Bay Area Students ICE out Tech Companies

Tech companies have long regarded elite schools like UC Berkeley and Stanford as rich talent pools integral to their hiring pipelines. And since the schools receive fees from the companies for the privilege of recruiting on campus, the relationship is generally considered to be a symbiotic one.

However, in recent months, students at Berkeley and Stanford have protested the on-campus recruiting efforts of companies including Salesforce, Amazon, and Palantir because of their contracts with Immigration and Customs Enforcement (ICE) and Customs and Border Protection (CBP).

Student groups like Students for the Liberation of All People (SLAP) at Stanford, with the support of national organizations such as Mijente and the Immigrant Defense Project, allege that by providing services such as facial recognition, hiring technology, and predictive deep learning systems to ICE agents, these companies are not only complicit in but profiting off of the humanitarian crisis along the southern border.

Palantir, for example, has a $41 million contract with ICE to provide an Investigative Case Management system, partly supported by FALCON, another Palantir platform that tracks immigrants’ cross-border activities. Microsoft contracts with ICE to provide cloud computing software and deep learning for identification of immigrants. Palmer Lucky, the controversial founder of VR company Oculus, has been working on a defense technology company that would create a “virtual border wall” using infrared sensor, radar, and cameras.

Student activism serves as yet another example of how tech companies are being asked to reconcile their profit-seeking behavior with both their largely progressive employee base and their largely progressive public image. While as public companies, Salesforce, Microsoft, and Amazon have a fiduciary duty to maximize profits for their shareholders, the recent blowback has shown that there are limits to putting profits over people—limits that, if they have enough of a chilling effect on these companies’ recruiting pools—are bad for business.

Bay Area Students ICE out Tech Companies

Federal Judge Kicks Class Action Brought by Shoplifters

A federal judge in the Northern District of California dismissed a class action lawsuit against Walmart and several other retailers in February. The class representatives were three individuals who shoplifted from Walmart stores in Georgia, Texas, and Florida. They alleged that the retailers engaged in a racketeering conspiracy by forcing them to either enroll in restorative justice classes or face prosecution.

Each of the retailers partnered with Corrective Education Company (CEC), a Utah-based firm. The shoplifters claimed that the retailers routinely took suspected shoplifters to a back room to threaten them with arrest and prosecution. Suspected shoplifters were allegedly forced to both provide a signed admission of guilt and pay up to $500 to enroll in a CEC class. CEC would reportedly award the retailer a portion of the enrollment fee.

The court initially found that it lacked personal jurisdiction over Walmart and most of the other retailers. The shoplifters therefore turned to a provision in the federal racketeering statute that gives courts personal jurisdiction over any defendant who participates in a “single nationwide conspiracy.” However, they could not demonstrate the existence of a nationwide conspiracy without proof that any of the retailers knew the other defendants were partnered with CEC.

Ultimately, the shoplifters chose not to sue CEC. But, CEC has seen its fair share of legal trouble. In 2017, a California Superior Court convicted CEC of extortion under California law. San Francisco City Attorney Dennis Herrera praised the decision and added that “we should all be concerned about privatizing our justice system.” CEC told KTVU that it was “dismayed” by the ruling and felt sorry for future shoplifters who could face “a lifelong scarlet letter because of one bad choice.”

Federal Judge Kicks Class Action Brought by Shoplifters

The Curious Case of Tesla

Tesla had a very public and turbulent 2018. Tesla has always been a unique company. When the Model S first came out, most people had never seen anything like it: an all-electric car with a computer sized display screen, and speed, matching or beating the top sports cars on the market. While Tesla has always seemed to be at the forefront of innovation, its founder, Elon Musk, as well as issues with production and reliability have plagued the company.

Most recently, Tesla announced that it would be closing most of their retail shops and focusing on online sales. This comes after a seemingly endless array of bad news coverage. In August and September of 2018, Musk began to create waves in the media with his increasingly erratic behavior. He was filmed smoking weed on a podcast, he had a very public relationship called into question, tweeted baseless and derogatory statements about a Thai rescue diver, and caught the eye of the SEC with his tweets about taking Tesla private.

