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North American Edition
24th April 2024
 
THE HOT STORY
U.S. companies barred from imposing noncompete agreements on employees
U.S. companies will no longer be able to enforce noncompete agreements on employees, following a rule approved by the Federal Trade Commission (FTC). The ban aims to increase job mobility and prevent restrictions on workers' ability to switch jobs for higher pay. The FTC argues that noncompete agreements harm workers and the economy by reducing job churn and limiting the hiring ability of other businesses. The rule, which received support from the majority of the 26,000 comments received, will take effect in six months unless blocked by legal challenges. Business groups have criticized the measure, claiming it exceeds the FTC's authority. The U.S. Chamber of Commerce plans to sue to block the rule. Noncompete agreements are already banned in three states, including California.
LEGAL
SCOTUS leans toward Starbucks in union case
The Supreme Court on Tuesday appeared willing to side with Starbucks in the company’s challenge to a federal judge’s order to reinstate seven workers who were attempting to unionize a store in Memphis. The justices heard arguments in the Seattle-based company's appeal of a lower court's approval of an injunction sought by the U.S. National Labor Relations Board (NLRB) ordering reinstatement of the workers. The case could make it harder to quickly halt labor practices challenged as unfair under federal law while the NLRB resolves complaints. A majority of the justices seemed sympathetic to Starbucks’ argument for a more rigorous test for allowing the labor board to reinstate workers. Through their questioning, the justices appeared to see the looser standard that the NLRB was given in this case as an outlier.
Google fires at least 20 more workers who protested its $1.2bn contract with Israel
Google has fired at least 20 more workers in the aftermath of protests over the company's supply of technology to the Israeli government. The total number of terminated staff now exceeds 50, according to the group representing the workers. The protests were centered on Project Nimbus, a $1.2bn contract signed in 2021 for Google and Amazon to provide cloud computing and AI services to the Israeli government. The contract has faced backlash from employees and activists since it was signed, but the objections have grown amid Israel’s ongoing military campaign in Gaza. Dozens of employees occupied company offices in New York City and Sunnyvale, California. The group organizing the protests, No Tech For Apartheid, accused Google of attempting to quash dissent and silence its workers. The company disputed the group's claims and stated that every terminated employee was personally involved in disruptive activity.
Biden administration extends overtime pay to 4 million salaried workers
The Biden administration has unveiled a new labor rule that extends mandatory overtime pay to an estimated 4 million salaried workers, going further than the previous Obama-era rule. Under the rule, employers will be required to pay overtime premiums to workers who earn a salary of less than $1,128 per week when they work more than 40 hours in a week. The salary threshold will increase over time, reaching $58,656 by 2025. The new rule is expected to face legal challenges. Opponents argue that it violates federal wage law and includes lower-paid supervisors and professionals who typically wouldn't be eligible for overtime. Many major business groups have called for a delay in changes to overtime pay regulations due to inflation and worker shortages.
WORKFORCE
Three in 10 Canadians 'unsure' about job security, poll says
Three in 10 Canadians are unsure about the security of their jobs, according to a poll by Nanos Research Group. The net job security level has dropped to its lowest point since May 2020, with 29% of Canadians expressing uncertainty about their job security. However, most Canadians remain confident that they won't lose their jobs, with 44% feeling their job is secure. The data also show a decline in job security sentiment among the youth labor market. Despite this, hard data on job security has not shown significant deterioration, with layoffs still relatively low and job postings above pre-pandemic levels. The unemployment rate in Canada rose to 6.1% in March, with the country losing 2,200 jobs. Economists had expected a gain of 25,000 jobs that month.
HIRING
New York offers tax break for hiring journalists
New York has become the first state to offer a tax break for hiring and retaining journalists, providing a $30m annual incentive. Eligible media companies, including newspapers, broadcast stations, and independently owned media entities, can receive a 50% refundable credit against a journalist's salary, up to $300,000 per business. The groundbreaking measure aims to support newsrooms and boost journalism in the state.
STRATEGY
UBS layoffs to begin in June as part of cost-cutting program
Layoffs under UBS's cost-cutting program, following its takeover of Credit Suisse, will occur in five waves starting in June. The plan aims to eliminate around one in 12 of UBS's Swiss jobs and cut costs by over $10bn. Analysts estimate that between 30,000 and 35,000 jobs could be lost globally. A source described as an insider predicts that 50%-60% of former Credit Suisse staff will be laid off over the five rounds. The subsequent rounds are scheduled for August, September, October, and November, with planned savings of 12 billion Swiss francs ($13.2bn). UBS was not immediately available for comment.
