The Trump administration takes its campaign against illegal immigration towards the workplace.
The raids by federal agents on a large number of 7-Eleven supermarkets a week ago were the administration’s first big show of pressure designed to convey the effects utilizing undocumented people.
“We take work-site enforcement very difficult,” stated Thomas D. Homan, the director of Immigration and Customs Enforcement, inside a speech in October. “Not only shall we be likely to prosecute the employers who knowingly hire the illegal aliens, we will detain and take away the illegal alien workers.”
When agents raid workplaces, they frequently demand to determine employees’ immigration documents making arrests. But following the agents leave, it is not easy for that government to meaningfully penalize companies that hire unauthorized immigrants.
Rather, based on police and experts with differing views from the immigration debate, a principal objective of such raids would be to dissuade individuals working unlawfully from turning up for his or her jobs — and also to warn prospective migrants that even when they create it over the border, they might finish up being taken at the office.
Targeting 7-Eleven, a mainstay in working-class communities from New York to California, appears to possess communicated the intended message.
“It’s causing lots of panic,” stated Oscar Renteria, who owns Renteria Winery Management, which employs about 180 farmworkers who’re now pruning grapevines within the Even Caribbean Cruises.
When word from the raids spread, he received a craze of emails from his supervisors asking him how to proceed if immigration officials demonstrated up in the fields. One sent a notice to farmhands warning them to steer clear of 7-Eleven stores in the region.
“Our work pressure frequently visits 7-Elevens,” stated Mr. Renteria. “They’re very nervous. It’s another type of reminding them that they’re not welcome.”
The Federal government largely required a lesser-profile method of enforcement, auditing employers’ compliance in documenting their workers’ status without performing many on-site investigations. A number of employers faced prominent criminal cases recently, but many companies employing workers unlawfully avoid serious charges, since it is frequently impossible to demonstrate they understood someone had handed in fake documents.
“The effects aren’t that harsh, and also the aftereffect of the enforcement is under it ought to be,” stated Jessica M. Vaughan, the director of policy studies for that Center for Immigration Studies, which advocates tighter limitations on immigration.
What the law states requires employers only to make sure that documents seem to be valid, and federal law prohibits them from requiring specific kinds of identification from workers.
Workers in Sanger, Calif., picking grapes that’ll be utilized as raisins. Over fifty percent of California’s agriculture workers lack documents, based on a federal survey.CreditMax Whittaker for that New You are able to Occasions
Employers negotiate reduced administrative fines and often put political pressure on local officials once they become targets, making the punishment for businesses “weaker than it ought to be,” Ms. Vaughan stated. “There are employers to whom the penalties are simply the price of conducting business.”
The greater lasting aftereffect of raids would be to spread fear among undocumented workers, who frequently finish up bearing the brunt of enforcement action in the workplace.
“Having some semblance of anxiety when workers’ being arrested have a behavior shift,” stated William Riley, who spent twenty years being an ICE special agent, under both Plant presidencies and also the Clinton and Obama administrations, and it is now an advisor at Guidepost Solutions, focusing on corporate compliance. Mr. Riley stated that underneath the last administration, everyone was more poor about working unlawfully, presuming they wouldn’t be arrested.
“There was a little more complacency if this was pretty much known there wasn’t anxiety when being arrested inside your workplace,” Mr. Riley stated, nor a deterrent to “using fake documents to obtain a job.”
Mr. Renteria stated he expected raids on farms soon, since the industry is a huge employer of “people with complicated immigration status.” Over fifty percent of California’s agriculture workers lack documents, based on a federal survey. Mr. Renteria worries when agents home in around the Napa area, nobody will remain to reap the grapes.
“They will begin calling their cousins, aunts and uncles and locating the safest place in which the jobs are,” he stated.
The final flurry of public, on-site investigations happened under President George W. Plant, who sent immigration agents to many meatpacking plants along with other workplaces. Individuals raids brought to countless arrests of workers and motivated a number of other employees to prevent reporting to operate, based on local news reports. They also enraged advocates for immigrants and came complaints from business proprietors.
