really significant. So
Speaker 1: employers routinely engage in extensive anti union campaigning during union campaigns.
Speaker 1: Some of this is in violation of the law, and
Speaker 1: some of it is not in violation of the law,
Speaker 1: but it sends a very clear message to workers that
Speaker 1: they should not organize and that their jobs are at
Speaker 1: risk if they organized, and that makes it very hard
Speaker 1: to win unions. When you ask that the fact that
Speaker 1: many employers, even once workers win unions, resist negotiating contracts,
Speaker 1: and the legal remedies for that are very minimal, you
Speaker 1: can understand why it's been so hard for workers to
Speaker 1: organize and to win contracts, notwithstanding that they have the
Speaker 1: legal right to do so. I think it really just
Speaker 1: highlights the need for labor law reform in this area. Yeah,
Speaker 1: because that Amazon union, the Staten Island facility, they still
Speaker 1: haven't gotten a contract, and the president of the union
Speaker 1: said that at the warehouse near Albany, Amazon subjected workers
Speaker 1: to intimidation and retaliation on a daily basis. They file
Speaker 1: dozens of unfair labor practice complaints with the n l
Speaker 1: r B. Is that par for the course for these
Speaker 1: big companies? What can they do and what can't they do?
Speaker 1: Where's the line between intimidation and holding those meetings called
Speaker 1: captive audience meetings? Yeah, they're called that because essentially they're
Speaker 1: requiring employees to attend these meetings as a condition of employments.
Speaker 1: Of the employee declines to, they can be terminated. So
Speaker 1: where's the line. Well, the Nationally Or Relations Act the
Speaker 1: text employers right to compagne against unions, but it doesn't
Speaker 1: allow them to do so in a way that is coursive.
Speaker 1: They can't threaten workers for organizing unions. The problem is
Speaker 1: that the line is often hard to draw, and workers
Speaker 1: often hear something as a threat. Because of the employment relationship,
Speaker 1: they know that they can be the from principles that
Speaker 1: they can be fired for any reason or no reason
Speaker 1: at all, and so frequently um there's a debate about
Speaker 1: or litigation over whether a statement is a threat or
Speaker 1: or just an opinion. And even when employers are found
Speaker 1: to have committed unfairly for practices to either have threatened
Speaker 1: workers to have fired workers for organizing unions have easigally
Speaker 1: disciplined workers for organizing unions. The problem is that the
Speaker 1: penalties for doing any of that are so minimal that
Speaker 1: it's often in employers interests or they deem it to
Speaker 1: be within their economic interests to go ahead and violate
Speaker 1: the law because that can displayed workers from organizing unions
Speaker 1: and the penalties that they will be faced with are
Speaker 1: very minimal. These votes are all secret votes, right, so
Speaker 1: the company doesn't know which way any particular workers voting.
Speaker 1: That's true, Um, these are all secret ballot votes. The
Speaker 1: problem is that over the course of a union campaign,
Speaker 1: workers frequently become a friend aid because of all the
Speaker 1: things that their employer has done or said that if
Speaker 1: they do organize the union, things will actually get worse.
Speaker 1: And in fact, because employers violate the law, they are
Speaker 1: often able to coerce workers in that in that way.
Speaker 1: So how big a setback is it for the Amazon
Speaker 1: Labor Union to have to no votes in a row.
Speaker 1: I think it is a setback, and it will probably
Speaker 1: require them to go back and think more about their
Speaker 1: organizing strategy. But I don't think it changes the underlying reality,
Speaker 1: which is that Amazon workers have deep desire to change
Speaker 1: their conditions. They are very low paid, they work under
Speaker 1: very time constraints or often punished for any idle time.
Speaker 1: There's significant health and safety problems at these warehouses, and
Speaker 1: the desire to change conditions among workers will remain. And
Speaker 1: so I think that there will be continue to be
Speaker 1: organizing the activity and continue to be union successes. It
Speaker 1: just is going to require additional legal work and challenging
Speaker 1: the unfairly practices of Amazon and additional organizing. Kate, how
Speaker 1: long will it take for that Staten Island union to
Speaker 1: get a contract? Well, it depends on both how well
Speaker 1: those workers are able to stay organized and how much
Speaker 1: economic and public pressure they're able to bring to bear
Speaker 1: against the company. There's no deadline for reaching our contract.
