Woman Sues Walmart for Discriminating Against African-American Customers

Imagine this scenario: you are walking to your local retail chain to buy basic hygiene products, like a comb, hair conditioner, and skin lotion. And every time you want access to this product to either hold it or read the label on the back, you must walk all the way to the cashier and wait for them to be free so that they can unlock the product for you. The vast majority of customers do not have to go through this process, but you do.

 

A California woman, Essie Grundy, and many African-American shoppers at a local Walmart do not have to imagine this scenario. Earlier this year, she noticed that beauty products targeted for African-American consumers at her store were locked up, requiring an employee’s attention in order to unlock the products from a security case. Ms. Grundy went through this inconvenient process on three different occasions.

 

As a result of this disparate treatment, Ms. Grundy has decided to sue Walmart. Citing her feelings of humiliation and discrimination, Ms. Grundy initially spoke with the store’s employees to try and see if the policy of locking up products could be modified. However, she was unsuccessful.

 

According to Walmart, items are locked up for security purposes and the products to be locked up are decided on a store-by-store basis. Moreover, items are locked up because they are more likely to be stolen. Still, despite this rational intent, many African-American customers at Walmart find themselves bearing the disproportionate burden when shopping at the store.

 

Ms. Grundy is represented by Gloria Allred, a high-profile civil rights attorney who is known for taking controversial cases and focuses on the protection of women’s rights. Ms. Allred is known for representing Nicole Brown Simpson’s estate during the O.J. Simpson trial, and more recently, at least 28 women who have accused Bill Cosby of sexual assault.

 

Ms. Grundy is asking for modification of Walmart’s policy toward African-American shoppers, lawyer fees, and $4,000 in damages.

Woman Sues Walmart for Discriminating Against African-American Customers (PDF)

Broadcom Raises Its Takeover Bid for Qualcomm to $121 Billion

On February 5, 2018, Broadcom once again presented an offer to acquire all outstanding shares of common stock of Qualcomm Inc.—although this time, it hopes to seriously bring Qualcomm to the negotiating table.

 

After its initial proposal to Qualcomm was rejected in November 2017 for “dramatically undervaluing” the company, Broadcom has raised the stakes to offer $82 per share, or about $121 billion total. The offer constitutes an ambitious attempt by Broadcom to produce the largest tech industry takeover to date. The hostile takeover of Qualcomm would combine the two mobile phone chipmakers’ businesses to make Broadcom the third-largest chipmaker in the world. Its products would appear in nearly every smartphone, and thus affect several global tech companies, including Apple, Google, and Microsoft.

 

The bid, which Broadcom called its “best and final offer,” comes one month before Qualcomm’s annual shareholder meeting in March. Broadcom hopes to entice Qualcomm shareholders with the higher offer to pressure its executives to begin negotiations. While Qualcomm said in a statement that it would be reviewing the revised proposal, its leadership was sternly opposed to the first takeover offer in November, arguing that Broadcom’s approach was opportunistic as Qualcomm was engaged in a harrowing legal battle against Apple.

 

Further, analysts and investors have expressed doubt as to whether Broadcom’s proposal could realistically win regulatory approval. To mitigate these concerns, Broadcom’s antitrust lawyer Daniel Wall, of Latham & Watkins, said that the company has already begun regulatory approval processes in the U.S., China, and the European Union. Further, the revised offer includes a “significant” breakup fee in case regulators reject the deal, as well as additional cash if the merger transaction has not closed one year after its announcement. With these extra measures, Broadcom hopes to emphasize its commitment to the proposal, although concerns remain about the increasing concentration of the chip industry.

 

While it is unclear whether Qualcomm executives will decide to accept this offer, the industry giant has been struggling following recent legal disputes with customers over licensing fees. Qualcomm recently reported a 96 percent drop in operating income, and its shares slumped 18% in 2017 before rising in November upon news of Broadcom’s first bid. While Broadcom awaits review by Qualcomm’s Board of Directors, only time will tell whether Qualcomm decides to continue investing in its own development, or accept Broadcom’s buyout offer at the highest price offered yet.

