California Bill Impacts Rules of Employment Across a Swath of Industries

Margot Roosevelt, Johana Bhuiyan and Taryn Luna reported last week at the Los Angeles Times Online that, “California lawmakers rewrote the rules of employment across a wide swath of industries [last week] in legislation that could grant hundreds of thousands of workers new job benefits and pay guarantees.

“After vigorous debates over what occupations should be exempted, Assembly Bill 5, which curbs businesses’ use of independent contractors, gained final approval in the state Senate and the Assembly and was sent to Gov. Gavin Newsom, who has pledged his support.

The 6,700-word bill is one of the most controversial of the year. It could upend the relationship between workers and bosses across businesses as varied as ride-hailing tech giants, construction, healthcare, trucking, janitorial services, nail salons, adult entertainment, commercial fishing and newspapers.”

The LA Times article noted that, “The message of the legislation, said its author, Assemblywoman Lorena Gonzalez (D-San Diego), is ‘we will not in good conscience allow free-riding businesses to continue to pass their own business costs on to taxpayers and workers. It’s our job to look out for working men and women, not Wall Street and their get-rich-quick IPOs.’

Contractors, including many in multibillion-dollar technology companies, are not covered by laws guaranteeing a minimum wage, overtime pay, sick leave, family leave, unemployment and disability insurance, workers’ compensation and protection against discrimination or sexual harassment. Nor do businesses pay into Social Security or Medicare for contractors.

“After months of lobbying by the California Chamber of Commerce and a score of trade associations, AB 5 exempted a host of occupations — but not platform-based gig giants Uber, Lyft, DoorDash, Postmates and others that mounted a powerful push to avoid reclassifying their workers as employees with labor law protections.”

Last week’s article added that, “However, enforcing the law against multibillion-dollar app-based technology behemoths, with a California workforce estimated at some 400,000 full- and part-timers, could involve protracted battles.”

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Women’s Share of Board Seats Rises to 20%

Wall Street Journal writer Rachel Feintzeig reported last week that, “One-fifth of seats on a broad swath of public-company boards are now held by women, a sign of change as U.S. corporations face increased pressure to diversify.

The share of female board members in the Russell 3000 index, which includes most public companies on major U.S. stock exchanges, increased to 20% in the second quarter of this year from 19% the previous quarter, according to Equilar Inc., a governance-data firm. When Equilar began tracking the measure in late 2016, 15% of board seats were filled by women.

“The increases come amid calls for change from big investors and a new California law mandating female representation on public-company boards. In July, the last all-male board among S&P 500 companies—Dallas-based online car-auction company Copart Inc. added a female finance executive to its ranks.”

“Women’s Share of Board Seats Rises to 20%,” by Rachel Feintzeig. The Wall Street Journal (September 11, 2019).

The Journal article stated that, “Most companies seem to be banking on more edicts around diversity. Illinois’s governor in late August signed a bill requiring public companies based in the state to report on the composition of their boards, by gender and ethnicity, as well as on how they promote diversity at the board and executive level.”

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The Business Roundtable Tweaks Its Statement of “the Purpose of a Corporation”

Wall Street Journal writer David Benoit reported recently that, “The leaders of some of America’s biggest companies are chipping away at the long-held notion that corporate decision-making should revolve around what is best for shareholders.

“The Business Roundtable [last month] changed its statement of ‘the purpose of a corporation.’ No longer should decisions be based solely on whether they will yield higher profits for shareholders, the group said. Rather, corporate leaders should take into account ‘all stakeholders’—that is, employees, customers and society writ large.

It is a major philosophical shift for the association, which counts the chief executives of dozens of the biggest U.S. companies as its members. The group, led by JPMorgan Chase & Co. CEO James Dimon, is a powerful voice in Washington for U.S. business interests. It represents a broad swath of American industry, counting among its members the leaders of technology giants and manufacturing companies, airlines and institutional investors, to name a few.”

The Journal article pointed out that, “The Business Roundtable’s old statement of purpose espoused economist Milton Friedman’s decades-old theory that companies’ only obligation is to maximize value for shareholders.

“‘Each of our stakeholders is essential,’ the new statement says. ‘We commit to deliver value to all of them, for the future success of our companies, our communities and our country.'”

The article explained that, “A company’s position on the question of corporate purpose can influence issues as diverse as worker pay and environmental impact. It plays a central role in discussions about stock buybacks, corporate spending and how companies respond to activist investors agitating for moves meant to boost returns.”

