As WeWork continues to self-immolate, news about Adam Neumann’s golden parachute and Softbank’s plans to salvage the company dominate the headlines. There are hot takes. There are some pretty solid jokes. But caught in the crossfire are the workers, who keep getting potentially-lawbreaking missives in the middle of the night regarding their employment status.
Last week, nearly 1,000 WeWork employees across the U.S. and Canada received notice that they would be laid off on December 9th. They were offered jobs at another company, JLL, who is slated to contract them to WeWork “for the time being.” Employees were told that they had to sign the offer letter by Nov. 18th. (The letters went out five days prior). If they didn’t take on the new job (which represented a pay decrease for many people), WeWork would consider that a “voluntary resignation.”
Now, you don’t have to be a labor law expert to know that you can’t fire someone and then tell them that they left voluntarily. Whether a person left their job voluntarily or not can affect their ability to collect unemployment. In WeWork’s case, it also meant that they wouldn’t be eligible for severance. (Note that since the options were “go to a different job” or “we decide you left voluntarily,” there was no option that gave the workers the same severance that their previously laid-off coworkers received.)
In addition, WeWork’s 401k plan uses “last day rules” for 2019, meaning that the employee needs to work there the last day of the year to get their retirement plan’s employer match contributions. It’s a common employee retention plan. If you have to finish the year to get your 401k match, then the deeper into the year you are, the more money you give up by leaving. The problem is that WeWork is letting people go in early December. That means that nobody would get their 401k match for the entire year of 2019.
And those weren’t the only problems. The letters stated that there would a wage freeze at the new jobs through all of 2020. New employer JLL said that was a “typo.” But after being pinballed around so much, it’s easy to understand why the workers might not take that at face value. Moreover, the employees staring their termination in the face were also bound by non-compete clauses keeping them from looking for similar work elsewhere.
On the 22nd, WeWork backpedaled, at least to a few of its employees . They sent out a letter after business hours on Friday, which you may recognize as “the part of the week when corporations drop press releases they hope nobody actually picks up.” But this wasn’t a press release, it was a notice to their own workers. The new letter extends the terms of their employment. If they reject or rescind the JLL job offer, they won’t be laid off until February 20, 2020. They’ll have pay and benefits, but they do not have to report to work.
While that sounds like a pretty generous deal—get paid not to show up!— it’s basically the same as the three-months severance that their group of collective employees was demanding. It also brings them into compliance with New York state laws regarding notice of mass layoffs, which they were previously violating.
That said, the notice itself might not have been fully compliant with NY state law either. It showed up after hours on a Friday and gave them until Monday to respond. It wasn’t marked “urgent,” which the law requires. And many employees who aren’t in New York still seem to be stuck between the same rock and hard place they already were.
All in all, WeWork is planning on laying off 2,400 employees. Meanwhile, WeWork CEO Adam Neumann is currently slated to make $1.7 billion to walk away from his failure. Actually, let’s write that whole number out. Adam Neumann will be given $1,700,000,000 for running his company into the ground.
Let’s say you were there when the Declaration of Independence was signed. And on that day, someone said they were going to give you $19,123.25 every single day of your life. If you never spent any money, and you somehow lived 243 years, you would have 1.7 billion dollars today.
If anyone wants to pay me to run a business, university, or football team into the ground, please contact me with offers.
I’ve seen it happen up close a few times, so I’m pretty sure I know what’s involved. I don’t know if I need some special degree, or if I just point out that I’m a white dude when I apply, but I feel like I’d be pretty good at it.
UPDATE: Our story originally called the collective group a “union,” but per the group’s counsel, “WeWork employees are not part of a union… There is a coalition of cross-departmental employees of WeWork employees acting collectively to secure better employment conditions and demand fair severance packages for all laid off workers. They have been prioritizing and aggressively advocating on behalf of the building and maintenance staff.”
Too connected: FTC eyes Facebook antitrust lawsuit
(BUSINESS NEWS) Following other antitrust hearings, we’re expecting to hear more about the FTC’s antitrust lawsuit against Facebook, soon.
Facebook might be wishing it had kept the “dislike” button.
On September 15, the Wall Street Journal announced that the Federal Trade Commission was preparing a possible antitrust lawsuit against the social media titan. Although the FTC has not made an official decision on whether to pursue the case, sources familiar with the situation expect a determination will be made on the matter sometime before the end of 2020. Facebook and the FTC both declined to comment when asked about the story.
The news comes following a year-long investigation by the FTC that has looked into anti-competitive practices by the Menlo Park-based company. This past July, the United States House of Representatives held hearings in which they grilled the CEOs of Amazon, Apple, Google, and Facebook regarding their business practices. In August, Facebook CEO Mark Zuckerberg also testified in front of the FTC as part of the department’s antitrust probe into the organization.
The FTC seems to be especially interested in Facebook’s past acquisitions of WhatsApp and Instagram, which they believe may have been done to stifle competition. In internal emails sent between Zuckerberg and Facebook’s former CFO David Ebersman back in 2012, the 36-year-old seemed worried that the apps could eventually pose a threat to the social media conglomerate.
“These businesses are nascent but the networks established, the brands are already meaningful, and if they grow to a large scale the could be very disruptive to us,” Zuckerberg wrote to Ebersman, “Given that we think our own valuation is fairly aggressive and that we’re vulnerable in mobile, I’m curious if we should consider going after one or two of them.”
When Ebersman asked him to clarify the benefits of the acquisitions, Zuckerberg stated the purchases would neutralize a competitor while improving Facebook.