Broadcom Raises Its Takeover Bid for Qualcomm to 121 Billion (PDF)

Facebook Follows Trend Away from Cryptocurrencies, Banning Advertisements

Amidst growing pressure to protect the integrity of Facebook’s advertising, Mark Zuckerberg has banned all cryptocurrency ads on the social media platform. According to Facebook’s product management director Robert Leathern, Bitcoin and cryptocurrency ads are frequently associated with “misleading or deceptive promotional practices.” This ban targets ads such as those that read “Use your retirement funds to buy bitcoin!” or other “get-rich-quick” schemes that appear to have no legitimate business behind them.

 

Fraudulent ads have emerged amidst the wave of Bitcoin’s successful, although volatile, growth. As have a number of new currencies and Initial Coin Offerings (ICO’s), which encourage people to buy into cryptocurrencies before they launch in hopes of high future growth. Many companies have used ICO’s to get access to unregulated capital and regulators are noticing. South Korea and China have banned raising money through ICOs and other countries have warned against getting involved with ICOs at all. At home, the SEC recently cracked down on an ICO scam by AriseBank which asked people to fund the world’s first decentralized bank.

 

Many of the ads Facebook is targeting with its new regulation are that of James Altucher, a self-described “crypto genius.” Altucher’s ads have been frequently associated with bad faith companies and scams. The public criticism surrounding Altucher’s ads likely inspired Zuckerberg to rethink his statement made at the beginning of this month, which hinted at admiration for cryptocurrency’s ability to decentralize power. Facebook now claims that Altucher’s ads, as well of those from other well-known cryptocurrency exchanges, will be banned in an effort to protect Facebook users. Leathern stated that Facebook’s intention was to allow users to continue to explore new products on Facebook without “fear of scams or deception.”

 

Facebook’s advertising ban extends to other company-owned platforms such as Instagram, and is just the start of their review of the positives and negatives of cryptocurrencies. While the social network admits that it won’t catch every fraudulent ad, they have has also said that the policy will evolve over time. This update in policy rides the tail of Facebook’s recent changes to its News Feed aimed at limiting the reach of untrustworthy sources. Facebook already attempts to ban many sorts of deceptive ads, such as those that redirect users from seemingly trustworthy news sites to those asking for credit card details. It remains to be seen how Facebook will enforce this new policy along with others recently implemented. More significantly, it seems to be an attempt from Facebook to regain trust following Russian meddling and fake news exploitations on its site.

Facebook Follows Trend Away from Cryptocurrencies, Banning Advertisements (PDF)

Volkswagen: $30 Billion Later and No More Monkeying Around

Volkswagen’s chief lobbyist, Thomas Steg, was suspended in January after news broke that the German carmaker sponsored inhumane chemical testing on humans and monkeys.

 

The controversial study was conducted in 2014 amongst growing public concern about the effects diesel exhaust has on human health. The test consisted of scientists exposing ten monkeys to diesel fumes emitted from a Volkswagen Beetle in a sealed chamber. Volkswagen funded the testing in an effort to show that new diesel vehicles were less harmful than old models. However, the company intentionally manipulated the test’s results: the Beetle used for the experiment was altered to emit much lower pollution levels than similar models out on the market.

 

Steg was in in charge of overseeing Volkswagen’s sustainability matters, which included the European Research Group on Environment and Health in the Transport Sector (EUGT), the organization that employed the testing. EUGT has since been dissolved. According to a Volkswagen senior official, Steg was aware of the monkey testing, but did not make any attempt to stop it.

 

The news of Steg’s departure follows Volkswagen pleading guilty to conspiracy and fraud charges in 2015, in which they fabricated results of emissions tests by putting software in millions of diesel vehicles. Volkswagen doesn’t appear to be the only automaker being called into question. Records from investigations and government documents revealed that Volkswagen and several other European carmakers heavily funded research in an effort to maintain tax benefits for diesel fuel.

 

In spite of the recent illegalities, Volkswagen’s 2017 sales did not reveal any significant decline in revenue. Analysts say the coverage of the animal testing may change this.

 

Volkswagen’s monkey scandal has cost them $30 billion to date.

Volkswagen 30 Billion Later and No More Monkeying Around (PDF)

Four French Women Score Upset Win in Workplace Sexual Harassment Lawsuit

Earlier this month in Paris, four women emerged victorious in a workplace sexual harassment and discrimination suit against employer H. Reinier, a subsidiary of large French cleaning company, ONET. France’s national state-run rail company SNCF subcontracted with H. Reinier to sanitize its facilities. The plaintiffs cleaned trains in Paris’ Gare du Nord Station.

