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North American Edition
8th May 2024
 
THE HOT STORY
Workers take bosses to court over return-to-office mandates
After more than two years of fighting against return-to-office mandates, workers are taking their battle to court. Employees are filing lawsuits and complaints with federal labor agencies, arguing that mandates can be unjust, discriminatory, and retaliatory. The outcomes of these cases could force employers to reevaluate their policies. Workers who have filed legal action over remote work say their employers' rejections have been shocking and unfortunate. Some courts have ruled that remote work can be considered a reasonable accommodation. Complaints also include unfair labor practices, such as retaliation for unionization efforts. The fight against return-to-office mandates may be viewed as an uphill battle, but workers believe it is worth it to flex their collective power.
LEGAL
Over 1,000 workers at Stellantis plant vote to authorize strike
The United Auto Workers union has announced that over 1,000 workers at a Stellantis metal stamping plant in Warren, Michigan, have voted to authorize a strike due to health and safety concerns. Grievances have been filed regarding various issues, including ventilation fans, ergonomic matting, personal protective equipment, flooding, basement lighting, and oil leaks. The UAW Local 869 President, Romaine McKinney III, emphasized the importance of workers feeling a sense of ownership in the building. The factory supplies multiple Stellantis plants, and a strike could impact the production of the Ram pickup, Jeep Wrangler, and Jeep Wagoneer. Stellantis stated its commitment to resolving the matter without a work stoppage and ensuring a safe work environment for employees.
Apple store manager violated labor law by asking employee about union support
The manager of an Apple retail store in Manhattan has been found to have violated U.S. labor law by asking an employee about their support for a union campaign, according to a ruling by the National Labor Relations Board (NLRB). The NLRB upheld a decision by an administrative judge, stating that the manager's questioning of the worker, who had raised concerns about pay, was unlawful. The board also affirmed that Apple illegally prevented workers at the World Trade Center store from distributing union flyers. Apple, which denies any wrongdoing, can appeal the decision. This ruling requires Apple to post notices at the store informing workers of their legal rights.
U.S. trade representative calls for review of labor dispute in Mexico
The Office of the U.S. Trade Representative has requested a review of a labor dispute at a facility operated by Atento Servicios in Mexico. This follows a previous request by the U.S. in January to review the denial of association and collective bargaining rights for workers at call centers in Hidalgo state. The review will be conducted by the United States-Mexico-Canada Agreement panel.
WORKFORCE
Tesla halts production at German plant due to protests
Tesla will shut down production at its German plant in Gruenheide for four days due to protests, according to German newspaper Handelsblatt. All employees will work from home on Friday, as stated in an email seen by the newspaper.
REMUNERATION
Wall Street bonuses set to recover, fueled by investment banking
Bonuses on Wall Street are expected to recover this year, driven by the rebound in investment banking. Investment bankers assisting with debt issuances are projected to receive the highest raises in bonuses, ranging from 15% to 25%, as companies sell record amounts of debt. Equity underwriters are also anticipated to see a rise in bonuses by 10% to 20% due to the return of initial public offerings. Alan Johnson, founder of financial services compensation firm Johnson Associates, stated that compensation is increasing across various segments of Wall Street. However, risks remain due to global conflicts. While pay in investment banking is improving, it still lags 2021 levels, except in private equity. Bond traders are expected to receive bonuses 10% to 20% higher, while equity traders may see a 5% to 15% increase. Wealth management executives could have 5% to 10% higher compensation, and asset management and hedge fund employees may receive 5% higher bonuses. The rise in stock prices has boosted asset management profitability despite clients shifting to lower-fee products.
TECHNOLOGY
Warren Buffett fears AI has 'enormous potential for harm'
Warren Buffett, the chairman and chief executive of Berkshire Hathaway, has raised concerns about the dangers of AI, saying it could have devastating consequences on society, much like the atomic bomb, if used incorrectly. Buffett acknowledged that he knew little about how the underlying technology works, but said he had reason to worry. He recently saw his own image and voice so convincingly replicated by an AI tool that he said even his wife and children would have struggled to determine they were fake. Greg Abel, Buffett's designated successor as CEO of Berkshire, noted that the company has begun using AI inside some of its businesses to help make its employees more efficient. Abel said the company was looking to deploy the technology to make certain tasks more effective or safer. Buffett, for his part, said he struggled to predict the ultimate effects of AI on the world. “It has enormous potential for good and enormous potential for harm,” Buffett said. “And I just don’t know how that plays out.” 
STRATEGY
Microchip Technology to temporarily shut down factories due to revenue decline
Microchip Technology will temporarily close its factories for two weeks due to a significant decline in quarterly revenue. Executives and managers will take pay cuts, while factory workers will go on unpaid furlough. The shutdown will affect approximately 900 employees at Microchip's semiconductor fab in Gresham. The company experienced a 41% drop in revenue for the quarter ended March 31, amounting to $1.3bn. Microchip had previously shut down its factories in March and had hinted at additional shutdowns in June. The company's shares were trading at $92.99 on Tuesday morning.
CORPORATE
Why a recession is the best time to launch companies
New research suggests that a recession could be the best time to launch a tech start-up. The researchers - Daniel Bias, an assistant professor of finance at Vanderbilt University’s Owen Graduate School of Management, and Alexander Ljungqvist, Stefan Persson Family Chair in Entrepreneurial Finance at the Stockholm School of Economics - found that tech startups that began operations during the 2007-09 recession, and received their first patent in that time, tended to last longer than tech start-ups founded a few years before or after. Drawing on data from the U.S. Patent and Trademark Office, the authors examined a sample of 6,946 tech startups that launched and received their first patent approval between 2002 and 2012. One group - about 5,734 companies - launched and received their patent outside of the 2007-09 recession. Of those, approximately 70% made it to their seventh year. In contrast, the start-ups that launched and got their first patent during the recession - about 1,212 companies - were 12% more likely to be in business in their seventh year. For startups started during the 2007-09 recession, founding inventors were 25 percentage points less likely to leave their company within the first three years. 
TAX
ERC voluntary disclosure program could be reopened
The IRS is considering reopening its employee retention credit (ERC) voluntary disclosure program, allowing employers to voluntarily repay 80% of the amount received for improperly claimed ERC. In exchange, they would avoid penalties or interest, and the IRS would not investigate their tax returns. The program, which stopped accepting applications in March, may reopen in a reduced capacity.
INTERNATIONAL
China tightens state secrets law in latest national security move
China has revised and broadened its State Secrets Law (SSL) for the first time since 2010, as it aims to tighten procedures for protecting and restricting the disclosure of state secrets. The changes, which took effect on May 1, 2024, are part of China's efforts to expand and enforce national security-driven regulations. The Revised SSL creates challenges for foreign-invested companies operating in China, particularly in terms of data acquisition, management, use, and transfer. Cross-border transfers of data are subject to additional scrutiny and requirements. The definition of "state secrets" remains unchanged, allowing for broad interpretation and extensive government discretion. The Revised SSL introduces new articles that expand the scope of confidentiality obligations to all stakeholders, including non-state parties and foreign-invested companies. Chinese authorities are granted increased powers to conduct inspections and investigations. The Revised SSL also protects "work secrets" generated by state agencies and organizations. The changes pose challenges for due diligence, investigations, and compliance programs in China. They may also lead to increased enforcement actions and deter whistleblowers.
Obesity and low productivity in the U.K. go hand in hand, warns think-tank
A report from the Institute for Public Policy Research, a think-tank, suggests obesity helps to explain why economic inactivity rates due to sickness in the U.K. are at record levels.
 


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