As a result of this, Tesla’s stock tumbled to more than 30% below the all-time high they hit in 2017. In addition, the Chief Accounting Officer, Dave Morton, resigned after only a month on the job, citing concerns about the public attention the company garnered. While Tesla finally announced the long promised $35k Model 3, this news was delivered alongside plans to make price cuts on all of their models and the announcement of retail closings. Tesla shares closed Monday down 10% just in the past month. While they have expanded and begun to deliver model 3 orders in Europe, they simultaneously lost the Consumer Reports recommendation due to Model 3 reliability issues.

Through all of the turmoil, Tesla remains a groundbreaking company and Musk recently revealed plans of a new crossover car in their lineup, the Model Y. It remains to be seen which force will prevail: Musk’s erratic behavior and Tesla’s inability to sustain consistent and reliable growth, or Tesla’s forward thinking and innovative work product which continues to push the boundaries of society’s views on the car industry. With the onslaught of Tesla stories in the news daily, it may not take too long to find our answer.

The Curious Case of Tesla

Regulators Put Another Kibosh on TPG/Vodafone Decision Date

The Australian Competition and Consumer Commission’s website once again serves as a burial ground for the TPG/Vodafone merger. Regulators have dropped the provisional date to approve TPG Telecom LTD’s proposed merger with Vodafone Group PLC’s Australian arm.

This is the latest in a series of delays by the Commission. The Commission reportedly needs more information from both parties before it can set a new date. The ACCC is concerned that the proposed merger would reduce competition and raise prices, just as regulators are concerned about the proposed T-Mobile/Sprint merger in the States.

Four players dominate Australia’s mobile telecommunications industry, including TPG and Vodafone. Unsurprisingly, the proposed merger triggers antitrust concerns. Should the merger not go through, TPG would need to offer cheaper mobile plans with larger data allowances in order to compete with Vodafone. Consumers would appreciate this as much as the Australian government. However, Vodafone’s chief executive has a more optimistic opinion of the merger. He claims that the resulting entity would give other market leaders — such as Telstra and Optus — a reason to cut costs. Another win for consumers.

The $15 billion “merger-of-equals” would result in a major rival to Telstra and Optus. Vodafone shareholders would end up with 50.1% of the resulting company, and TPG shareholders would own the other 49.9%. The icing on the cake? The two companies also signed a joint venture agreement to purchase a 5G spectrum at an upcoming government auction. Competition down, high-speed up.

The two companies hope for a merged entity capable of a fixed and mobile offering. But, the merger was expected to go through in 2019. With recent delays, the future of the proposed telecom giant remains to be seen.

Regulators Put Another Kibosh on TPG_Vodafone Decision Date

Employee Advocates Place Pressure on Google to End Forced Arbitration

While the existence of mandatory arbitration clauses in consumer and employment agreements is pervasive, certain big-name tech companies are taking a stand against this forced method of alternative dispute resolution. Since 1992, the amount of non-unionized employers with mandatory arbitration clauses buried within their employment agreements has skyrocketed. It is estimated that more than 60 million American employees have worked under these agreements. The consequences have been great. Many sexual harassment claims have been forced out of a public judicial forum and placed behind closed doors. Uber, for example, was publicly criticized for its use of forced arbitration to silence victims of sexual assault. In response, Uber has since rescinded all arbitration agreements with any employee claiming sexual assault or harassment. Facebook and Google followed suit late last year by announcing that they will longer force those with sexual assault or harassment claims to settle through forced arbitration. Although this is a substantial step toward empowering employees with less bargaining power, neither Uber nor Facebook have completely eradicated forced arbitration clauses within their employment contracts.

Google, on the other hand, announced on February 21, 2019 that it will no longer require mandatory arbitration clauses in any of its employment agreements. This marks a significant stride towards holding employers accountable by providing a meaningful avenue for employees to publicly redress their grievances. However, this was not a result of a single unitary actor. A group of Google employees led the charge, and amidst this tremendous victory, the activist are not stopping to celebrate.

