WEBVTT - Trevor Milton Guilty Verdict Comes With Warning 0:00:03.160 --> 0:00:07.960 This is Bloombird Law with June Bresso from Bloomberg Radio, 0:00:09.400 --> 0:00:11.680 and this truck will come to market. I can promise 0:00:11.680 --> 0:00:13.319 you that for every doubt or out there that said 0:00:13.320 --> 0:00:16.560 that there's no way this is true. Absolutely, how can 0:00:16.600 --> 0:00:18.960 that be possible, We've done it. It's my pleasure to 0:00:18.960 --> 0:00:21.239 actually let you guys enjoy the night. See the truck. No, 0:00:21.400 --> 0:00:24.040 it's real. Touch at feel how sturdy it is. You're 0:00:24.040 --> 0:00:25.959 gonna see that this is a real truck. This is 0:00:26.000 --> 0:00:29.479 not a pusher. Trevor Milton might have convinced investors that 0:00:29.560 --> 0:00:32.120 his company had built the truck of the future, a 0:00:32.320 --> 0:00:36.200 zero emissions game changer, but he couldn't convince a jury. 0:00:36.600 --> 0:00:39.720 After less than a day of deliberations, a Manhattan jury 0:00:39.760 --> 0:00:43.919 convicted Milton of securities fraud and wire fraud for enticing 0:00:43.960 --> 0:00:48.199 investors to buy Nicolas shares with lies about technology that 0:00:48.240 --> 0:00:51.600 didn't exist, a stunning downfall for the door to door 0:00:51.680 --> 0:00:56.320 salesman turned billionaire who promised to revolutionize the auto industry. 0:00:56.720 --> 0:00:59.960 My guest is securities law expert James Park, a professor 0:01:00.080 --> 0:01:02.200 or at u c l A Law school. James. The 0:01:02.280 --> 0:01:06.440 Justice Department is trying to crack down on corporate crime, 0:01:07.000 --> 0:01:11.039 and they certainly put a lot into this four week trial. Yeah, 0:01:11.080 --> 0:01:13.120 I think so. I think there was a lot to 0:01:13.440 --> 0:01:16.600 put on. There were a lot of different misrepresentations, and 0:01:16.640 --> 0:01:18.520 I think for each of them you have to be 0:01:18.600 --> 0:01:23.440 very careful to establish just exactly what was said and 0:01:23.480 --> 0:01:25.880 what was the actual truth at the time. And I 0:01:25.920 --> 0:01:28.039 think you have to tell a story for each and 0:01:28.080 --> 0:01:30.520 every one of them. And I think the strength of 0:01:30.560 --> 0:01:34.959 the case, to me is not on any single misrepresentation, 0:01:35.120 --> 0:01:37.880 but the whole, the collective full of all four or 0:01:37.920 --> 0:01:40.120 five of them, when you add them up, I think 0:01:40.160 --> 0:01:43.640 that's where you get the criminal securities fraud. And I 0:01:43.640 --> 0:01:46.880 think it was also important that they put on evidence 0:01:46.920 --> 0:01:51.240 from insiders, people who worked at the company, who testified 0:01:51.320 --> 0:01:53.360 that you know, we tried to intervene. We tried to 0:01:53.400 --> 0:01:55.720 tell him you're not telling the truth, and so he 0:01:55.800 --> 0:01:57.880 can't just argue that, well, I just made a bunch 0:01:57.920 --> 0:02:00.919 of mistakes. They intervened and said that you are making 0:02:00.960 --> 0:02:04.400 false statements about material fact. There's also you know, some 0:02:04.480 --> 0:02:07.240 testimony about at some point they tried to lock him 0:02:07.240 --> 0:02:09.840 out of the social media accounts, and so this was 0:02:09.919 --> 0:02:14.240 not a situation where you have a single mistake by 0:02:14.280 --> 0:02:18.560 an important figure in the corporation. This is a pattern 0:02:18.639 --> 0:02:22.880 and practice that was occurring over a number of years 0:02:22.960 --> 0:02:27.320 and accelerated during a critical period in the company's life 0:02:27.360 --> 0:02:30.680 when it was a newly public corporation. And so I 0:02:30.680 --> 0:02:33.960 think that's why we have this four week case. So 0:02:34.080 --> 0:02:38.120 the defense seemed to be two prong one that he 0:02:38.160 --> 0:02:42.639 didn't have intent, he didn't mean to deceive potential investors, 0:02:43.280 --> 0:02:47.680 and in any case, his statements weren't material. And the 0:02:47.760 --> 0:02:50.640 defense attorney sort of comparative in the closing he said, 0:02:50.720 --> 0:02:52.760 you know, they're gonna have to go after the Energizer 0:02:52.880 --> 0:02:56.200 bunny after this. In other words, it was like puffery. 