Speaker 1: One of the possible labor law reforms that has been
Speaker 1: considered is to require that a first contract goes through
Speaker 1: mediation or even arbitration in order to make sure that
Speaker 1: a fair contract is reached. But our current law does
Speaker 1: not require that. So the workers need to bring to
Speaker 1: bear public pressure and economic pressure on the company to
Speaker 1: try to convince it to negotiate as it is required
Speaker 1: to do under the law. Another thing that's happening is
Speaker 1: that for this month, Starbucks and Apple were hit with
Speaker 1: shareholder proposals that call for labor rights audits after complaints
Speaker 1: by workers that the company has been trying to curb
Speaker 1: union organizing, and Amazon and Tesla were hit with similar
Speaker 1: proposals less proxy season. So is this another way to
Speaker 1: try to put pressure on these companies? Yeah? I think
Speaker 1: what those proposals reflected a growing realization among shareholders that
Speaker 1: there are companies violation of the law and anti union
Speaker 1: campaigning is in contradiction with the what the brands claimed
Speaker 1: to be and it can actually hurt the company. And
Speaker 1: it's another way to try to hold companies accountable and
Speaker 1: for following the law and for being good corporate system. Yes,
Speaker 1: so a may proposal at Amazon secured of independent voters
Speaker 1: and thirty eight point nine percent in total. What strikes
Speaker 1: me is that you have investors, this many investors wanting
Speaker 1: to support unions, and then you have Amazon with all
Speaker 1: these anti union tactics at the same time. Does it
Speaker 1: come from the top, does it come from you know,
Speaker 1: lower levels of management? Is it organized union busting? Yeah?
Speaker 1: So I can't speak specifically to Amazon, but in general.
Speaker 1: Typically when there is a significant anti union campaign, it's
Speaker 1: coming from the top, and it's a company decision to
Speaker 1: try to coerce workers against joining union UM and so
Speaker 1: I think the more public pressure is brought to their
Speaker 1: either through shareholders, through the media, through worker activity, through
Speaker 1: community activity, trying to call upon employers to respect workers
Speaker 1: rights to organize, the more that that can help to
Speaker 1: change employer behavior. That along with law reforms, and even
Speaker 1: without statutory reform, This current National Labor Relations Board and
Speaker 1: the current General Council at the Board is working very
Speaker 1: hard to try to enforce and make real the promise
Speaker 1: of the statute. So the General Council at the National
Speaker 1: Abor Relations Board has been per doing very aggressively violations
Speaker 1: of the law in order to try to stop this
Speaker 1: kind of anti union illegal behavior by companies like Starbucks
Speaker 1: and Amazon. I've been talking to Columbia Law School professor
Speaker 1: Kate Andreas about the resurgence in unions. Is there any
Speaker 1: move in Congress to change the labor laws. There is
Speaker 1: a bill pending in Congress and it does have significant support,
Speaker 1: but unless the filibuster is removed, it's unlikely that it
Speaker 1: will pass. But that bill would make it easier for
Speaker 1: workers to organize unions, and it would increase penalties on
Speaker 1: employers who violate the law. It would also make it
Speaker 1: easier to win first contracts, So it would be a
Speaker 1: really significant improvement and enable the workers who do want
Speaker 1: to have unions to achieve them. Tell us about the
Speaker 1: union case the Supreme Court just decided to take up
Speaker 1: for this term. Essentially, it involves a strike that occurred
Speaker 1: and it's kind of the inverse of the defamation pace
Speaker 1: involving Starbucks, an employer's food teamsters or workers for their
Speaker 1: behavior during a strike under state law, and is seeking
Speaker 1: to have that to go forward, which would impose significant
Speaker 1: penalties on the union. The union argued that the state
Speaker 1: lawsuit was preempted and therefore they couldn't be subject to
Speaker 1: get damages, and they won at the lower court, but
Speaker 1: this Preme Court just granted it. So there's some question
Speaker 1: about whether the court will change the law regarding preemption
Speaker 1: and make it easier for state lawsuits to go forward.