The “Googlers for Ending Forced Arbitration” are a group of Google employees who joined forces to end the use of mandatory arbitration clauses in the employment and consumer context. After a prominent social media campaign in early January, Google finally succumbed to the Googlers’ demands. Nevertheless, one week after Google’s big announcement, six Google employees followed lawmakers to Congress in support of a proposed law that would limit the reach of the Federal Arbitration Act. The proposed bill, FAIR Act, would reduce instances of mandatory arbitration in the employment and consumer context.

This presents an illustrative example of how employees can enact widespread changes within their own company and beyond by standing up and speaking out. Perhaps Google’s latest move will assist with expanding the prohibition of mandatory arbitration. One thing is certain: individual activism and grassroots organization is a powerful advocacy tool.

Employee Advocates Place Pressure on Google to End Forced Arbitration

Trump Administration Sends Mixed Signals on High-Skilled Immigrants

Despite hopes of reprieve, the Trump Administration has steadily increased its rejections and delays of H1-B visa applications. This comes on the heels of previous restrictions, adding a layer of complexity to the application process.

The H1-B visa, often referred to as the high-skill visa, is often used for professionals like programmers and engineers. In the United States, immigrants apply for one of several types of visas, each of which has its own requirements. The H1-B program has faced criticism in the past. Many of its recipients, especially those employed by Indian consulting firms like Tata and Infosys, are believed to not be very highly skilled despite dominating the process. Furthermore, it is highly oversubscribed, with annual lottery rates reaching a mere 35% in 2018. Despite extremely high public support for high skilled immigration the process remains difficult.

Nonetheless, although the United States is widely considered friendly to immigrants—it is consistently one of the most immigrant-friendly nations in polls—it is no longer viewed as attractive as in the past. The American immigration system has long been unique but also remarkably complex and difficult. The number of people receiving visas decreased by 12% last year. This has been particularly acute for high-skilled immigrants. In order to compete for globally itinerant talent, other countries have created special visas and immigration programs, like Canada’s Global Skills visa or China’s Thousand Talents program. Indeed, one website, Move2Canada.com, noted that last year its most popular group was American technology workers.

The Trump Administration has sent mixed signals. The early message from the Trump campaign, and then his administration, was centered around ugly statements about immigrants of any kind. President Trump has remained unequivocal in his calls to reduce illegal immigration and low-skilled immigration, but since taking office he has at times embraced high-skilled immigration, calling for more immigration of foreigners with special skills. Nonetheless, in 2018 he supported the Cotton-Perdue RAISE Act, which would have sharply reduced immigration both low- and high-skilled.

Trump Administration Sends Mixed Signals on High-Skilled Immigrants

Preempt to Protect: The Need for Federal Privacy Protection Law to Curtail the Pending Patchwork of State Laws

In the wake of Cambridge Analytica, the concern for privacy protection is no longer limited to the IT team down the hall. In its place, public protest prompted the first state-wide privacy protection law with the potential to drive comprehensive federal legislation.

The California Consumer Protection Act (“the CCPA”) is a bill the heightens consumer protection and privacy rights for the residents of California. Instead of absently accepting terms and conditions with the presumption to opt-in, users are given clear notice and the power to opt-out if a company intends to collect their data. The CCPA affects for-profit companies doing business in California that earn more than $25 million, gather information from 50,000 or more consumers, or make half of their revenue selling personal information. And with an effective date of January 1, 2020 on the horizon, large companies across the country are panicked.

This much was apparent at recent Congressional Data Privacy Hearings, where the tech industry seemed open and eager to support federal privacy legislation. While it may seem out of character for companies like Facebook and Apple to welcome regulations with open arms, when backlit by the CCPA, their intentions become transparent.

The tech industry wants Congress to pass a more lenient federal privacy law that pre-empts the CCPA and any subsequent state privacy laws. It’s no surprise the industry wants an alternative law to reduce costs and narrow liability. And politicians and advocacy groups have been quick to criticize. But in reality, the push for a Federal Law is more nuanced and necessary than big businesses desire to circumvent the CCPA.