0:02:56.440 --> 0:03:00.360 It wasn't an intent to deceive. Yeah, I remember hearing 0:03:00.360 --> 0:03:03.440 the Energizer bunny prayed. I had to laugh a little 0:03:03.480 --> 0:03:06.960 at that. But you know, Energizer batteries work. They worked 0:03:07.000 --> 0:03:11.639 pretty well, and so you know, fundamentally the product works 0:03:11.760 --> 0:03:15.440 and has been tested and is reliable. And even if 0:03:15.440 --> 0:03:18.839 they have sort of a funny way of showing that, 0:03:19.360 --> 0:03:22.680 you know, there's nothing factually incorrect about the Energizer body 0:03:22.720 --> 0:03:25.720 as far as I know, And in this situation, it's 0:03:25.720 --> 0:03:31.359 not really puff free. When you are misstating very particularized fact. 0:03:31.639 --> 0:03:34.800 You know, he's saying we're producing hydrogen at four dollars 0:03:34.800 --> 0:03:37.240 a gallon at a time when it's selling for sixteen 0:03:37.320 --> 0:03:41.000 dollars a gallon. That's not true. They were not producing 0:03:41.080 --> 0:03:44.320 hydrogen at all. And so you know, when you get 0:03:44.360 --> 0:03:48.000 that specific court generally will say that's not toughery, that's 0:03:48.040 --> 0:03:52.200 a factual misstatement. And you know, he's saying, we produced 0:03:52.360 --> 0:03:55.760 this badger truck using our components from the ground up, 0:03:55.880 --> 0:03:59.200 and implying that they have developed the technology, is their 0:03:59.320 --> 0:04:04.120 proprietor very technology, when in fact they're using third party sources. 0:04:04.280 --> 0:04:08.280 And they're saying we have all of these binding contracts, 0:04:08.320 --> 0:04:12.080 and in the interview he specifically corrects the interview to 0:04:12.200 --> 0:04:15.960 clarify that the contracts are binding, when in fact they 0:04:16.000 --> 0:04:18.839 are not binding and to be canceled in any time. 0:04:19.000 --> 0:04:22.080 These are all fact you know, one or two of them. 0:04:22.120 --> 0:04:24.359 Maybe you could sort of say, you know, he's just 0:04:24.480 --> 0:04:26.920 making mistakes and doesn't have an intense or to see. 0:04:27.160 --> 0:04:31.040 But when we get some multiple misstatements of factual information 0:04:31.120 --> 0:04:34.440 like this, I think it's very very difficult to conclude 0:04:34.800 --> 0:04:38.599 that this was not without deceptive intent, and so I 0:04:38.640 --> 0:04:40.599 think that if you look at the case as a 0:04:40.600 --> 0:04:43.359 whole and it's strong now the materiality point, you know, 0:04:43.400 --> 0:04:46.520 that's always an issue, a very important issue for any 0:04:46.680 --> 0:04:51.320 securities fraud case. Are the misstatements material are the importance 0:04:51.360 --> 0:04:54.040 to investors. And they put on a witness who said 0:04:54.080 --> 0:04:56.840 that for each of these individual statements, we didn't really 0:04:57.080 --> 0:05:01.120 see an immediate soft price reaction. But you know, to me, 0:05:01.279 --> 0:05:05.479 I think the materiality would be in the story that's 0:05:05.520 --> 0:05:07.839 told as a whole, with all of the mis statements 0:05:07.920 --> 0:05:12.400 together over time, that collectively they must have had an 0:05:12.440 --> 0:05:17.039 impact on the company stock price, which did increase exponentially 0:05:17.279 --> 0:05:20.719 over time during the period um when he was making 0:05:20.760 --> 0:05:25.560 these misstatements. And so I think that materiality here, in 0:05:25.600 --> 0:05:28.240 my view, is is satisfied when you look at the 0:05:28.279 --> 0:05:32.960 misstatements collectively as a whole um the mis statements creates 0:05:33.040 --> 0:05:37.599 portrayal of a company that has finished products that are 0:05:37.880 --> 0:05:41.080 soon to be rolled out, and that simply was not true. 0:05:41.800 --> 0:05:44.520 The defense only put on one witness, and that was 0:05:44.640 --> 0:05:49.400 to the materiality. Obviously, a defendant doesn't have to take 0:05:49.400 --> 0:05:52.760 the stand in his own defense, but in this case, 0:05:53.240 --> 0:05:55.560 did it sort of cry out for him to take 