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2nd March 2023
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THE HOT STORY
Judge dismisses lawsuit against McDonald's in sexual misconduct case
A Delaware judge has dismissed a shareholder lawsuit against McDonald's board members challenging their handling of sexual harassment by former chief executive Steve Easterbrook and David Fairhurst, the company's former top human resources executive. Though there were “vibrant” red flags about problems with sexual harassment and misconduct at McDonald’s, the board took action, Vice Chancellor J. Travis Laster of the Delaware Chancery Court said, adding: “The pled facts do not support a reasonably conceivable claim against [the directors] for breach of the duty of oversight." The directors acted in good faith in 2019 when they fired Mr. Easterbrook without cause for having a non-physical relationship with an employee, the judge said. Because he had not been fired for cause, he collected severance that shareholders said was worth $125m. A year after Mr. Easterbrook was fired, the company discovered that he had sexual relationships with at least three company employees, leading to him paying McDonald's $105m to settle claims that he misled the board. Investors argued directors could have saved millions of dollars if they had conducted a thorough investigation of Mr. Easterbrook at the time he was fired, but that the directors refused to do so because they did not want to expose their own allegedly careless oversight.
LEARNING & DEVELOPMENT
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LEADERSHIP
Twitter executive Dalana Brand joins Peloton
Peloton has tapped former Twitter executive Dalana Brand to be its new chief people officer. “Talent density has been a top priority for me at Peloton. Dalana’s addition is the culmination of that strategy, rounding out and completing the leadership team,” Peloton CEO Barry McCarthy said. “As we continue Peloton’s transformation and pivot to growth, her vision and leadership will be critical to our success.” Brand previously served as the chief people and diversity officer at Twitter. She led the company’s global workforce and helped accelerate processes to make the workplace more inclusive. “I’ve made a career out of fostering inclusive employee experiences and leading with transparency and accountability,” Brand said in a statement. “I’m thrilled to join the team at Peloton as the company continues striving to make fitness accessible for all.”
DIVERSITY, EQUITY & INCLUSION
Boards will not be 50/50 until 2038, gender inequality study shows
Analysis by data provider MSCI suggests that gender inequality in boardrooms will not be eliminated until 2038 if the current rate of improvement in female representation is maintained. If the average rate of growth for the number of women on boards between 2018 and 2022 continues, the 2,811 companies which make up MSCI's All Country World Index will not have gender-balanced boards for 15 years. This marks an improvement from data collected in 2021 which suggested the 50% threshold would not be met until 2042. The study shows that the number of board seats held by women increased by 1.9% year-on-year in 2022. In 2022, women held 24.5% of director seats across the global index, compared with 22.6% in 2021. Women held CEO positions in just 163 of the 2,811 companies.
REMOTE WORKING
Activision employees fired for using 'strong language' about remote work policy, union says
The Communication Workers of America (CWA) has said in a complaint filed with the U.S. National Labor Relations Board that video game maker Activision Blizzard illegally fired two employees for using "strong language" in a protest of a new company policy that limits remote work. The union wants the workers reinstated. It says Activision last month announced that staff would be required to report to the office three days per week beginning in April, ending a policy that had allowed more flexible arrangements during the pandemic. Joseph Christinat, a spokesman for Activision, said: “Using abusive, threatening or harassing language toward colleagues is unacceptable and we are disappointed that the CWA is advocating for this type of behavior.”
WORKPLACE
Work besties seek to reunite amid hybrid-work schedules
So-called “work spouses” are trying to reunite in the post-pandemic era, even if they have to make appointments across hybrid-work schedules, reports the Wall Street Journal. “It is harder. You have to be more intentional,” says Michael Dyer, a senior project director at an international nonprofit in Washington, D.C., referring to his friendship with colleague Amy Bernath. The pair initially bonded over their shared affinity for presidential historical sites. Allison Thorson, professor of communication studies at the University of San Francisco, says an office spouse is sometimes what keeps people in their jobs. In a 2020 study of 439 employees, she found that those who did have work spouses were happier at work.
LEGAL
Senate committee to vote on Starbucks CEO subpoena
Sen. Bernie Sanders (I-VT), chair of the Senate Health, Education, Labor and Pensions Committee, says members will hold a vote next week on issuing a subpoena for Starbucks chief executive Howard Schultz to testify at a hearing on the company's compliance with federal labor laws. "Unfortunately, Mr. Schultz has given us no choice but to subpoena him," Mr. Sanders said. "A multi-billion dollar corporation like Starbucks cannot continue to break federal labor law with impunity. The time has come to hold Starbucks and Mr. Schultz accountable." After the planned March 8 vote on the subpoena, the committee will hold a hearing the same day on workers' rights to join unions and will feature AFL-CIO President Liz Shuler, SEIU President Mary Kay Henry and Teamsters President Sean O'Brien.