From a business perspective, the patchwork of subsequent state laws, albeit a lawyer’s dream, is a compliance and regulation nightmare. Already there are issues. Washington State has proposed a privacy protection law that parallels the CCPA. But while California specified an exemption allowing financial institutions to adhere to the more lenient privacy regulations of the GLB Act, there is a debate about whether Washington will follow suit.

This concern is just one provisional variance between two actors. A few more states with a few more differences and the ensuing inefficiency is a ripple effect. Companies qualified or doing business in multiple states will face issues categorizing and storing consumer information, not to mention the difficulty implementing internal data management policies.

But most worrying is that a ripple, which started with the best of intentions, may grow into a fatal wave for small companies. Most software and app development start-ups cater to large clients across the county. These fragile companies, meant to fall outside the CCPA, will need to build out different versions of the same product to ensure various levels of compliance. For instance, a company in a state without a privacy law looking to integrate outside software into their product isn’t going to buy the version that adheres to the CCPA. Instead, they are going to want a version that allows them to retain and sell consumers’ personal information. In this way, multiple state-wise privacy laws could increase development costs past sustainability.

Insofar as laying a foundation, the CCPA is a win. But the need for a federal privacy protection law is beyond big business’ desire to cut corners, and costs. A federal law will create manageable bright-line rules and reduce costs or at least provide predictability to start-ups with fixed development budgets. The real victory, for companies and consumers alike, awaits the day privacy protection advocates and the tech industry can find a way to agree on a governing federal law.

Preempt to Protect- The Need for Federal Privacy Protection Law to Curtail the Pending Patchwork of State Laws

Tesla Launches Its $35,000 Model 3, and Some Customers Are Unnerved

Tesla initially launched its Model 3 in 2018, with an original price tag of $45,000. Although Tesla experienced several production delays, the Model 3 became the best-selling luxury vehicle of 2018. The automaker’s primary aim for the Model 3, however, was to open up its sleek doors to a wider consumer audience as Tesla’s first-ever mass-market vehicle.

Tesla’s Model 3 experienced much success in 2018, but by the end of February 2019, it reopened those sleek doors to a Model 3 at a reduced price tag of $35,000. Elon Musk, Tesla’s CEO, stated on social media that to continue selling the Model 3 at the reduced price point the company will have to make several changes. One surprisingly new change is to shift sales to online only. Tesla will also be changing its return policy and allow customers to get a full refund within 7 days or 1,000 miles. The change to online shopping unfortunately will lead the company to close stores and lay off workers. In January alone, Tesla announced it would lay off 7% of its full-time employees.

The loss of these workers comes as a disappointing symptom of maintaining financial sustainability to produce the lower-priced car. The recent backlash, however, comes from customers who purchased the Model 3 at the original price point of $45,000. Customers buying the Model 3 car now will be paying substantially less than buyers before January, even after considering the reduction in Tesla consumer’s Federal subsidy for electric vehicles. The reduced cost affects original Model 3 owners primarily by substantially reducing their car’s resale value. During the backlash from upset customers posting on social media sites, Musk announced reduced cost upgrades for original Model 3 customers. Upgrades available for the lower cost upgrade include the Autopilot and the Full Self-Driving capabilities.

I understand being upset with the possibility of lower resell value. It is very likely that many people who purchased the Model 3 did so as a trend in hope of later reselling it and purchasing the next trend. After all, how many people that can afford a Tesla and likely also purchase iPhones maintain a generation old iPhone? My guess is not many. Consumers with substantial purchasing power shop through trends. My concern, however, is for workers and how Tesla’s changes indicate a way in which innovation may be harming American workers. Online shopping is convenient, but its effects on the availability of retail employment are arguably more detrimental than its convenience is worth. Tesla plans to close stores and continue to dismiss more workers to maintain the low cost of the Model 3. The company does not plan to replace the lost jobs. The changes may be a benefit to Tesla customers, many who can afford to shop through trends, but is of no benefit to the average American, many of which need employment.