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EPA, U.S. Army Repeal 2015 Rule Defining “Waters of the United States” Ending Regulatory Patchwork

A news release yesterday from the Environmental Protection Agency (EPA) stated that, “At an event in Washington, D.C., [EPA] Administrator Andrew Wheeler and Department of the Army Assistant Secretary of the Army for Civil Works R.D. Jamesannounced that the agencies are repealing a 2015 rule that impermissibly expanded the definition of ‘waters of the United States’ (WOTUS) under the Clean Water Act. The agencies are also recodifying the longstanding and familiar regulatory text that existed prior to the 2015 Rule—ending a regulatory patchwork that required implementing two competing Clean Water Act regulations, which has created regulatory uncertainty across the United States.

“‘Today, EPA and the Department of the Army finalized a rule to repeal the previous administration’s overreach in the federal regulation of U.S. waters and recodify the longstanding and familiar regulatory text that previously existed,’ said EPA Administrator Andrew Wheeler. ‘Today’s Step 1 action fulfills a key promise of President Trump and sets the stage for Step 2 – a new WOTUS definition that will provide greater regulatory certainty for farmers, landowners, home builders, and developers nationwide.'”

Yesterday’s release added that, “With this final repeal, the agencies will implement the pre-2015 regulations, which are currently in place in more than half of the states, informed by applicable agency guidance documents and consistent with Supreme Court decisions and longstanding agency practice. The final rule takes effect 60 days after publication in the Federal Register.”

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Real Estate: The Idea of Rent Control is Gaining Steam

Conor Dougherty and California’s escalating housing costs have yielded epic commutes and a rising tide of homelessness. Now they are close to producing a political milestone: a vast expansion of tenant-protection laws that would cap rents statewide.

On Tuesday, the State Senate voted to advance a bill to limit rent increases to 5 percent a year plus a cost-of-living adjustment. The State Assembly, the Legislature’s lower house, could give final approval as early as Wednesday, though passage is uncertain.

The legislation is the latest in a series of measures that have swept through state and local governments this year to regulate rents and strengthen tenant rights. For decades, such provisions have been mostly limited to a relative handful of apartments in the nation’s big cities.”

The Times article stated that, “Normally a leader in progressive politics, California is something of a follower in this case. Earlier this year, Oregon limited rent increases for most tenants to 7 percent annually plus inflation. In New York, state lawmakers significantly strengthened regulations that dictate the rents of almost half of New York City’s rental stock and allowed other cities to impose their own rent caps.

Most states have laws that explicitly ban rent control, a century-old mechanism that has divided tenant activists, who argue that it is the most cost-effective way to quickly curb housing costs, and economists, who largely agree that it constrains the long-term housing supply. Only four states — California, Maryland, New Jersey and New York — have localities with rent control, along with Washington, D.C.

But the idea of rent control is gaining steam, fueled by a far-reaching network of tenant unions and others organizing efforts to combat displacement and skyrocketing rents.”

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In Nebraska, Coalition Calls For Moratorium on Large Livestock Operations

Matt Olberding reported this week at the Lincoln (Nebraska) Star Journal Online that, “A coalition of citizen and environmental groups is calling for a moratorium on large livestock operations in the state.

“At a media event in rural Valparaiso on Monday, the groups unveiled a Change.org petition seeking support to put a temporary stop to what they call ‘factory farms.’

“Randy Ruppert, a Nickerson resident who has been a frequent critic of the Costco poultry processing plant in Fremont, said such a moratorium is needed because state and local zoning laws are inadequate to deal with large confined animal feeding operations.”

The article noted that, “Craig Head, a spokesman for the Nebraska Farm Bureau, said calling for a moratorium, ‘ignores the realities of what farmers must do to build and operate a new livestock farm.’

“‘Nebraska farmers go through an extensive process and must adhere to numerous local, state, and federal regulations, governing everything from where barns can be located, to how they operate for the protection of natural resources and the environment,’ Head said in a statement. ‘A moratorium on Nebraska livestock farms, as has been proposed by some environmental and activist groups, would be nothing short of a disservice to Nebraska farmers, our rural communities, and our state.'”

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USDA Resources Available for Farmers Hurt by 2018, 2019 Disasters

A news release yesterday from USDA’s Farm Service Agency (FSA) stated that, “U.S. Secretary of Agriculture Sonny Perdue today announced that agricultural producers affected by natural disasters in 2018 and 2019, including Hurricane Dorian, can apply for assistance through the Wildfire and Hurricane Indemnity Program Plus (WHIP+). Signup for this U.S. Department of Agriculture (USDA) program will begin Sept. 11, 2019.