0:05:55.600 --> 0:05:58.440 the stand. I mean, he has no criminal background that 0:05:58.520 --> 0:06:00.800 a lot of defendants are worried about if they take 0:06:00.880 --> 0:06:04.479 the stand. Obviously, he's a good talker. Why wouldn't he 0:06:04.520 --> 0:06:06.800 take the stand to try to deflect some of this? 0:06:07.440 --> 0:06:09.640 I think it would have been tough for him to 0:06:09.839 --> 0:06:14.240 defend his statement, you know, even with preparation. I think 0:06:14.240 --> 0:06:17.120 that he would have had to find some some evidence, 0:06:17.640 --> 0:06:21.200 something to back up his statements. And I think that 0:06:21.200 --> 0:06:25.320 that evidence simply did not exist. That he was saying 0:06:25.360 --> 0:06:28.880 things that were false. And so I think that if 0:06:28.920 --> 0:06:31.400 he had to come up and explain why he was 0:06:31.440 --> 0:06:36.400 saying what he was saying, I think that the prosecutors 0:06:36.760 --> 0:06:40.480 would have cross examined him and made a lot of 0:06:40.720 --> 0:06:44.880 significant points. And so I think that, you know, given 0:06:45.600 --> 0:06:48.839 that he did not testify, I think that there there 0:06:48.880 --> 0:06:52.640 may not have been sufficient evidence to back up the 0:06:52.680 --> 0:06:57.159 statements that he made. So prosecutors presented evidence that he 0:06:57.240 --> 0:07:00.960 spent more than eighty million dollars in six months during 0:07:01.880 --> 0:07:05.160 you know, the Gulf Stream jet, the multimillion dollar home, 0:07:05.200 --> 0:07:08.120 and the turks and kid goes. How is that relevant? 0:07:08.200 --> 0:07:12.000 Doesn't that just turn a jury against a defendant? It's 0:07:12.040 --> 0:07:14.560 a good question. You know, I think it may speak 0:07:14.600 --> 0:07:18.600 to motives, and I think the strongest security fraud cases 0:07:19.240 --> 0:07:23.120 are broad against individual executives when they have a motive 0:07:23.200 --> 0:07:26.440 to personally enrich themselves. You know, this is what we 0:07:26.520 --> 0:07:31.320 see in en Rod with Jeff Skilling and World Colm 0:07:31.320 --> 0:07:34.760 with Bernie ebers Jeff Skilling sells tens of billions of 0:07:34.800 --> 0:07:38.120 dollars worth of stock in in the months before the 0:07:38.160 --> 0:07:42.320 restatements that were made by ed Ron. Bernie Eberts had 0:07:42.520 --> 0:07:46.280 hundreds of millions of dollars in loans that were backed 0:07:46.360 --> 0:07:49.680 by World Tom Stock. And so to get at a 0:07:50.080 --> 0:07:54.000 individual executive. To bring a case against an individual executive, 0:07:54.080 --> 0:07:56.840 I think you have a stronger case when there is 0:07:56.880 --> 0:08:00.320 a motive to inflate the stock price. And I think 0:08:00.360 --> 0:08:04.840 that the spending would be relevant because it would show 0:08:04.920 --> 0:08:08.200 why he had an incentive or a special incentive beyond 0:08:08.640 --> 0:08:13.360 the normal corporate founder or executive to boost the company's 0:08:13.360 --> 0:08:16.240 stock price. And another piece of evidence that came out 0:08:16.280 --> 0:08:20.280 is that he negotiated a shorter lock up period. He 0:08:20.360 --> 0:08:23.280 wanted to sell his stock six months after the I 0:08:23.400 --> 0:08:26.400 p O instead of a year. And I think that 0:08:26.960 --> 0:08:29.840 um is also a piece of evidence that may indicate that, 0:08:30.080 --> 0:08:32.760 you know, he may have some financial reason to boost 0:08:32.760 --> 0:08:35.319 the company stock so that he can get out as 0:08:35.360 --> 0:08:38.040 quickly as possible. And so I think it's fair game 0:08:38.160 --> 0:08:41.760 to make allegations like that in the context of a 0:08:41.840 --> 0:08:45.360 security sproad case, because you know, there is second circuit 0:08:45.480 --> 0:08:50.640 precedent which says that individual Enrichmond is relevant on the 0:08:50.760 --> 0:08:54.600 question of whether somebody acted with fraudulent intent, and so 0:08:54.640 --> 0:08:56.680 I think that this is well within the bounds of 0:08:57.160 --> 0:09:01.800 proper evidence for the prosecution to int So outside the courthouse, 0:09:01.840 --> 0:09:04.480 Milton said, I did nothing wrong. I was talking about 0:09:04.520 --> 0:09:08.720 the business plan. He still has hundreds of millions of dollars, 0:09:08.760 --> 0:09:11.720 and obviously they'll be appeals ahead. His attorney said they 0:09:11.760 --> 0:09:14.439 were going to keep on fighting, but appeals are an 0:09:14.520 --> 0:09:19.160 uphill battle. Was there any obvious error trial error that 0:09:19.520 --> 0:09:23.320 they can use here. I didn't see an obvious arrah. 