The Federal government altered tack and went after employers largely by inspecting their documents. Such audits bending from fiscal years 2009 to 2013, reaching 3,127, then declined dramatically.
Police force may welcome a far more aggressive approach underneath the new administration. But delivering armed agents towards the doorsteps of yankee companies can be politically uncomfortable for Mr. Trump, that has portrayed themself being an ally to business.
Doris Meissner learned how rapidly local politicians can spring into action when their hometown industries sense danger. As mind from the agency that preceded ICE, the Immigration and Naturalization Service, from 1993 to 2000, Ms. Meissner attempted to pay attention to holding employers accountable.
She approved the beginning of Operation Vanguard within the 1990s, where the agency requested for worker records in a number of Nebraska meatpacking plants. If this came time for you to pursue charges against some employers, Ms. Meissner stated, she began receiving frantic calls from Nebraskans on Capitol Hill.
“The politics will get hot and high,” Ms. Meissner stated. “These are communities which are heavily dependent on these industries. This is actually the major employer. Fundamental essentials major consumers on the market and also the bowling alleys.”
Ms. Meissner states work-site raids do not work within the lengthy term simply because they neglect to address the actual magnet drawing people in to the country: an excuse for laborers.
Cracking lower on employers who violate what the law states is vital, she stated, also it isn’t to employ those who are here unlawfully. But with no visa system allowing unmet labor must be cured with people from other countries, she stated, ICE shouldn’t expect patchwork enforcement stings to influence farms, hotels or meatpackers to prevent employing unauthorized workers.
“When your laws and regulations don’t align using the market, then your marketplace is going to win,” Ms. Meissner stated.
Advocates for immigrant workers stated the raids were just the newest supply of a basic terror reverberating across factory floors since Mr. Trump required office.
“When you’ve this type of public factor happening near to home, folks feel the existence of ICE constantly,” stated Mariela Martinez, the organizing director from the Outfit Worker Center in La. But her clients have families and kids here, Ms. Martinez stated, so that they can’t just pack their bags and go.
“It’s not motivating individuals to self-deport,” she stated. “It’s motivating individuals to not use their labor legal rights. It’s causing individuals to distrust government departments.”
Ms. Martinez helps individuals the outfit industry file claims for back pay using the condition when their employers outlay cash under they’re owed. She stated far less workers requested for restitution this past year in contrast to 2016, partially due to concern their bosses would call ICE when they spoke up.
Which was the punishment one manufacturer meted to Pablo, a 36-year-old sewing worker in La who’d not give his surname while he lacks papers and fears being recognized by ICE. As he received a cheque for $92 we have spent three 11-hour days in a outfit factory recently, Pablo was adamant he deserved more.
His boss responded by providing to pay for him what he was owed, as long as Pablo offered up his street address. After signing another check, Pablo stated, the factory owner stated he would call immigration officials and direct these to Pablo’s door.
“You feel terrible. You are feeling uncomfortable,” Pablo stated. “I am scared.” He known as Ms. Martinez plus they came back together the following day to inform the business the threat constituted illegal retaliation under California law. The business backed lower.
The 7-Eleven raids can give outfit bosses much more control of their workers, Pablo stated.
“Now they are fully aware obama is on their own side,” he stated, “so they think like they are able to intimidate people and treat them badly and they’ll never talk.”
Still, Pablo continues to be here since he was 17, and it has no intends to leave yet. He’s bills to pay for.
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I’m fascinated with individuals who buy troubled companies, then fix them making them lucrative.
Gaston “Gat” Caperton’s story is compelling because Caperton, the boy of the former governor, fixed a sickly furniture company in little (population 610) Berkeley Springs, W.Veterans administration., 2 decades ago and runs it even today.
He didn’t market it to XYZ Corporation or perhaps a private-equity firm. He didn’t break up and liquidate the various components.