“One way of looking at this is that what we’re really buying is time. Even if some new competitors springs up, buying Instagram, Path, Foursquare, etc. now will give us a year or more to integrate their dynamics before anyone can get close to their scale again.” Zuckerberg said.
This isn’t the first time the FTC has investigated Facebook either. Last year the agency fined the company $5 billion for the mishandling of user’s personal information, the biggest penalty imposed by the federal government against a technology company. As a part of the settlement with the FTC in that case, Facebook also promised more comprehensive oversight of user data.
If the FTC does pursue an antitrust suit against Facebook, it could end up forcing the social media giant to spin off some of the companies it has acquired or place restrictions on how it does business. Considering how long it will take to file the litigation and prove the case in a courtroom, however, it seems that Zuckerberg will once again be “buying time.”
What you need to know about the historic TikTok deal (for now)
(BUSINESS NEWS) No one really knows what’s happening, but the TikTok deal’s impact on business, US-China relations, and the open internet could be huge.
So, maybe you’ve heard that Oracle and Walmart are buying TikTok for national security!
Um, not exactly.
Also, Trump banned TikTok!
Sort of? Maybe?
The terms of the proposal seem to shift daily, if not hourly. The sheer number of contradictory statements from every player suggests no one really knows what’s going on.
Just one example: Trump said the deal included a $5 billion donation to a fund for education for American youth. TikTok parent ByteDance, said, “Say what now?”
Here’s what we think we know (as of this writing):
Oracle and Walmart would get a combined 20 percent stake in a new U.S.-based company called TikTok Global. Combine that with current US investors in China’s ByteDance, TikTok’s parent, that would give American interests 53 percent. European and other investors would have 11 percent. China would retain 36 percent. (On Saturday Trump said China would have no interests at all. But that does not jibe with the reporting on the deal.)
Oracle would host all user data on its cloud, where it is promising “security will be 100 percent” to keep data safe from China’s prying eyes. But reporting has differed on whether Oracle will get full access to TikTok’s code and AI algorithms. Without full control, skeptics say, Oracle could be little more than a hosting service, and potential security issues would remain unaddressed.
Walmart says they’re excited about their “potential investment and commercial agreements,” suggesting they may be exploring e-commerce opportunities in the app.
The US Committee on Foreign Investment in the United States, which is overseen by Treasury Secretary Steven Mnuchin, still has to approve any deal.
As for the TikTok “ban” – which isn’t really a ban because current users can keep it – the Commerce Department postponed the deadline for kicking TikTok off U.S. app stores to September 27, to give time for the deal to be hammered out. Never mind that it’s still not clear whether the U.S. government has authority to do that. Unsurprisingly, ByteDance says it doesn’t in a lawsuit filed September 18.
Whatever happens with the whiplash of the deal’s particulars, there are bigger issues in play.
According to business news site Quartz, moving data storage to Oracle mirrors what companies like Apple have done in China: Appease the Chinese government by allowing all data hosting to be inside China. A similar move could “mark the US, too, shifting from a more laissez-faire approach to user data, to a more sovereign one,” says China tech reporter Jane Li.
In the meantime, TikTokkers keep TikTokking. White suburban moms continue to lip sync to rap songs in their kitchens. Gen Z continues to make fun of the president – and pretty much everything else.
And downloads of the app have skyrocketed.
Hobby Lobby increases minimum wage, but how much is just to save face?
(BUSINESS NEWS) Are their efforts to raise their minimum wage to $17/hour sincere, or more about saving face after bungling pandemic concerns?
The arts-and-crafts chain Hobby Lobby announced this week that they will be raising their minimum full-time wage to $17/hour starting October 1st. This decision makes them the latest big retailer to raise wages during the pandemic (Target raised their minimum wage to $15/hour about three months ago, and Walmart and Amazon have temporarily raised wages). The current minimum wage for Hobby Lobby employees is $15/hour, which was implemented in 2014.
While a $17 minimum wage is a big statement for the company (even a $15 minimum wage cannot be agreed upon on the federal level) – and it is no doubt a coveted wage for the majority of the working class – it’s difficult to not see this move as an attempt to regain public support of the company.
When the pandemic first began, Hobby Lobby – with more than 900 stores and 43,000 employees nationwide – refused to close their stores despite being deemed a nonessential business (subsequently, a Dallas judge accused the company of endangering public health).
In April, Hobby Lobby furloughed almost all store employees and the majority of corporate and distribution employees without notice. They also ended emergency leave pay and suspended the use of company-provided paid time off benefits for employees during the furloughs – a decision that was widely criticized by the public, although the company claims the reason for this was so that employees would be able to take full advantage of government handouts during their furlough.
However, the furloughs are not Hobby Lobby’s first moment under fire. The Oklahoma-based Christian company won a 2014 Supreme Court case – the same year they initially raised their minimum wage – that granted them the right to deny their female employees insurance coverage for contraceptives.
Also, Hobby Lobby settled a federal complaint in 2017 that accused them of purchasing upwards of 5,000 looted ancient Iraqi artifacts, smuggled through the United Arab Emirates and Israel – which is simultaneously strange, exploitative, and highly controversial.
Why does this all matter? While raising their minimum wage to $17 should be regarded as a step in the right direction regarding the overall treatment of employees (and, hopefully, $17 becomes the new standard), Hobby Lobby is not without reason to seek favorable public opinion, especially during a pandemic. Yes, we should be quick to condone the action of increasing minimum wage, but perhaps be a little skeptical when deeming a company “good” or “bad”.
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