0:09:23.559 --> 0:09:26.520 Others may have, but I did not see an obvious error. 0:09:26.920 --> 0:09:30.280 Do they have a chance on the materiality argument. I 0:09:30.320 --> 0:09:32.560 think it's a long shot. I don't think it's a 0:09:32.720 --> 0:09:37.720 zero percent probability. I think they will raise the materiality arguments, 0:09:38.000 --> 0:09:41.320 and I think that maybe the best arguments they have 0:09:41.559 --> 0:09:44.640 because I think it's fairly clear that these statements are false, 0:09:45.000 --> 0:09:47.480 and that there are multiple statements, and you know, you 0:09:47.520 --> 0:09:52.480 can always make an argument about deceptive intent, about fraudulent intent. 0:09:52.800 --> 0:09:55.440 But I think the prosecution made a very strong case, 0:09:55.559 --> 0:09:58.160 and I think if you look at the misstatements as 0:09:58.200 --> 0:10:01.520 a whole, they are material, a real and given that 0:10:01.960 --> 0:10:06.520 they happened multiple times after warnings, I think it's hard 0:10:06.600 --> 0:10:09.240 for him to argue that he's acting in good faith. 0:10:09.400 --> 0:10:13.120 I think that he knew as a executive chairman of 0:10:13.160 --> 0:10:16.760 a public corporation that he has an obligation to tell 0:10:16.800 --> 0:10:19.440 the truth when he's speaking to the public. Yeah. So, 0:10:19.480 --> 0:10:22.760 the U S Attorney for Manhattan, Damian Williams, said the 0:10:22.800 --> 0:10:25.560 case is a warning to anyone who plays fast and 0:10:25.600 --> 0:10:28.400 loose with the truth to get investors to part with 0:10:28.480 --> 0:10:33.480 their money. So does this case have ramifications beyond this trial? 0:10:33.960 --> 0:10:35.840 I think it does. I mean, I think in some 0:10:35.880 --> 0:10:39.800 ways you can see this as a continuation of the 0:10:40.040 --> 0:10:44.720 effort in the Farahness case, Right Sarahnes involved similar types 0:10:44.760 --> 0:10:49.840 of material misrepresentations with respect to the development of a product. 0:10:50.000 --> 0:10:52.760 It was in the context of a private corporation, and 0:10:52.800 --> 0:10:55.280 I think the next step is a company like this 0:10:55.480 --> 0:10:58.560 which is newly public had been acquired by a spac 0:10:59.040 --> 0:11:01.760 And my think that this sort of builds on the 0:11:01.840 --> 0:11:04.240 lesson of seranists. In my view that if you are 0:11:05.000 --> 0:11:09.240 relatively new technology company, that you have to tell the 0:11:09.280 --> 0:11:12.720 truth about your products. Given how important these sorts of 0:11:12.760 --> 0:11:16.760 companies are to our economy, given the activity we still 0:11:16.800 --> 0:11:20.840 have with respect to entrepreneurial companies, I think that founders 0:11:21.360 --> 0:11:26.040 and management teams of these companies should be very careful 0:11:26.080 --> 0:11:28.400 and take note of both of these cases, take a 0:11:28.480 --> 0:11:31.360 very careful look at the sorts of problems that arose 0:11:31.520 --> 0:11:36.400 when you make factual misstatements. This will hopefully improve the 0:11:36.440 --> 0:11:41.440 practices with respect to these startup companies and newly public corporations. 