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US Supreme Court Signals Less Scrutiny for Businesses in Two-sided Markets

With such uncertainties, law departments must review antitrust laws to stay ahead of competition. Read


Nonprofit Knowledge: Political Activity for Tax-Exempt Organizations

Make sure your organization knows these laws before election day is here. Read


The Latest Updates on H-1B Visa Sponsorship

There have been more immigration developments in the last two years than in the previous twenty. Read


Modernizing the Antitrust Landscape in the Age of Tech Giants

The Federal Trade Commission has begun hearings on competition and consumer protection. Read


The State of Gender Equality in Parental Leave

More countries are mandating longer maternity and paternity leave. How does your company measure up? Read


In Brief

Today's Top Story

Companies Prep for Potential No-Deal Brexit

The possibility of the U.K. leaving the European Union on 29 March without an agreement is being considered a possible scenario, and companies big and small are growing worried. On 15 November, Prime Minister Theresa May struck a preliminary deal with Brussels on the terms of the exit, but it triggered cabinet resignations, which heightens uncertainty about whether she can get the agreement through Parliament. Under an extreme no-deal scenario, companies in the U.K. will no longer get seamless access to EU markets. Executives and government officials have warned of massive backlogs if customs officials begin inspecting goods moving between the U.K. and Europe. A messy Brexit would also affect the transport, manufacturing, and pharmaceutical sectors. Pharmaceutical firms have been instructed to stockpile drugs, and food companies are stowing away ingredients, reports the Wall Street Journal (16 November, Colchester, Zhang). Because there is so much uncertainty surrounding Brexit, many smaller businesses are not doing anything to prepare because they cannot afford the cost of making detailed fallback plans for something that may never happen.

From "Companies Prep for Potential No-Deal Brexit"
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Legal Actions

California to Conduct Wide-Ranging Review of PG&E, Including Possible Breakup

The California Public Utilities Commission said it is expanding its probe of PG&E Corp.'s safety practices and will investigate whether it should be broken up into smaller utilities. “I will open a new phase examining the corporate governance, structure, and operation of PG&E, including in light of the recent wildfires, to determine the best path forward for Northern Californians to receive safe electrical and gas service in the future,” said Michael Picker, the president of the California Public Utilities Commission. Picker said he was worried about how PG&E handled safety, including its transmission lines that have caused wildfires in recent years. Moody’s Investors Service recently downgraded the ratings of PG&E Corp.’s debt. The company’s shares also fell more than 30 percent on 15 November amid investor concerns that the utility, already facing potential liability costs from 2017 wildfires, could be hit with even more costs related to a current fire in Northern California that has become the deadliest in state history. However, shares recovered after hours. PG&E has said that a problem occurred on one of its high-voltage power lines in Northern California 15 minutes before the start of the Camp Fire was reported in the area 8 November, although no actual connection between the line outage and the fire has been made, reports the Wall Street Journal (15 November, Gold, Blunt).

From "California to Conduct Wide-Ranging Review of PG&E, Including Possible Breakup"
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China Probes Hotels Over Poor Hygiene

An undercover video report in China, posted by internet celebrity Huazong, showed cleaning staff at several five-star hotels using a single cloth to clean toilets, water cups, and basins. In a statement, China's Ministry of Culture and Tourism said it was concerned and has asked authorities in five provinces to investigate the issue. The video features international chains such as Hilton Worldwide Holdings-owned Conrad Beijing and Waldorf Astoria, as well as Marriott International Inc.'s Sheraton and Le Royal Meridien. The video prompted a public outcry and some hotels including the Park Hyatt in Beijing, the Shangri-La in Fuzhou, and the Four Seasons in Shanghai issued apologies and promised to improve quality, reports Reuters (16 November, Li, Jourdan).

From "China Probes Hotels Over Poor Hygiene"
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Governance

Groups Seek to Curb Activist Shareholders

Pension and investment funds are negotiating with public companies on ways to limit the role of activist shareholders, reports the Wall Street Journal (16 November, Rubin). The discussions between the Council of Institutional Investors, which represents large pensions and investors, the Business Roundtable, which represents large U.S. companies, and others are aimed at reining in the proxy balloting process. The groups are negotiating on recommended changes to raise the thresholds for getting a shareholder proposal up for a vote at annual company meetings.

From "Groups Seek to Curb Activist Shareholders"
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Board/Management Relations

3PEA International Hires General Counsel

3PEA International, a provider of prepaid card programs and processing services, has appointed Robert Strobo to general counsel, chief legal officer, and corporate secretary. Strobo succeeds Anthony E. DePrima, who is retiring after nine years with the company, according to a release published by Business Wire (15 November). Strobo previously served as deputy general counsel and vice president at Republic Bank & Trust Company, a state-chartered financial institution headquartered in Kentucky.

From "3PEA International Hires General Counsel"
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Labor and Employment

Foodora Loses Unfair Dismissal Case

The Australian Fair Work Commission has decided that Josh Klooger, a former Foodora deliver rider, had been an employee of the company, not an independent contractor, and was unfairly dismissed from employment. Commissioner Ian Cambridge said Klooger’s dismissal by email without any warning was "plainly unjust, manifestly unreasonable, and unnecessarily harsh.” The control Foodora exercised over Klooger’s shift work including the place of work and start and finish times of shifts contributed to the relationship being one between an employee and employer, reports the Sydney Morning Herald (16 November, Patty). University of Adelaide professor of law Andrew Stewart said the decision was a significant win, “but it is not going to tell us anything definitive about the status of people doing similar work for the likes of Deliveroo or Uber Eats. There are going to have to be cases involving those companies which investigate their particular arrangements. From what I understand, their contracts are somewhat different to Foodora's.”