Caperton has owned Gat Creek furniture, which manufactures beds, tables and chairs from Appalachian cherry trees and transmits them across the nation, since 1996.
“There’s very few people crazy enough to fabricate pine wood furniture within this country nowadays,” Caperton stated. “We’re just a little crazy and also have enjoyed the majority of the ride.”
His next new career found him on the stretcher — and today it’s a $400 million business]
It required him all an hour or so to decide to purchase the ailing furniture factory.
It had been spring 1995, and Caperton, wanting to test his business chops, was touring the Tom Seely Furniture company in Berkeley Springs.
“I made the decision I wished to buy a small company next within my existence,” stated Caperton, now 50. At that time, he was analyzing companies legitimate estate tycoon Mike Zell in Chicago while focusing on a master’s running a business administration during the night. “I thought manufacturing was various and awesome. I needed to locate a small manufacturing business I possibly could buy.”
Enter Tom Seely Furniture. It had been a $ten million-a-year business founded with a 75-year-old former airman with World War II’s Flying Tigers. Also it needed rescuing.
“The manufacturing process would be a disaster,” Caperton stated. “The factory wasn’t clean. There is lots of sawdust around. However it was dirty both in senses. Inventory was all around the floor. Stuff wasn’t organized. There have been piles of works-in-progress throughout.”
Caperton was an hour or so in to the tour as he had his diagnosis.
“If you can fix the manufacturing within this operation, allow it to be leaner and much more efficient, you can generate lots of cash to pay for lower your debt and also have a lucrative business,” Caperton stated later.
[Stocks are in an exciting-time high. Could it be far too late to obtain the experience?]
The prospective was $3 million within the half-built, unsold furniture and recycleables laying round the factory. Reducing that by half and ensure that is stays this way would mess up $1.5 million in cash that might be accustomed to lessen the debt.
In the finish from the tour, he switched to Seely and stated he would proceed to the city and run the company in a manner that Seely would are proud of.
Caperton had another demand: He wanted Seely to invest in the $4 million purchase cost.
“One, I did not are able to afford,” he stated. “And two, if he’d not finance me, I’d think the company would be a ticking time explosive device. I’d leave.”
Seely decided to a 5-year promissory note for around $3 million. Caperton lent and set in the own money to finance all of those other purchase. He grew to become who owns Gat Creek furniture in The month of january 1996. The name originated from a back-yard creek he along with a brother splashed around in throughout their childhood in Charleston.
Caperton began clearing up the company. He implemented an exercise known as “lean manufacturing” which was popularized running a business circles through the Japanese.
“In lean manufacturing, you attempt to get rid of everything your customer doesn’t pay out for,” he stated.
Quite simply, result in the stuff as efficiently as you possibly can and obtain it out of the door towards the customers.
[The program: You receive over anxiety when speaking in public — and she or he will get millions.]
Electrical costs were shaved.
Floors were taken, and so the sawdust was utilized to power the home heating.
New clamps were bought to chop in 50 % of time it required to create some pieces.
He modernized the store with spray booths and baking ovens. He installed dust collectors that stored the environment clean.
Furniture was built one piece at any given time on order in order that it didn’t sit around, awaiting a purchaser.
“If you are able to build stuff individually as efficiently as 10 at any given time, you eliminate inventory and be much more cost-competitive,” Caperton stated.
Inside a year, he saved his $1.5 million and tried on the extender to pay for lower his debt. Almost exactly based on plan. The organization was soon growing 10 % annually and turning an income.
Gat Creek now employs 140 workers at $20 an hour or so, including healthcare, a 401(k) match, holidays and vacation. Gat Creek sells $18 million price of tables, chairs and beds yearly.
The factory turns a six-figure profit. Caperton stated he adopts an income along with a dividend in the profit. He owns 75 % of the organization. The remainder is a member of a brother who resides in California.
[A tough-charging, decorated and upon the market Marine finds new reward within the antique-restoration business]
“We make a little bit of money,” Caperton stated. “It’s not Apple.”