Tesla Launches Its $35,000 Model 3, and Some Customers Are Unnerved

Facebook Strikes Again

Once again in the spotlight, Facebook is facing regulatory scrutiny regarding its data privacy practices. After a Wall Street Journal media report revealed that Facebook collects users’ personal information from third party apps, New York Governor Andrew Cuomo is stepping in to order an investigation. These data include sensitive information such as one’s weight, blood pressure, and even ovulation status. In a statement, Facebook claims that the Wall Street Journal’s report instead focuses on how third-party apps are handling user data to create ads and that Facebook is actually making a conscious effort to track and remove data that should not be shared with the company.

As regulatory and public stakeholders become more concerned over data privacy, Facebook continues to struggle to instill confidence in this issue. Just a year ago, in early 2018, the Federal Trade Commission initiated an investigation into claims that Facebook improperly shared information that belonged to 87 million users with British political consulting firm, Cambridge Analytica. This time, Facebook is under the probe of two New York state agencies, New York’s Department of State and Department of Financial Services.

This is an unprecedented move by New York’s Department of Financial Services. The department usually stays clear from direct supervision of social media companies. However, its role in data privacy is growing as the financial sector faces digital privacy concerns. For example, the department is expected to implement the country’s first cybersecurity rules to govern state-regulated financial institutions. These rules would apply to players such as banks, insurers, and credit monitors.

The increasing role of New York’s Department of Financial Services in monitoring entity compliance in spaces such as digital privacy and cybersecurity reveals the many ways various industries are taking advantage of social media. The prevalence of social media and the troves of user data associated with it will continue to raise privacy concerns. As a result, more and more state regulatory agencies, who have previously stayed clear from social media, could find their work necessarily overlapped with and influenced by social media and thus the corresponding data concerns. As this reality becomes more likely, Facebook will find itself dealing with new stakeholders and new regulatory players. The omnipresent role of social media across industries could enable new state agencies to put pressure on companies such as Facebook to hold them accountable for their management of sensitive data. Furthermore, it could also present opportunities for companies such as Facebook to work with new stakeholders on regulation and policies that promote greater user confidence and trust, thus creating a win-win situation for both regulators and corporate players.

Facebook Strikes Again

Chevron Pushes for Greater Workplace Diversity with $5 Million Donation

On February 26, 2019, Chevron announced its $5 million donation to Catalyst, a global nonprofit that works with companies to improve the retention and success of female employees by focusing on the role men can play in changing workplace culture. This donation is the largest in Catalyst’s history and will go toward the nonprofit’s Men Advocating Real Change program (MARC), which aims to empower men, especially male executives, “to engage in workplace inclusion through research-based programming and an online community to continue the conversation” around improving gender diversity. This initiative is targeted toward men because they “hold the vast majority of leadership positions among Fortune 500 companies,” and thus are in the best position to advocate and implement real change.

CEO of Catalyst Lorraine Hariton says this project provides men who are unsure how to help increase diversity and inclusion with important tools to “advocate for women within the workplace.” Some of the specific “trouble spots” targeted by the project include “work processes, practices, and interactions,” such as unconscious bias and stereotyping, which work against gender inclusion in the workplace.

Chevron began working with Catalyst two decades ago, but the oil and gas company’s recent record-breaking donation could suggest a “turning tide within the energy sector,” an industry that has long lagged behind in promoting gender equity in the workplace. Furthermore, it appears that working with MARC has led to improvements at Chevron. Since 2010, the percentage of women on the company’s board has increased 30 percent, and female membership on its management committee has increased from 11 to 20 percent. Chevron CEO Mike Wirth credits an increase in innovation at the company to improvements in diversity, calling the “business case” for initiatives like MARC “compelling.” However, although female hiring in the oil and gas industry has been increasing in recent years, companies are still in need of more women, especially in top executive roles. Chevron and its counterparts in the energy sector still have a long way to go before gender parity is visible on the horizon.

Chevron Pushes for Greater Workplace Diversity with $5 Million Donation