“‘U.S. agriculture has been dealt a hefty blow by extreme weather over the last several years, and 2019 is no exception,’ said U.S. Secretary of Agriculture Sonny Perdue. ‘The scope of this year’s prevented planting alone is devastating, and although these disaster program benefits will not make producers whole, we hope the assistance will ease some of the financial strain farmers, ranchers and their families are experiencing. President Trump has the backs of our farmers, and we are working to support America’s great patriot farmers.’

More than $3 billion is available through the disaster relief package passed by Congress and signed by President Trump in early June. WHIP+ builds on the successes of its predecessor program the 2017 Wildfire and Hurricane Indemnity Program (2017 WHIP) that was authorized by the Bipartisan Budget Act of 2018. In addition, the relief package included new programs to cover losses for milk dumped or removed from the commercial market and losses of eligible farm stored commodities due to eligible disaster events in 2018 and 2019. Also, prevented planting supplemental disaster payments will provide support to producers who were prevented from planting eligible crops for the 2019 crop year.”

Yesterday’s FSA update added that, “Agricultural producers faced significant challenges planting crops in 2019 in many parts of the country. All producers with flooding or excess moisture-related prevented planting insurance claims in calendar year 2019 will receive a prevented planting supplemental disaster (‘bonus’) payment equal to 10 percent of their prevented planting indemnity, plus an additional 5 percent will be provided to those who purchased harvest price option coverage.”

“For more information on FSA disaster assistance programs, please contact your local USDA service center or visit farmers.gov/recover. For all available USDA disaster assistance programs, go to USDA’s disaster resources website.”

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Mississippi Considers New Plant-Based Food-Labeling Regulations

Associated Press writer Emily Wagster Pettus reported last week that, “Mississippi is considering new rules that let companies continue to use food-labeling terms such as ‘veggie burger’ and ‘vegan bacon,’ as long as the terms are prominently displayed so consumers understand the products are not meat.

“The state agriculture department on Thursday proposed new regulations for plant-based products that are sold as alternatives to meat.

“The regulations were published weeks after a nonprofit organization that advocates plant-based foods and an Illinois food company sued Mississippi over a labeling law. The suit was filed on July 1, the same day the state enacted the law saying that ‘a plant-based or insect-based food product shall not be labeled as meat or a meat food product.'”

The AP article noted that, “Makers of plant-based foods have also sued Missouri and Arkansas over labeling laws.

The proposed Mississippi regulations say terms such as ‘plant-based’ must be clearly displayed on packaging of products such as vegetarian hot dogs. The rules will be open for public comment for nearly a month. Mississippi Agriculture Commissioner Andy Gipson told The Associated Press on Friday that if there are no changes needed after the comment period, he will issue an order for the regulations to take effect.”

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Lawsuit Accuses ADM of Manipulating Price of Ethanol

Reuters writer Mark Weinraub reported yesterday that, “Global grain trader and food processor Archer Daniels Midland Co allegedly manipulated the price of ethanol to profit from a short position it was holding in the derivatives market, according to a lawsuit by a rival firm.

AOT Holdings, a Swiss company that owns an energy trading subsidiary, filed the class action complaint late on Wednesday in U.S. District Court’s Central District of Illinois Urbana Division, claiming damages from  ADM’s actions of up to $6.33 million.

“The lawsuit follows reporting by Reuters last year that ADM’s ethanol selling had led traders to complain to S&P Global Platts, which provides benchmark pricing for the physical ethanol contract at different U.S. delivery points including Chicago.”

The Reuters article noted that, “Illinois-based ADM, a major ethanol producer, said in an email that it did not comment on pending litigation.”

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Canadian Start-Up Raises $45M- Developing Technology that Could Reduce Pesticide Use

Financial Times writer Emiko Terazono reported today that, “A Canadian start-up behind technology that could sharply reduce the amount of plant pesticides as well as enhance the effectiveness of natural and organic crop protection has raised $45m in early stage funding.

Terramera, which counts Ingka GreenTech, part of the Ikea retail empire, as an investor, uses natural compounds that increase the porousness of a plant cell as well as guiding the active ingredient to the right target. This increases the efficiency of the product, reducing the amount needed to protect crops from disease and pests.”

The FT article added that, “Ospraie Ag Science, the early-stage investment arm of the commodities hedge fund, and food and agritech venture capital firm S2G co-led the capital raise. Other investors are Bold Capital Partners, Energy Innovation and Export Development Canada.”

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