0:11:41.480 --> 0:11:44.560 You know, we've seen these sorts of products claims throughout 0:11:44.600 --> 0:11:48.720 the history of securities fraud. You know, in times when 0:11:49.000 --> 0:11:53.120 entrepreneurial companies, technology companies become a more important part of 0:11:53.280 --> 0:11:57.439 economy than there are high investor expectations for their products, 0:11:57.440 --> 0:12:00.840 and so there's incentive to lie about the product and 0:12:00.920 --> 0:12:04.120 sort of their prospects. And so you know, nineteen eighties 0:12:04.160 --> 0:12:08.600 we have Apple computer lying about the Leasta office computer 0:12:09.000 --> 0:12:11.520 and that results in a hundred million dollar verdict in 0:12:11.559 --> 0:12:14.559 a trial against some of the executives. And so we 0:12:14.640 --> 0:12:17.800 see these patterns again and again over the decades, and 0:12:17.840 --> 0:12:22.079 I think given the importance of entrepreneurial companies to today's economy, 0:12:22.520 --> 0:12:25.920 it shouldn't surprise us that we see similar theories of 0:12:25.960 --> 0:12:30.600 securities fraud being asserted. They did focus on social media 0:12:30.800 --> 0:12:34.480 a lot, so it's a message there too that you know, 0:12:34.679 --> 0:12:41.160 even on social media, you can't be exaggerating and giving misstatements. Absolutely, 0:12:41.280 --> 0:12:44.840 and I think that they highlighted the fact that social 0:12:44.880 --> 0:12:49.920 media is often accessed by you know, individual retail investors, 0:12:50.000 --> 0:12:52.520 and this is a way that we know you can 0:12:52.640 --> 0:12:56.880 communicate with a portion of the stock markets that previously 0:12:56.960 --> 0:13:00.720 had been somewhat ignored, and you can get your message 0:13:00.760 --> 0:13:04.280 out to retail investors. And if you're persuasive, as we 0:13:04.320 --> 0:13:06.760 saw a year or two ago in the game Stop 0:13:06.800 --> 0:13:11.719 in a MC, matters that if retail investors buy your 0:13:11.720 --> 0:13:14.960 message on social media, they can really boost your stock price. 0:13:15.160 --> 0:13:17.680 And you know that to me may also be another 0:13:17.840 --> 0:13:22.440 argument prosecutors might make with respective materiality is that even 0:13:22.480 --> 0:13:25.079 if we don't see an immediate impact with respect to 0:13:25.160 --> 0:13:28.719 sophisticated traders. You know, social media may take a bit 0:13:28.760 --> 0:13:34.160 of time for enthusiasm to sort of spread among different 0:13:34.160 --> 0:13:37.280 members of social media as things get posted and reposted, 0:13:37.440 --> 0:13:40.080 but over time it can have a very significant impact. 0:13:40.120 --> 0:13:42.720 And we did see a search in the company stock 0:13:42.840 --> 0:13:46.440 around the time these statements were made over social media. 0:13:47.320 --> 0:13:49.920 So he's facing as many as twenty years in prison. 0:13:50.080 --> 0:13:53.240 Do you have any feel for how much you'll get. 0:13:53.280 --> 0:13:56.440 I doubt it. Yeah, I doubt it will be twenty 0:13:56.480 --> 0:13:58.360 as well. You know, one of the things they may 0:13:58.440 --> 0:14:02.560 look at his investor hall how much were investors harmed 0:14:03.080 --> 0:14:07.880 by these misstatements. They may have examples of retail investors 0:14:07.880 --> 0:14:10.640 to spend a lot of money when the stock was 0:14:10.679 --> 0:14:14.040 trading at you know, ten, fifteen, twenty billion dollars and 0:14:14.360 --> 0:14:17.079 lost almost all their money now that it is trading 0:14:17.080 --> 0:14:19.360 at three dollars. And so I think one of the 0:14:19.400 --> 0:14:22.920 things they may argue is that there was a significant 0:14:22.920 --> 0:14:25.960 amount of market capitalization that was lost in the wake 0:14:26.080 --> 0:14:28.840 of the fraud. And I think that sort of harm 0:14:29.040 --> 0:14:32.120 can be relevant in terms of a sentence. You know, 0:14:32.160 --> 0:14:34.800 I think defense will sort of portray him as somebody 0:14:34.840 --> 0:14:37.800 who was over enthusiastic and he made a lot of 0:14:38.160 --> 0:14:44.800 bad judgment calls and did he really intend to hurt people? 