SCOTUS limits fines for not reporting overseas accounts
In a 5-4 decision, the U.S. Supreme Court has thrown out a $2.72m fine against Alexandru Bittner, a businessman who didn't file reports disclosing foreign bank accounts for five years when he was living in Romania. Mr. Bittner contended the maximum penalty under federal law is $50,000. The dispute centered on the Bank Secrecy Act (BSA), a law designed to combat tax evasion and money laundering by requiring U.S. citizens and residents to report on their foreign holdings. For unintentional violations, the law authorizes penalties of as much as $10,000. The IRS concluded that Mr. Bittner violated the law 272 times, once for each account that was not reported in each of those five years. Mr. Bittner said he violated the law at most five times, once for each annual report he failed to file. Writing for the court, Justice Neil Gorsuch backed Mr. Bittner's reading of the law. "Best read, the BSA treats the failure to file a legally compliant report as one violation carrying a maximum penalty of $10,000, not a cascade of such penalties calculated on a per-account basis," he wrote.
TECHNOLOGY
White House envoy insists automating ports won't cost jobs
The White House’s supply-chain envoy Stephen Lyons has said that the ports and logistics industry must move toward automation, a sticking point in protracted contract talks between U.S. West Coast dockworkers and their employers. Mr Lyons said automation is  inevitable and the industry should “move there deliberately as opposed to getting dragged." Along with outgoing Labor Secretary Marty Walsh, Mr Lyons has been involved in negotiations between the International Longshore and Warehouse Union that represents 22,000 West Coast dockworkers and the Pacific Maritime Association over a new labor agreement to replace one that expired in July. 
WORKFORCE
Amazon employees to be able to use stock as collateral for home loans
Amazon employees will soon be able to use their shares in the company as collateral when buying homes. The retailer, in partnership with online mortgage lender Better.com, will allow employees to pledge stock for loans for down payments, rather than having to sell the stock to raise cash. To protect itself from a continued slide in Amazon’s stock price, Better.com will charge a higher rate on the mortgages of employees pledging stock—between 0.25 and 2.5 percentage points above the market rate, depending on how the down payment is structured. The plan, which doesn’t involve any financial agreement between the companies, is designed to give flexibility to a workforce paid largely in company stock.
ECONOMY
Consumer confidence ebbed away last month
U.S. consumer confidence declined again in February, with the decrease concentrated among households making an annual income of $35,000 or more, though Americans grew more upbeat about the labor market. The Conference Board's consumer confidence index slipped to 102.9, from 106 in January, well below the 108.5 forecast by economists polled by Reuters. "The decrease reflected large drops in confidence for households aged 35 to 54 and for households earning $35,000 or more," said Ataman Ozyildirim, senior director of economics at the Board. The present situation index, which measures consumers' assessment of current business and labor market conditions, ticked up to 152.8 from 151.1 last month, while the six-month outlook index dropped to 69.7, from 76 in January. "Fewer consumers are planning to purchase homes or autos and they also appear to be scaling back plans to buy major appliances," Mr Ozyildirim added. "Vacation intentions also declined in February."
INTERNATIONAL
Saudi diversification plan aims to create more than 64,000 jobs by 2030
Saudi Arabia has outlined proposals for 192 billion riyals ($51bn) of investments by local companies including Saudi Aramco and mining giant Maaden under a government incentive program, called Shareek, as the kingdom seeks to accelerate a plan to diversify its economy away from oil. Abdulaziz Al-Arifi, chief executive officer of the Shareek program, said the projects are set to add almost 467 billion riyals to Saudi Arabia’s gross domestic product and create more than 64,000 jobs by 2030. Steffen Hertog, an associate professor at the London School of Economics, observed: “State guidance does not have to be bad . . . It has been very successful in East Asian cases like South Korea or Taiwan, but there is a risk the projects do not align with private sector interests and capabilities if the planning is too top-down.”
German municipal transport faces strike on Friday
German labor union Verdi and a youth movement called Fridays for Future have jointly called for strikes to disrupt municipal transport in six German states on Friday in pursuit of better pay and conditions and a review of transportation policies. Verdi Deputy Chair Christine Behle has described a recent wage increase offer from federal and municipal employers as "a slap in the face for the employees" and "an unparalleled provocation," adding "The employees will not put up with this and will now step up their fight for their demands," including better wages and conditions, and also sustainable investment in municipal public transport by the states and the federal government. Fridays for Future is also urging the government to comply with the climate targets enshrined in the Paris Agreement. The youth movement says massive investments in new autobahn projects should be stopped and redirected to low-emission alternatives.
Job cuts at Stellantis in Italy
Stellantis and its unions have agreed 2,000 job cuts in Italy this year through voluntary redundancies, workers' representatives have said. The redundancies at the carmaker are equivalent to more than 4% of its current workforce in Italy of around 47,000 people, the FIM, UILM, Fismic, Uglm and Aqcfr unions said in a joint statement, adding that the plan only targets specific functions, and in particular those not directly linked to line production. Incentives will vary based on seniority and proximity to retirement age, the unions said.
 


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