Congress delivers a blow to tech’s ‘bro’ culture
Amid all the hubbub over Ukraine, the Super Bowl, and boisterous Canadian truckers last week, a landmark federal workplace bill—legislation that’s destined to impact top tech companies—headed to the Resolute desk.
Five years after the #MeToo movement roiled America, the U.S. House and Senate both voted to end forced, private arbitration in workplace sexual assault and harassment cases, allowing accusers to litigate their cases in public court. The House registered 335–97 support for the bill, while the Senate signaled unanimous approval via voice vote. President Joe Biden is expected to sign the bill into law.
The legislation follows numerous accounts of women across various industries discovering that their employment contracts require the use of private arbitration to resolve any sexual assault and harassment claims. Lawmakers estimated that tens of millions of employees work under contracts with forced arbitration mandates.
The behind-closed-doors nature of the proceedings allows companies to shield themselves from public airings of misconduct accusations, while also denying accusers the opportunity to bring claims before judges, juries, and appellate courts.
“Arbitration has been a really insidious development,” David Lowe, one of Silicon Valley’s go-to workplace discrimination lawyers, told Fortune as part of an in-depth profile of him published Tuesday. “Employers have realized that they can have a tool to shield themselves from public accountability.”
Critics of the legislation, including the U.S. Chamber of Commerce, argue that the arbitration process provides a speedier, fair outlet for litigating workplace issues compared with the court system, where lawyers can make heady profits off drawn-out cases.
The bill marks another key development in America’s male-dominated tech industry, which continues to evolve following high-profile claims by women of harassment and discrimination.
Several of the nation’s largest tech companies scrapped their forced arbitration provisions for sexual misconduct cases in the late 2010s amid rising pressure from employees. They included Apple, Google, Microsoft, Facebook, and Uber. (Some companies, including Amazon and Twitter, said they never required it.)
It’s perhaps easy to see why. Federal jurors in October issued a $137 million verdict to a former contractor who alleged widespread racism at the company’s Fremont, Calif., plant. (A federal judge has since said the verdict was “extremely high” and could be reduced.)
Two months later, six female employees claimed in a lawsuit that Tesla allowed “rampant sexual harassment” at the plant. While the women were contractually subject to forced arbitration, the soon-to-be-enacted federal legislation likely nullifies the requirement. (Tesla didn’t immediately respond to media requests for comment after the lawsuit was filed.)
While concerns about fat-cat lawyers and drawn-out legal proceedings carry some weight, the past several years in tech have shown that companies respond most quickly when put under the harsh spotlight of public scrutiny.
In the most visible recent example, video game developer Activision Blizzard only sprang into action last year with new antidiscrimination policies—including the end of forced arbitration of sexual harassment claims—when media reports and federal allegations surfaced about a toxic work environment for women.
Key political battles remain on the mandatory arbitration front, including whether to expand the nationwide ban to include gender discrimination claims. For now, though, the #MeToo movement continues to get results.
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A thorn in Big Tech’s side. Texas Attorney General Ken Paxton filed a multibillion-dollar lawsuit Monday against Facebook and Instagram parent Meta, arguing that the company violated state privacy laws through its use of facial recognition technology on both platforms. The lawsuit bears similarities to a class-action case brought by plaintiffs in Illinois, which Meta settled last year for $650 million amid fears that a verdict could result in significantly greater losses. Paxton, a frequent legal antagonist of Silicon Valley giants, filed suit on the first day of early voting in Texas, where he faces a competitive race for re-election.
Still on the hunt. Intel made another move in its turnaround effort Tuesday, agreeing to buy Israel-based chip manufacturer Tower Semiconductor in an all-cash deal valued at $5.4 billion plus debt. With the deal, which comes one month after Intel announced plans for constructing the world’s largest chip manufacturing complex, the California-based company continues to double-down on producing chips for companies that design semiconductors. Tower produces about 2 million wafers per year in several plants spread across Israel, the U.S., and Japan, accounting for about 1% of global chip foundry market share, per TrendForce estimates.
A hefty tax break. Tesla CEO Elon Musk donated shares of company stock worth an estimated $5.7 billion to charity in November, a gift believed to rank among the largest charitable transactions in U.S. history. A Securities and Exchange Commission filing specifies that the donations were made via a trust, but the record does not include the name or names of any recipients. The donations would help reduce Musk’s hefty tax bill, which was expected to exceed $10 billion after he sold more than $16 billion worth of Tesla stock near the end of 2021.
Back to the salt mines. Microsoft plans to reopen many office buildings, including its corporate headquarters in Washington, starting Feb. 28 as fears about the danger posed by COVID-19 wane, The New York Times reported Monday. Microsoft executives said employees will have a 30-day window to “make adjustments to their routines and adopt the working preferences,” with many staffers expected to work from home on a part-time basis. Microsoft is one of the first tech giants to announce firm return-to-office plans after several delays prompted by the Delta and Omicron COVID-19 variants.
FOOD FOR THOUGHT
TikTok on the bloc. Russia’s military build-up along the Ukrainian border is playing out on more than just TVs. Russian residents are filling the social media site TikTok with videos of tanks and troops rolling through their towns, offering an open-source look at developments in the simmering conflict, Axios reported Tuesday. While intelligence officials warn about reading too much into the snippets—they can be misinterpreted or weaponized by those trying to spread misinformation—the social media platform provides a unique view that could help confirm or refute official Russian accounts of the build-up.
From the article:
The world has moved away from a top-down view in which the public learned about major military movements only through big media outlets and governments. The troop buildup around Ukraine is there for everyone to see.
Videos of Russian equipment being transported to the border of Ukraine began surfacing on TikTok during an initial military buildup last spring, and then again late last year as Russia began to build toward its current force posture of about 130,000 troops.
Russian military and open-source intelligence experts, including Michael Kofman of CNA and Rob Lee of King's College, have compiled Twitter threads with hundreds of crowdsourced videos of military equipment and units on the move toward the Ukrainian border.
IN CASE YOU MISSED IT
Mouse- and keyboard-maker Logitech was dying a slow death. A design-focused CEO helped it thrive, by Vivek Wadhwa, Ismail Amla, and Alex Salkever
The rocket debris that’s going to hit the moon isn’t from Elon Musk’s SpaceX—it’s actually from China, by Alex Millson and Bloomberg
Elon Musk reveals the biggest hurdle to overcome before his powerful Starship can reach Mars, by Tristan Bove and Christiaan Hetzner
Salesforce’s Super Bowl ad was a dig at Branson, Bezos, Musk, and the metaverse, by Carmela Chirinos
America must win the race for A.I. ethics, by Will Griffin
BEFORE YOU GO
Stuck in neutral, for now. Dr. Evil might want to save the world (before destroying it) with electric cars, but you’ll have to wait a bit to join the cause. Automakers flooded the Super Bowl with ads for electric vehicles that won’t be available for many months, putting a damper on any spike in demand from the big marketing push, The Verge reported Monday. Only two of the General Motors EVs featured in the Detroit automaker’s Dr. Evil spots are available to buy now, and neither can be found at your local dealership. Excited for the BMW EV SUV pitched by Arnold Schwarzenegger and Salma Hayek? Pump the brakes until at least this summer, when units will start shipping.
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