 

The women alleged that their team leader subjected them to frequent bullying and lewd acts over multiple years, including groping one of the women as she leaned over to clean a washroom sink. The harassment intensified when the women supported fellow employee, Rachid Lakhal, after he exposed a kickback scheme within the company. Despite repeated complaints to management, the company refused to transfer the employee responsible to another post. Instead, H. Reinier sanctioned the women for complaining about the harassment.

 

A French labor court heard the women’s claims alongside Lakhal’s whistleblower suit. The court agreed with the plaintiffs and found that H. Reinier failed to implement sufficient measures to protect the women.

 

The court awarded each of the women 30,000 euros for sexual harassment and discrimination. Lakhal was awarded 100,000 euros, in part for giving testimony that corroborated his co-worker’s claims. The case marks precedent as one of the first times a French court has awarded a whistleblower enhanced recovery for supporting workplace harassment allegations.

 

The victory against H. Reinier happens to coincide with an ongoing revolution against sexual harassment in France. Following allegations that Harvey Weinstein sexually harassed various French actresses, French journalist Sandra Muller confessed her own sexual harassment encounter on twitter. She branded the hashtag “balancetonporc” or “expose your pig” and has inspired hundreds of other French women to post their own experiences. The movement has also reignited discussion about some of France’s past political scandals, including an incident that forced International Monetary Fund Director Dominique Strauss-Kahn to resign.

 

Attorney for the plaintiffs against H. Reinier acknowledged that winning a workplace sexual harassment suit is a rare victory in France. Scholars and litigators blame the lack of effective laws and enforcement mechanisms. In fact, France only began providing a civil cause of action for workplace sexual harassment in 1992. However, commentators are hopeful that the recent anti-sexual harassment movement will put pressure on French corporations to root out sexual harassment in the workplace.

 

As of this article, H. Reinier has yet to terminate the employee responsible for the harassment, but plans to implement risk prevention training for all managers and salaried employees. SNCF stated that they agreed with the court’s decision, but do not plan to cut ties with H. Reinier in the near future.

Four French Women Score Upset Win in Workplace Sexual Harassment Lawsuit (PDF)

Wild Takeover Bid for Buffalo Wild Wings

Last month, Roark Capital Group, the private equity owner of several fast-food chains, made an all-cash offer to Buffalo Wild Wings Inc. in the hopes of purchasing the chicken wing chain for close to $2.3 billion at reportedly $150 per share. Reports of this potential deal sent shares of the chicken franchise flying up as much as 28 percent.

 

This takeover bid comes following a difficult year for B-Dubs, as the company struggled due to rising food costs and poor sales. Longtime CEO Sally Smith announced her resignation at the end of the year following a failed proxy battle against activist shareholder Marcato Capital Management. Marcato has since appointed three of its own candidates to the company’s board. Buffalo Wild Wings has yet to name Smith’s replacement.

 

Some argue Roark’s offer to B-Dubs marks an effort to re-enter the chicken market following a failed attempt to purchase Popeyes.

 

Earlier this year, Roark Capital Group backed Arby’s Restaurant Group Inc. as the company submitted a rival bid against Burger King to purchase Popeyes Louisiana Kitchen Inc. In this particular bid, shareholders “would have received $40 a share in cash as well as equity in the combined company…with Roark owning 80 percent.” Popeyes ultimately agreed to be bought by Restaurant Brands International Inc. for about $1.8 billion.

 

The acquisition of Buffalo Wild Wings would fit well in Roark’s restaurant-heavy portfolio of sandwich chain restaurants – Arby’s, Carl’s Jr., and Jimmy John’s, among others.

 

For now, some are left wondering whether Roark’s $150 per share offer comes even remotely close to the right price for Buffalo Wild Wings stock. Just a year ago the stock reached a high of $175 per share and has climbed as high as $200 a share. It is also worth noting Marcato paid $143 for its own stock. The current bid represents a very modest yield for investors. Other potential buyers have yet to express their interest in purchasing the company for more.

 

Representatives by Buffalo Wild Wings and Roark have yet to comment on this rumored deal.