Caperton is fanatical about keeping costs lower and keeping production lean. He attempts to keep only $200,000 in money on the total amount sheet so he isn’t squandering sources.
The organization sells nothing online. It features a network of 200 traditional furniture retailers (that’s the way i heard about them).
Gat Creek manufactures furniture products for brands for example Room & Board. Another big chunk is perfect for niche customers like the Hershey Hotel, that Gat Creek builds 60 to 70 rooms of furniture every year.
Gat Creek’s gross profit is 15-20 percent.
“We build something for $500 then sell it for $600,” Caperton stated. About 95 % of sales are bed room and dining-room furniture.
Caperton increased up in business family. His father is Gaston Caperton III, who built a effective family-owned insurance provider right into a national business. Caperton III offered the company and joined politics, serving two terms as governor of West Virginia from 1989 to The month of january 1997.
[Warren Buffett’s $100 billion problem]
Youthful Caperton’s mother was the late Ella Dee “Dee” Caperton, an old Miss West Virginia and unsuccessful candidate for West Virginia condition treasurer. After divorcing the governor, Dee Caperton gone to live in France, where she ran a little hotel.
Gaston Caperton IV attended Davidson College in New York, graduating in 1990 having a degree in financial aspects before you go to work with Zell, who’d designed a fortune in tangible estate and exchanging companies.
“Sam likes to take those who are smart and hungry and throw them right into a pool and find out whether they can go swimming,” Caperton stated.
A lot of his six years with Zell involved dealing with his portfolio of producing companies.
“I spent considerable time on the highway going interior and exterior these businesses,” Caperton stated. “They made building products, electrical products, nuts-and-bolts manufacturing. I acquired to determine lots of different companies and just how they ran.” He saw the proper way to do things and the wrong manner.
His application towards the College of Chicago foreshadowed his ambition. It incorporated an essay entitled “I Wish to Own My Very Own Business and make Jobs in West Virginia.”
[Discovery Communications is relocating to New You are able to]
His father, the governor, were built with a suggestion.
“My father stated, ‘I is at Berkeley Springs years back after i was campaigning, and experienced a furniture factory. The man who owned it had been old, why don’t he has a phone call?’”
Youthful Caperton phoned Seely at the begining of 1995. The factory owner mistook the boy for his father, the governor.
“I stated, ‘I’m and not the governor, but as i have you ever at risk, allow me to introduce myself,’ ” Caperton remembered.
He setup a scheduled appointment, required each day removed from his job with Zell making sure he was without a company school class your evening. Caperton travelled to Washington and drove two hrs west. He met Seely after lunch for any factory tour.
And that’s how he found save the small furniture business in Berkeley Springs, W.Veterans administration., and also the 140 approximately families whose livelihoods rely on it.
New You are able to City’s decision to sever ties using its fossil fuel investments is placed to demonstrate a catalyst with other metropolitan areas when confronted with the Trump administration’s staunch support for coal, gas and oil interests, based on several leading economists.
On Wednesday, city officials announced that New You are able to ended up being to divest its pension funds of approximately $5bn in fossil fuel-linked money within the next 5 years. New York’s total pension fund because of its teachers, firefighters along with other city workers may be worth about $189bn.
suggested dumping shares in gas and oil companies. A large number of other institutions, varying from Oxford College towards the Rockefeller Siblings Fund, also have became a member of a movement that activists have to say is worth $6tn in divestments or prevented investments.
“The divestment movement is active and growing by its nature, New You are able to will have a large leadership role,” stated Sachs. “New You are able to hosts Wall Street, the United nations and also the US media, it’ll certainly be the center of climate action too. Despite Trump turning the keys to the gas and oil industry, it’s obvious that if one makes egregious decisions you will not pull it off.Inches
Mayor Bill de Blasio stated its suit against gas and oil companies targeted at ‘standing up for future generations’. Photograph: Off-shore Press / Barcroft Images
The divestment itself is going to be brushed off by major fossil fuel companies but tend to help galvanize political action even while the Trump administration peels away ecological rules and throws open more US land and waters to drilling and mining.