0:14:45.240 --> 0:14:46.920 But I agree with you, I don't think it's going 0:14:46.960 --> 0:14:49.800 to be the maximum penalty. Thanks so much for being 0:14:49.800 --> 0:14:52.760 on the show of James D. Professor James Park of 0:14:52.920 --> 0:15:02.640 u c l A Law School, y the American history 0:15:03.840 --> 0:15:07.880 Champagne corks popped when an upstart labor union pulled off 0:15:07.920 --> 0:15:11.680 a stunning upset at an Amazon facility on Staten Island 0:15:11.760 --> 0:15:15.640 last April. Unions are seeing a resurgence in this country, 0:15:15.880 --> 0:15:19.680 with workers at big name companies like Amazon, Starbucks, and 0:15:19.720 --> 0:15:23.640 Apple voting to unionize. Management often tries to curb union 0:15:23.760 --> 0:15:28.520 organizing with illegal tactics, despite a National Labor Relations Board 0:15:28.640 --> 0:15:32.760 and an administration that's in labor's camp. The middle class 0:15:33.320 --> 0:15:37.720 the middle class bill America. Everybody knows that, But unions 0:15:37.880 --> 0:15:42.280 built the meddle class. That's a fact. My guest is 0:15:42.360 --> 0:15:47.000 labor law expert Kate Andreas, a professor at Columbia Law School. Kate. 0:15:47.120 --> 0:15:50.760 Some pro union employees seem to be trying something a 0:15:50.760 --> 0:15:54.920 little different. A group of Starbucks employees in South Carolina 0:15:55.000 --> 0:15:59.080 are suing the company for defamation over its response to 0:15:59.120 --> 0:16:03.400 a union pro test. The employees accused Starbucks of falsely 0:16:03.440 --> 0:16:08.000 and maliciously portraying them as criminals after they presented a 0:16:08.080 --> 0:16:11.360 letter of demands to their store manager, and the store 0:16:11.440 --> 0:16:14.960 manager then filed a police report. A defamation claim in 0:16:15.000 --> 0:16:18.560 a union organizing effort is certainly unusual and got a 0:16:18.600 --> 0:16:21.680 lot of attention, including from Senator Bernie Sanders. But is 0:16:21.720 --> 0:16:25.160 it effective legally? Yeah, So the allegations in this case, 0:16:25.200 --> 0:16:30.000 they're really pretty stunning. The employer apparently accused workers of 0:16:30.040 --> 0:16:33.200 trying to kidnap him without any evidence, according to at 0:16:33.240 --> 0:16:37.000 least report. So the workers seemed to be seeking to 0:16:37.080 --> 0:16:39.920 pursue a defamation claim because that gives them more ability 0:16:39.960 --> 0:16:44.800 to win remedies than proceeding under the National Labor Relations Act, 0:16:44.880 --> 0:16:48.720 because state law includes greater penalties for violations of defamation 0:16:48.800 --> 0:16:52.120 law than labor law allows. And I think their argument 0:16:52.200 --> 0:16:54.920 is that the harm here is one that's more of 0:16:54.960 --> 0:16:58.320 a sort of defamation rather than a labor violation. It's 0:16:58.320 --> 0:17:01.040 not entirely clear whether the suit will be able to 0:17:01.080 --> 0:17:05.720 go forward, because federal preemption doctrine does require that conduct 0:17:05.800 --> 0:17:09.080 that is protected by the Act or prohibited by the 0:17:09.160 --> 0:17:12.880 National Labor Relations Act must be resolved. Legal issues around 0:17:12.920 --> 0:17:15.639 that must be resolved in the first instance, by the board. 0:17:16.480 --> 0:17:20.280 Starbucks is a huge company. The union has prevailed and 0:17:20.359 --> 0:17:24.400 around two hundred fifty of the company's nine thousand stores 0:17:24.800 --> 0:17:29.200 and the unions filed numerous legal complaints with the National 0:17:29.280 --> 0:17:33.800 Labor Relations Board. Do those complaints ever bring any kind 0:17:33.800 --> 0:17:37.679 of resolution. I think what we're seeing with Starbucks is 0:17:37.720 --> 0:17:42.160 that there's overwhelming interests among workers and organizing unions. Hundreds 0:17:42.160 --> 0:17:45.119 of Starbucks stores in I think three dozen states have 0:17:45.160 --> 0:17:48.159 had union elections, and this is really pretty stunning, given 0:17:48.200 --> 0:17:52.679 that a year ago no Starbucks had the union, and 0:17:52.800 --> 0:17:57.000 most of the vast majority of these have voted to unionize. Nonetheless, 0:17:57.119 --> 0:18:00.240 what these workers are confronting at the legal regime that 0:18:00.320 --> 0:18:03.400 really doesn't do a good job at protecting their rights. 0:18:03.400 --> 0:18:05.439 And so what we see is that the employer has 0:18:05.480 --> 0:18:09.479 engaged in a pattern of anti union activity, and the 0:18:09.520 --> 0:18:13.760 penalties under the National Labor Relations Fact are really pretty minimal, 0:18:13.800 --> 0:18:17.800 and so I think workers are looking to other tools 0:18:17.880 --> 0:18:20.560 to try to make sure that their rights aren't violated. 