 

Wild Takeover Bid for Buffalo Wild Wings (PDF)

Japanese FTC Tackles Airbnb for Suspected Antitrust Practices

The Japanese Fair Trade Commission (JFTC) launched an investigation on Airbnb last month for violating antitrust laws. Regulators have obtained documents from Airbnb in Tokyo on suspicion that it asked users not to list properties on rival sites.

 

Upon reading an Airbnb contract, one property manager shared that he reluctantly signed an “exclusivity clause” that prohibited agents and owners from posting their listings on other websites. In exchange, Airbnb provided him with access to availability and other vital data.

 

Airbnb, however, denies the claims, saying it does not make property postings conditional on exclusivity. “All hosts and partners in Japan who list properties on Airbnb are able to list them on other platforms,” a Singapore-based Airbnb spokesman said.

 

Airbnb is Japan’s top home-sharing website, with over 50,000 rooms. It competes with hotels and other traditional forms of lodging by letting people rent out their homes or apartments to visitors. The hotel industry views Airbnb and other services as providing unfair competition, since the home-sharing companies provide similar services as the hotel industry without as stringent of licensing requirements and market regulation.

 

News about Airbnb’s suspected antitrust violations come amid a time of heightened competition in Japan’s vacation rentals market.

 

Until recently, peer-to-peer lodging (or minpaku) was illegal in Japan. However, this past June, the government passed a new law that allows private citizens to take in fee-paying lodgers for up to 180 days a year without a hotel operator license. A roster of new players have announced their entry to the market following the new minpaku rules, creating a time of intensified competition in the home-sharing market.

 

Furthermore, Japan is currently facing a tourism boom. As of October, the total number of foreign visitors entering the country reached 23.8 million, making it almost certain to surpass last year’s record of 24 million by the end of the year. This surge in travelers has increased the demand for short-term home rentals.

 

With increased supply and demand for short-term travel stay in the nation, the JFTC may face suspected antitrust violations with heightened scrutiny. If the investigation finds that Airbnb violated antitrust practices by partaking in actions to diminish business opportunities of rival companies or discourage new businesses to enter the market, the company could be subjected to disciplinary action.

 

Japanese FTC Tackles Airbnb for Suspected Antitrust Practices (PDF)

Regal Entertainment in Talks with Cineworld on a Potential Purchase

With companies like Amazon acquiring Whole Foods, and Broadcomm Limited making an offer to acquire Qualcomm, Inc., M&A deals have been active this quarter despite the slowing trend of M&A deals compared to those in 2016. Added to the list of notable companies in talks of potential mergers are Cineworld Group Plc. (“Cineworld”) and Regal Entertainment Group (“Regal”). Cineworld, a U.K. company and British operator of movie theaters, has offered $3.6 billion to acquire Regal in hopes of creating one of the largest movie theater chains worldwide.

 

Regal is not an unlikely choice for Cineworld as Regal has been looking for a buyer for the last couple of years. In 2014, Regal chose to drop its plans on selling itself. It then went on to purchase seven Warren Theaters in Kansas and Oklahoma. In 2016, it acquired Carmike Cinemas. Hoping to enhance its user experience and rival companies such as AMC Theaters and Apple and Netflix’s video streaming services, Regal has positioned itself well to dominate the industry with multiple partnerships to diversify its entertainment offerings and strengthen its hold in cinema. A partnership with Cineworld would fortify Regal’s place in the US cinema industry and expand Cineworld’s reach outside of the UK.

 

When news of the acquisition broke Regal’s shares increased “…as much as 16%…” Cineworld had initally offered Regal an all-cash offer of $23 per share, which analysts found to be a healthy premium over the current trading price of Regal shares. In response to the growing curiosity about the deal, Regal issued the following statement: “No agreement has been reached, and there is no assurance that any transaction will result. Regal Entertainment Group does not intend to make any further comment, or respond to any inquiries, until an agreement, if any, is reached, or discussions have been terminated.”

 

In a separate statement released by Cineworld later, Cineworld stated that it is in “…advanced discussions to acquire Regal and [is] finalizing due diligence on its offer.” Proposing an all-cash offer, Cineworld is said to “…finance its bid through a mixture of incremental debt and a material equity raise by way of a rights issue, including a commitment to full subscription from its largest shareholder, Global City Holdings.” Global City Holdings, a Polish holding company that owns entertainment and real estate businesses in Europe and Israel, owns 28% of Cineworld.