“Divestment isn’t about economically punishing companies, it’s something of collective action that may politically isolate companies,” stated Paul Ferraro, an economist at John Hopkins College.
“New You are able to is fabulous in this way because it’s so visible also it gives others room to produce change. But it’ll only work if everybody follows, similar to how everybody has to lower their electricity use with each other for this to possess a consequence for global warming.”
New York’s move ahead climate isn’t without its critics – environmentalists have were not impressed with De Blasio’s opposition to congestion charging for vehicles and the own frequent vehicle journeys to a health club.
Rightwing groups and business interests will also be opposed. Linda Kelly, senior vice-president from the National Association of Manufacturers, stated the program was an “absurd make an effort to politicize disasters, as opposed to a good-belief effort at securing significant change”.
The deep divisions over global warming in US politics, combined with the ongoing strength of major fossil fuel companies, has tempered the passion even of individuals in support of divestment and action to lessen emissions.
“The big gas and oil companies have a lengthy approach to take and lots of money to create,” stated Ferraro. “When you consider the stock values, it’s difficult to think that non-renewable fuels are facing imminent disaster, as predicted by various environmentalists.”
New York City is seeking to lead the assault on both climate change and the Trump administration with a plan to divest $5bn from fossil fuels and sue the world’s most powerful oil companies over their contribution to dangerous global warming.
Chevron, ConocoPhillips and Shell – to federal court due to their contribution to climate change.
Court documents state that New York has suffered from flooding and erosion due to climate change and because of looming future threats it is seeking to “shift the costs of protecting the city from climate change impacts back on to the companies that have done nearly all they could to create this existential threat”.
The court filing claims that just 100 fossil fuel producers are responsible for nearly two-thirds of all greenhouse gas emissions since the industrial revolution, with the five targeted companies the largest contributors.
The case will also point to evidence that firms such as Exxon knew of the impact of climate change for decades, only to downplay and even deny this in public. New York’s attorney general, Eric Schneiderman, is investigating Exxon over this alleged deception.
New York was badly rattled by Hurricane Sandy in 2012 and faces costs escalating into the tens of billions of dollars in order to protect low-lying areas such as lower Manhattan and the area around JFK airport from being inundated by further severe storms fueled by rising sea levels and atmospheric warming. De Blasio’s office said climate change is “perhaps the toughest challenge New York City will face in the coming decades”.
New York’s lawsuit echoes a similar effort on the west coast, where two California counties and a city are suing 37 fossil fuel companies for knowingly emitting dangerous levels of greenhouse gases. One of those firms, Exxon, has complained that it has been targeted by a “collection of special interests and opportunistic politicians” as part of a “conspiracy” to force the company to comply with various political objectives.
The legal action and the divestment draw perhaps the starkest dividing line yet between New York and the Trump administration on climate change. Under Trump, the federal government has attempted the withdraw the US from the Paris climate accords, tear up Barack Obama’s signature climate policies and open up vast areas of America’s land and waters to coal, oil and gas interests.
De Blasio and the city comptroller, Scott Stringer, have come under pressure for several years from activists to rid New York’s pension funds of any link to fossil fuels, with some environmentalists claiming the city has been too slow to use its clout to tackle climate change.
Stringer admitted the divestment will be “complex” and will take some time but said the city’s pension funds could promote sustainability while also protecting the retirement of teachers, police officers and other city workers.
“New York City today becomes a capital of the fight against climate change on this planet,” said Bill McKibben, co-founder of climate group 350.org.
“With its communities exceptionally vulnerable to a rising sea, the city is showing the spirit for which it’s famous – it’s not pretending that working with the fossil fuel companies will somehow save the day, but instead standing up to them, in the financial markets and in court.”