0:18:21.080 --> 0:18:25.200 It's Starbucks the best example of the pro union movement 0:18:25.480 --> 0:18:28.560 of the workers. They are made the most progress. There's 0:18:28.600 --> 0:18:30.879 a lot of areas where workers are organizing in the 0:18:30.960 --> 0:18:33.800 last few years, and I think we see increased organizing 0:18:33.840 --> 0:18:38.800 activity in the areas of healthcare, university workers, journalists, trader 0:18:38.880 --> 0:18:42.560 does apple workers are I but Starbucks are certainly a 0:18:42.600 --> 0:18:45.919 pretty dark example of how much interest there is across 0:18:45.960 --> 0:18:48.840 the country among workers in organizing union so that they 0:18:48.840 --> 0:18:51.159 can have a voice at the workplace, so that they 0:18:51.160 --> 0:18:54.680 can address problems of low wages, um of not having 0:18:54.760 --> 0:18:58.240 enough sick time, of just the vast range of concerns 0:18:58.240 --> 0:18:59.800 that workers have that they want to have a voice 0:19:00.240 --> 0:19:03.840 how the company addresses those problems, and Starbucks is a 0:19:03.920 --> 0:19:06.600 good example of the rising interest in unions, particularly among 0:19:06.640 --> 0:19:10.480 young people. Do you think the rising interest in unions 0:19:10.840 --> 0:19:17.440 is in part sparked by concerns about health and economic 0:19:17.560 --> 0:19:20.760 justice that arose during the pandemic, or is it, as 0:19:20.800 --> 0:19:24.800 you say, more about young workers looking to protect their rights. 0:19:25.600 --> 0:19:28.040 I think it's a combination of factors. I think for 0:19:28.080 --> 0:19:31.119 the last few years, it's become increasingly clear that the 0:19:31.119 --> 0:19:34.840 country has a really significant problem with economic inequality, and 0:19:34.920 --> 0:19:37.360 people who are doing the work that makes things run 0:19:37.960 --> 0:19:42.119 are not receiving their share of economic rewards. From that, 0:19:42.200 --> 0:19:45.560 and that became particularly clear in the context of the pandemic, 0:19:45.600 --> 0:19:48.399 where we had the workers who are considered essential and 0:19:48.440 --> 0:19:50.600 they had to keep working were actually many of them 0:19:50.680 --> 0:19:53.720 very low wage workers they think significant health and safety reacts. 0:19:54.119 --> 0:19:57.359 So I think the pandemic did kind of highlight those 0:19:57.400 --> 0:20:01.320 problems that already existed in the economy at increasing concerns 0:20:01.320 --> 0:20:03.720 around health and safety. But then at the same time, 0:20:03.720 --> 0:20:06.120 we have a generation of young people who are coming 0:20:06.160 --> 0:20:09.720 into the workforce and recognizing that in order to make 0:20:09.760 --> 0:20:13.760 their jobs better and to improve conditions um that organizing 0:20:14.440 --> 0:20:17.280 collectively is the best route to do that. So studies 0:20:17.280 --> 0:20:20.639 show that seventy one percent of Americans now approve of 0:20:20.760 --> 0:20:22.800 labor unions and the majority would like to have a 0:20:22.880 --> 0:20:25.119 union if they could, which is the highest since has 0:20:25.160 --> 0:20:29.840 been since nineteen and I remember we spoke when the 0:20:29.960 --> 0:20:34.240 upstart union Amazon Labor Union won that election at a 0:20:34.280 --> 0:20:38.359 facility in Staten Island. Now the group has had a 0:20:38.440 --> 0:20:40.679 second defeat in a row. As far as you know, 0:20:40.840 --> 0:20:45.719 workers voting to unionize. With these union fights, it seems 0:20:45.760 --> 0:20:49.560 like it's one step forward, two steps back. Yeah. I 0:20:49.600 --> 0:20:52.560 don't think the issue is that workers don't want unions, because, 0:20:52.600 --> 0:20:55.840 as I said, there's really overwhelming evidence and increasing studies 0:20:55.840 --> 0:20:58.280 showing that the vast majority of workers would like to 0:20:58.280 --> 0:21:00.600 have a union if they could. But the problem is 0:21:00.640 --> 0:21:04.600 that the obstacles to winning a union really significant. So 0:21:04.760 --> 0:21:12.000 employers routinely engage in extensive anti union campaigning during union campaigns. 