From "Foodora Loses Unfair Dismissal Case"
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Energy

Canadian Crude Oil Industry in Crisis

Canadian crude oil prices have fallen to record lows and the industry has declared a national emergency. The American benchmark price for oil is now below US$60 a barrel. The price of Western Canadian Select closed just under CA$14 a barrel on 15 November. The crisis has been blamed on a surplus of product but not enough pipeline to move it, reports CTV News (15 November). Alberta's government could lose up to CA$5 billion in revenue if prices remain low through 2019. The low prices could also impact job security. Cenovus, one of Canada's largest oil companies, has already announced a production cut of around 10 percent in order to boost prices.

From "Canadian Crude Oil Industry in Crisis"
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Technology

Furor Over Facebook's Tactics Grows

For more than an hour on 15 November, Mark Zuckerberg, Facebook’s chief executive and chairman, held a conference call with reporters answering questions about how he and Sheryl Sandberg, the chief operating officer, obfuscated problems such as Russian interference on Facebook and how the company had gone on the attack against rivals. Zuckerberg defended the company and Sandberg throughout the call, admitting that with a company of more than 10,000 people, sometimes “you’re not going to know everything that’s going on.” Even while Zuckerberg was defending the company, a furor against Facebook was gathering momentum, reports the New York Times (15 November, Kang, Rosenberg, Isaac). In Washington, Republicans and Democrats threatened to restrain Facebook through competition laws and to open investigations into possible campaign fiance violations. Shareholders increased calls to oust Zuckerberg as Facebook’s chairman and activists filed a complaint to the Federal Trade Commission about the social network’s privacy policies. Facebook has faced several issues since 2016, when it was accused of influencing the outcome of the American presidential election. However, the recent fallout was directed specifically at Zuckerberg and Sandberg. A 14 November New York Times article described how Zuckerberg and Sandberg passed off many critical security and policy decisions in recent years and delayed responses to abuse on Facebook or played down its significance. Many have questioned the accountability of the pair since Zuckerberg owns 60 percent of the company's voting shares and Sandberg is his handpicked No. 2.

From "Furor Over Facebook's Tactics Grows"
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Food and Beverage

Coca-Cola in Hot Water for 'Brain Boost' Drink

Mexican entrepreneur José Antonio del Valle has filed a criminal complaint against Coca-Cola, raising allegations of corporate fraud and industrial property theft against the company at a federal and local level in Mexico. He is seeking almost US$345 million in damages from the world’s largest beverage maker following a dispute over a new drink that aims to boost brain performance. The Mexico City prosecutor’s office has found that Coca-Cola should pay del Valle US$344.5 million in damages. The local prosecutor is expected to serve subpoenas to certain Coca-Cola executives sometime soon before a judge decides whether it can bring charges against the company, reports the Financial Times (15 November, Marriage, Webber). Federal prosecutors are separately investigating whether Coca-Cola committed industrial property theft. The dispute centers on a drink del Valle developed after visiting Japan where he noticed the popularity of an amino acid-based supplement Gaba, which some believe alleviates stress and improves concentration. del Valle launched an early version of a Gaba-based drink in 2012, but stopped production in 2016 to rebrand and revise the formula. After securing bank funding for an international relaunch, he entered talks with Coca-Cola Mexico in 2017 to discuss a commercial partnership involving his product, now named “Go Gaba.” Both parties signed an agreement in December 2017 that stated Coca-Cola and its subsidiaries would not participate in any other project that involved producing, distributing, or selling any beverage similar to Go Gaba for at least 30 months after an initial exclusivity period had ended. Less than six months after the agreement was signed, del Valle was notified by employees at his company, Yaso, that Coca-Cola had launched a new product in Japan called “Fanta Gaba.”

From "Coca-Cola in Hot Water for ‘Brain Boost’ Drink"
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Schwan's Being Sold to South Korean Firm

The Minneapolis Star Tribune (15 November, Painter) reports that Schwan's, a food distributor known for the home deliveries, is being sold to South Korea's largest food company, CJ CheilJedang, for US$1.8 billion. Under terms of the agreement, Schwan's will keep its name, and its corporate office and main operations will remain locally based in Minnesota. "This was the most important part of the decision for the family," said Paul Schwan, a member of Schwan's board of directors.

From "Schwan's Being Sold to South Korean Firm"
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Corporate Social Responsibility

Companies Censured Over Human Rights Transparency

According to the Corporate Human Rights Benchmark (CHRB), 40 percent of companies, including Prada, Starbucks, and Kraft Heinz, do not show any evidence of how they identify and address human rights issues. The not-for-profit group analyses companies, determining how they ensure workers in supply chains are paid a living wage and efforts being made to avoid child labor. The average score across all companies in 2018 was 27 percent, up from 18 percent in the first survey last year, reports the Financial Times (11 November, Thompson). Starbucks, which scored 8.5 percent, said it would review the report in detail and challenge it “in areas we feel the report inadequately reflects our robust commitments.”

From "Companies Censured Over Human Rights Transparency"
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Major Investors Demand More Non-Financial Reporting Disclosure

Major investors, including fund managers and pension bodies, have signed up to the Embankment Project for Inclusive Capitalism (EPIC). The initiative will push companies to disclose hard-to-quantify items such as staffing, governance, and innovation, as well as their effect on society and the environment. At an event in New York on Friday, the group will unveil a series of non-financial metrics that companies can use when communicating with the market, reports the Financial Times (15 November, Walker).

From "Major Investors Demand More Non-Financial Reporting Disclosure"
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