Christiana Figueres, former UN climate chief and architect of the Paris climate agreement, added: “The exponential transition toward a fossil-fuel-free economy is unstoppable and local governments have a critical role to play. There is no time to lose.
“It’s therefore extremely encouraging to see NYC step up today to safeguard their city and exercise their role as investors to protect their beneficiaries from climate-risk.”
New York joins cities such as Washington DC and Cape Town in divesting, along with universities such as Stanford in California and Oxford in the UK. The Rockefeller Brothers Fund, notable for its links to the past oil wealth of John D Rockefeller, has also sought to divest.
Diane Butrus, a business executive from St. Louis, wandered the streets of Zurich, looking for a bank that would help her keep $1.5 million hidden from America tax collectors.
One bank after another turned her down on that afternoon in 2009. They were worried about a United States crackdown on tax evasion and were no longer willing to shelter American money.
Finally, across the street from a city park, up a discreet elevator, seated in a luxurious conference room, Ms. Butrus found a banker ready to help. His name was Stefan Buck.
Mr. Buck said that his employer, Bank Frey, would be happy to take Ms. Butrus’s money, according to court documents and interviews with Mr. Buck and Ms. Butrus. He instructed her to wire the $1.5 million to Bank Frey. He told her that her name wouldn’t be attached to the new account. It would be known internally as Cardinal, an alias she chose in a nod to her favorite baseball team.
After that, Ms. Butrus contacted Mr. Buck via prepaid cellphones she picked up at a Walgreens drugstore. Every six months or so, she flew to Zurich to withdraw money directly from Mr. Buck. She would return to the United States secretly carrying just under $10,000 in cash — the cutoff for having to make a customs declaration.
The setup allowed Ms. Butrus to avoid paying tens of thousands of dollars in income taxes. And it wouldn’t have been possible without Mr. Buck and Bank Frey.
As much as chocolate and watches, Switzerland is known for bank secrecy. That made the country a destination for money that the wealthy wanted to hide. Last decade, it also made Swiss banks targets for an assault by the United States government, which was tired of Americans escaping taxes on money in offshore accounts.
Many banks came clean, divulging their clients to American authorities. Many Americans, including Ms. Butrus, searched for new places to park their money.
Bank Frey was among the very few to defy the legal onslaught. And Mr. Buck, a clean-cut and self-confident 28-year-old at the time he met Ms. Butrus, was the bank’s public face, responsible for landing and then managing American accounts.
That put Mr. Buck in the government’s cross hairs. In 2013, a federal grand jury indicted him for conspiring to help Americans avoid taxes. It seemed like another blow against Swiss bank secrecy.
But things didn’t go as prosecutors had planned — and the chain of events could have big consequences for America’s fight to keep people from evading taxes using offshore bank accounts.
A Small Outfit
Mr. Buck was raised in Germany. His parents had been championship ice dancers; his mother competed in figure skating for Switzerland in the 1972 Olympics in Japan.
His father ran an insurance company, and Mr. Buck figured that one day he would take it over. But an acquaintance from business school offered him a job in early 2007 at Bank Frey. The bank was tiny, with about 20 employees. Mr. Buck shared an office with four people, including the bank’s receptionist. “We all got along well,” he said.
The business revolved around clients that the bank’s founder, Markus Frey, had accumulated over the years, according to Mr. Buck and the court testimony of another former bank employee. At first, there wasn’t a focus on Americans.
Then, in 2008, a legal earthquake shook the foundations of Swiss banking. American prosecutors started filing criminal charges against bankers and executives who had set up accounts for Americans. In 2009, UBS, the huge Swiss bank, admitted helping Americans hide money from the Internal Revenue Service and agreed to provide authorities with the names of its tax-dodging clients.
Soon Swiss banks were expelling American clients.
Not Bank Frey. It didn’t have offices in the United States, and executives didn’t see it as their responsibility to police whether their clients were paying taxes.