Speaker 1: That would make it easier, potentially for the Starbucks workers
Speaker 1: in the defination case to proceed, but it also would
Speaker 1: make it a lot easier for employers to bring actions
Speaker 1: against workers who engage in drug activity under state tourt
Speaker 1: law or state property law. The Supreme Court in recent
Speaker 1: years has not been I'll say, has not been particularly
Speaker 1: kind to unions, particularly supportive of unions. Well, of course,
Speaker 1: there was the big union case for the Janis case,
Speaker 1: and then there was the case about farm workers in California.
Speaker 1: Court has issued a theory is of cases in recent
Speaker 1: years that are both hostile to unions and also to workers.
Speaker 1: So one example was the Jans case, which made it
Speaker 1: impossible for state employers um to agree with their unions
Speaker 1: to have fair share fees, where all workers who benefit
Speaker 1: from a contract have to pay union use their fees.
Speaker 1: The court ruled that as a matter of the First Amendment,
Speaker 1: that is unconstitutional to have fair share fees, and all
Speaker 1: public sector workers have to be open shop or right
Speaker 1: to work, meaning you can be covered by union contract
Speaker 1: and get the benefits of a union contract but not
Speaker 1: have to pay any contributions towards representation and bargaining. There
Speaker 1: was that case. Then there was another case recently that
Speaker 1: held that a California state law that gave organizers the
Speaker 1: right to enter firm to talk to farm workers on
Speaker 1: a pretty minimal basis every now and then, but in
Speaker 1: order to enable the organizers have access to farm workers
Speaker 1: who often live on farms and are difficult to um
Speaker 1: to organize, the court will get that constituted at taking
Speaker 1: an illegal taking of property and violated the Fifth Amendment.
Speaker 1: And the Court is also if a number of cases
Speaker 1: that limit workers right. So, for example, it help that
Speaker 1: employees could be required to waive their right to proceed
Speaker 1: in class actions or collective actions through mandatory arbitration agreements,
Speaker 1: even though the National Labor Relations Act says that workers
Speaker 1: have the right to act collectively. And in all of
Speaker 1: these cases that were very vociferous defense, including defense that
Speaker 1: expressed a worry that the Court is returned into the
Speaker 1: kind of legal positions that it held in the early
Speaker 1: part of the twentieth century, where it routinely struck down
Speaker 1: laws that benefited workers. So why do you think the
Speaker 1: court is taking this particular case. It's always hard to
Speaker 1: know why a case gets granted. Um. In this case,
Speaker 1: the employer argued um that there was a circuit split
Speaker 1: or a split among the lower court. And so that's
Speaker 1: one reason why the court often takes a case. And
Speaker 1: and so one possibility is that the Court is just
Speaker 1: going to use this to clarify the longstanding preemption doctrine.
Speaker 1: There is a worry, however, that given how conservative and
Speaker 1: anti worker some of the justices on the Court have
Speaker 1: been in the past, that they might use this case
Speaker 1: to make it harder for workers to engage in collective
Speaker 1: action and expose them to additional penalties under state law.
Speaker 1: I don't know about this recent case, but you know,
Speaker 1: a lot of these cases, the plaintiffs aren't paying their
Speaker 1: own legal fees. A lot of these cases are part
Speaker 1: of a broader strategy to limit the ability of the
Speaker 1: government to protect workers and consumers and the environment. And
Speaker 1: so you know, even the case last year about the
Speaker 1: e g as ability is kind of part of the
Speaker 1: same kind of broader campaign to limit the ability of
Speaker 1: government to regulate corporations in ways that protect ordinary citizens.
Speaker 1: Um and so you know, yeah, there are individual workers
Speaker 1: here and there who might not want to pay union
Speaker 1: do but the drive to kind of achieve right to
Speaker 1: work or the effort to expand the takings pause, it's
Speaker 1: really not driven so much by you know, individual agreece
Speaker 1: citizens or workers, but rather by a broader adgenda to
Speaker 1: weekend government's ability to protect workers and consumers and to
Speaker 1: protect the environment. Thanks so much for your insights, Kate.
Speaker 1: That's Professor Kate Andreas of Columbia Law School, and that's
Speaker 1: it for this edition of The Bloomberg Law Show. Remember
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