 

With Regal remaining rather quiet on this transaction, analysts find this merger to be a strong one. With attendance decreasing at movie theaters and the films failing to meet high box-office expectations, the cinema industry is scrambling to attract moviegoers who appear to be more captivated by Netflix or Amazon’s home productions than traditional Hollywood films. As Regal is the second largest move theater chain in the U.S. and Cineworld is also the second largest movie theater chain in Europe, both companies are poised to become global leaders in the cinema industry.

Regal Entertainment in Talks with Cineworld on a Potential Purchase (PDF)

Alternate Route for Keystone XL Pipeline Approved by Nebraska Public Service Commission

The Nebraska Public Service Commission provided approval for TransCanada Corporation’s Keystone XL pipeline that would travel over 1,700 miles, transporting crude oil from Hardisty, Alberta, Canada to Steele City, Nebraska. However, the commission did not approve TransCanada’s preferred and proposed route. Rather, the commission approved a modified route that is farther east, adds five miles of pipeline, and is more expensive. This regulatory approval for the $8 billion project, initially proposed in 2008, came through as a 3-2 vote by the commission.

 

Due to the commission’s approval of an alternate route and not TransCanada’s proposed route, TransCanada has not yet committed to constructing the pipeline. TransCanada Chief Executive Officer Russ Girling said that TransCanada will examine how the new route would “impact the cost and schedule of the project.” This new route introduces a problem for TransCanada, as the company would need to approach landowners affected by the new route and procure new easements. TransCanada had already accomplished this task with many of the landowners that were to be affected by the preferred route.

 

Another question looms over whether the construction of the project will move forward: whether there is sufficient demand for the pipeline and interested customers that will contract with TransCanada to ship oil over the pipeline. TransCanada did not specifically identify any customers who committed during the open season that was launched in October, but a company statement reflected that TransCanada expects commercial interest to match up with interest initially expressed when the company applied for the pipeline permit.

 

The construction of the Keystone XL pipeline has long been the center of controversy and protest. Environmental advocates, farmers, ranchers, and other opponents argue that the project will damage the natural resources, endanger available drinking water, and contribute to climate change. Proponents of the pipeline predict that it will provide substantial economic benefits, tax revenue for local governments, reduced fuel prices, and will stimulate job creation.

 

This commission’s decision comes shortly after an already existing TransCanada pipeline spilled 210,000 gallons of oil in South Dakota.

 

To challenge the commission’s decision for the newly approved route, opponents can still attempt to stop the construction of the pipeline by attempting to secure an injunction granted by the state court.

 

Alternate Route for Keystone XL Pipeline Approved by Nebraska Public Service Commission (PDF)

Reddit Visions to Go Public in 2020

During a conversation at the recent Internet Association’s Virtuous Circle Summit, Reddit’s CEO and co-founder, Steve Huffman, said that Reddit may go public in 2020. Although the plan seems to be pretty far from now, Huffman described the going-public strategy as “inevitable” and “the only responsible choice” to reward both employees and investors of the company.

 

Huffman and Alexis Ohanian founded Reddit in 2005 and sold the online discussion platform company to Advance Publications, the parent of several newspapers, and Condé Nast, for $10 million to $20 million. Advance then spun off Reddit, but remains a majority owner. In regards to the going-public plan, Steven Newhouse, head of Advance.net at Advance Publications, told Media Ink that it is possible for Reddit to have an IPO in a couple of years if it keeps on the same trajectory.

 

In addition to the spin-off, Reddit has experienced a number of other rough patches, including the allegations of hacked celebrity photos and child pornography. These controversies were worsened by the unfavorable response from the former CEO, Yishan Wong, who defended Reddit’s hands-off approach by claiming that every man was responsible for his own actions and that the users had the right to choose between right or wrong. Fortunately, Reddit has changed its policy and therefore now bans hateful “subreddits,” or hateful user-created communities.

 

Nonetheless, Reddit has climbed its way to become the eighth most popular site on the internet. Its advertising revenues have also increased five-fold over the past few years. In all, the company is now valued at $1.8 billion.

Reddit Visions to Go Public in 2020 (PDF)