0:21:12.240 --> 0:21:14.280 Some of this is in violation of the law, and 0:21:14.359 --> 0:21:16.040 some of it is not in violation of the law, 0:21:16.040 --> 0:21:18.920 but it sends a very clear message to workers that 0:21:19.000 --> 0:21:21.239 they should not organize and that their jobs are at 0:21:21.320 --> 0:21:24.120 risk if they organized, and that makes it very hard 0:21:24.160 --> 0:21:26.600 to win unions. When you ask that the fact that 0:21:27.000 --> 0:21:32.000 many employers, even once workers win unions, resist negotiating contracts, 0:21:32.359 --> 0:21:35.480 and the legal remedies for that are very minimal, you 0:21:35.520 --> 0:21:39.080 can understand why it's been so hard for workers to 0:21:39.840 --> 0:21:42.840 organize and to win contracts, notwithstanding that they have the 0:21:42.920 --> 0:21:44.879 legal right to do so. I think it really just 0:21:45.000 --> 0:21:48.960 highlights the need for labor law reform in this area. Yeah, 0:21:49.000 --> 0:21:52.640 because that Amazon union, the Staten Island facility, they still 0:21:52.680 --> 0:21:56.439 haven't gotten a contract, and the president of the union 0:21:56.560 --> 0:22:01.640 said that at the warehouse near Albany, Amazon subjected workers 0:22:01.680 --> 0:22:06.160 to intimidation and retaliation on a daily basis. They file 0:22:06.280 --> 0:22:12.359 dozens of unfair labor practice complaints with the n l 0:22:12.480 --> 0:22:15.439 r B. Is that par for the course for these 0:22:15.560 --> 0:22:19.760 big companies? What can they do and what can't they do? 0:22:19.840 --> 0:22:25.160 Where's the line between intimidation and holding those meetings called 0:22:25.280 --> 0:22:29.160 captive audience meetings? Yeah, they're called that because essentially they're 0:22:29.200 --> 0:22:33.720 requiring employees to attend these meetings as a condition of employments. 0:22:33.840 --> 0:22:37.040 Of the employee declines to, they can be terminated. So 0:22:37.040 --> 0:22:39.359 where's the line. Well, the Nationally Or Relations Act the 0:22:39.480 --> 0:22:43.399 text employers right to compagne against unions, but it doesn't 0:22:43.400 --> 0:22:45.560 allow them to do so in a way that is coursive. 0:22:46.240 --> 0:22:50.080 They can't threaten workers for organizing unions. The problem is 0:22:50.160 --> 0:22:53.360 that the line is often hard to draw, and workers 0:22:53.359 --> 0:22:57.760 often hear something as a threat. Because of the employment relationship, 0:22:57.920 --> 0:23:00.760 they know that they can be the from principles that 0:23:00.800 --> 0:23:03.119 they can be fired for any reason or no reason 0:23:03.200 --> 0:23:07.359 at all, and so frequently um there's a debate about 0:23:07.480 --> 0:23:11.120 or litigation over whether a statement is a threat or 0:23:11.240 --> 0:23:15.320 or just an opinion. And even when employers are found 0:23:15.359 --> 0:23:18.800 to have committed unfairly for practices to either have threatened 0:23:18.800 --> 0:23:23.120 workers to have fired workers for organizing unions have easigally 0:23:23.160 --> 0:23:26.960 disciplined workers for organizing unions. The problem is that the 0:23:27.040 --> 0:23:30.200 penalties for doing any of that are so minimal that 0:23:30.280 --> 0:23:34.560 it's often in employers interests or they deem it to 0:23:34.600 --> 0:23:37.000 be within their economic interests to go ahead and violate 0:23:37.040 --> 0:23:40.320 the law because that can displayed workers from organizing unions 0:23:40.400 --> 0:23:43.000 and the penalties that they will be faced with are 0:23:43.119 --> 0:23:47.120 very minimal. These votes are all secret votes, right, so 0:23:47.320 --> 0:23:51.800 the company doesn't know which way any particular workers voting. 0:23:52.520 --> 0:23:55.520 That's true, Um, these are all secret ballot votes. The 0:23:55.520 --> 0:23:58.040 problem is that over the course of a union campaign, 0:23:58.400 --> 0:24:01.040 workers frequently become a friend aid because of all the 0:24:01.080 --> 0:24:04.199 things that their employer has done or said that if 0:24:04.240 --> 0:24:06.639 they do organize the union, things will actually get worse. 0:24:07.000 --> 0:24:10.640 And in fact, because employers violate the law, they are 0:24:10.720 --> 0:24:14.360