Tesla to lay off thousands of employees
Tesla will lay off 2,688 employees at its Texas factory and cut 3,332 jobs in California, according to Worker Adjustment and Retraining Notification (WARN) notices. The WARN Act of 1988 requires companies with 100 or more employees to provide a 60-day notice for planned closings or mass layoffs. 
CORPORATE
EY the busiest among America's public company audit firms
The 10 accounting firms that had the most public company audit clients in 2023 are the same 10 firms atop the table in auditor market share so far in 2024, with EY leading the way as of January 30th. According to Ideagen Audit Analytics, the company audited 971 public companies registered with the SEC. Deloitte followed in second place, with 900 clients, followed by PwC with 719, KPMG with 605, and Marcum with 402. The top 10 was completed by Grant Thornton, BDO USA, BF Borgers, RSM US and Withum. The Big Four firms dominated the market share of large-accelerated filers, auditing 90% of this market, up 2% from last year. Outside of the Big Four, there were 31 other firms that competed for the remaining 10% of the large-accelerated-filer market, with Grant Thornton holding the largest portion at 4%.
CORPORATE GOVERNANCE
Goldman and BofA face renewed calls to split CEO and chairman's roles
Goldman Sachs and Bank of America are facing pressure to separate their CEO and chairman roles as proxy advisers recommend investors vote for the split. The idea of dividing the roles gained traction after the 2008 financial crisis, and now influential proxy advisers Institutional Shareholder Services (ISS) and Glass Lewis are supporting shareholder resolutions to split the roles. However, getting wider support will be challenging. Norway's sovereign wealth fund, one of the world's largest public investors, has announced its support for the resolutions. Last year, only 16% of investors backed a similar proposal for Goldman Sachs, while 26% of Bank of America shareholders voted in favor. At present, 58% of top U.S. banks have combined CEO and chairman roles. Goldman Sachs and Bank of America argue that their lead independent directors provide sufficient oversight. Other major investors, including BlackRock, Vanguard, and State Street, have also voted against past proposals to split the roles.
INTERNATIONAL
Flexible work arrangements prompt companies in Singapore to rethink workplace policies
The recently announced guidelines on flexible work arrangements have prompted Singapore-based companies to rethink their workplace policies. Many local employers, including those with flexible work arrangements already in place, see the potential for increased productivity and employee satisfaction, but smaller firms appear less convinced. Larger firms are already well down the flexi-work path. Companies like Google and Dropbox have embraced flexible work cultures, allowing employees to work from anywhere. The new guidelines adopt a broad definition of flexible working arrangements that employers must fairly consider and be open to offering. While flexible work arrangements may boost productivity for large companies, smaller firms such as start-ups have noted the need to strike a balance between employee satisfaction and job responsibilities. Both small and larger companies in Singapore agree that flexible work arrangements may help cut costs while attracting and retaining talent.
Health-harming heat stress rising in Europe, scientists say
Europe is experiencing increasingly intense heatwaves due to climate change, according to a report by the EU's Copernicus climate monitoring service and the World Meteorological Organization. Last year, southern Europe faced extreme heat stress, with 41% of the region affected. Scientists say this poses significant health risks to outdoor workers, the elderly, and those with existing conditions. Heat-related deaths in Europe have increased by around 30% in the last 20 years. The report highlights the need for governments to prepare healthcare systems for climate change and protect workers from extreme heat. Greenhouse gas emissions and the El Nino weather pattern were identified as major contributors to last year's exceptional heat. The heat also fueled extreme weather events such as flooding.
OTHER
FHSAA considers sanctioning video gaming as official sport
The Florida High School Athletic Association (FHSAA) is considering sanctioning competitive video gaming, or esports, as an official sport due to increasing interest from member schools. During a recent meeting in Gainesville, the FHSAA Board of Directors discussed esports and conducted a survey to gauge school interest. According to the survey results, 26.4% of responding schools reported sponsoring an esports team or club. Specifically, 24.9% of public schools, 25.2% of private schools, and 39.1% of charter schools indicated having esports programs. For esports to be officially sanctioned by the FHSAA, the organization requires at least 20% of schools in at least two of its four regional sections to offer the sport. With the survey data revealing notable interest in esports programs, the FHSAA is now considering the next steps towards potentially recognizing esports as an official high school sport in Florida.
 


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