“We decided there’s no reason not to maintain business with American clients,” Mr. Buck said in an interview. Executives consulted with legal experts to ensure they weren’t crossing any lines. “We really tried to make sure that how we did the business is correct.”
Opening accounts for desperate Americans seemed like a golden opportunity. “The positioning of Bank Frey as a solely Swiss private bank is now considered as a competitive advantage by the market,” the bank’s chief executive, Gregor Bienz, said at a board meeting in late 2008, according to records of the meeting. Mr. Bienz didn’t respond to requests for comment.
Over the next few years, hundreds of millions of dollars in American deposits flowed from Swiss banking stalwarts — institutions like Credit Suisse and Julius Baer — to Bank Frey. Its number of American clients roughly tripled, according to court records. By September 2012, nearly half of the bank’s $2.1 billion in assets was held on behalf of American taxpayers.
The Matterhorn Debit Card
Ms. Butrus was one of them. C. Richard Lucy, a former Goldman Sachs and Bank of America executive in New York, was another.
In late 2009, Mr. Lucy’s contact at Julius Baer, where he’d had an account for many years, told him he had to move it elsewhere. Mr. Lucy traveled to Zurich and met with about 15 banks. None would take his money, according to his court testimony.
There was one exception. “A couple of times the name Bank Frey came up as a bank that was new and aggressively seeking out accounts,” he testified. (He didn’t respond to requests for comment.)
Sure enough, when Mr. Lucy showed up at Bank Frey’s offices, Mr. Buck said he would open him an account.
Mr. Lucy was impressed by Mr. Buck’s assurances that his bank had nothing to worry about in the American tax-evasion investigations. “I had found what I was looking for,” Mr. Lucy said.
Mr. Lucy said that Mr. Buck arranged for him to get a Matterhorn-emblazoned debit card that didn’t have Bank Frey’s or Mr. Lucy’s names on it. Mr. Lucy was told that, when he needed money, he should call Bank Frey and ask them to load money onto the debit card. He could use it at any ATM.
Mr. Lucy wanted to bring some account documentation back to New York. He said Mr. Buck advised him not to take anything with Bank Frey’s name on it. (Mr. Buck denies giving that advice.) Mr. Lucy took a pair of scissors and snipped Bank Frey’s name and logo off the paperwork.
Back in Manhattan, Mr. Lucy bought a prepaid phone card for his calls to Zurich. He made them from a pay phone outside his apartment building. When that phone was damaged, the only other functioning pay phone he could find nearby was inside the kitchen of a boutique hotel. Surrounded by the kitchen’s hubbub, he chatted on the phone with his Swiss banker.
By the turn of the decade, other Swiss banks were booting their American customers — and handing them glossy Bank Frey brochures on the way out the door.
Mr. Buck, who eventually rose to be Bank Frey’s head of private banking, said he felt he wasn’t doing anything wrong. All the same, he warned one client, Christine Warsaw, against sending banking instructions through the United States Postal Service, she said in court. “No USPS, use fax,” she wrote in a note to herself. Mr. Buck said he didn’t tell her not to send materials through the mail.
By 2011, it was dangerous for Americans to keep their money in undeclared offshore accounts. More banks were handing over client lists to the Justice Department. If you showed up on a list, prosecutors might pursue you.
A safer option was to turn yourself in to the I.R.S. through a voluntary self-disclosure program. It allowed taxpayers to pay back taxes, cooperate with investigators and move on with their lives.
Ms. Butrus closed her Bank Frey account and eventually declared the money to the I.R.S. She paid her taxes and a stiff penalty and pledged to help the I.R.S. and prosecutors. Mr. Lucy did, too. On disclosure forms, both identified Mr. Buck as their relationship manager.
Prosecutors were hunting for bankers to hold accountable. The theory was that bankers knew they were enabling Americans to break the law and therefore were part of a conspiracy to defraud the United States government. Prosecutors turned to people including Ms. Butrus and Mr. Lucy.
By 2013, more than 20 employees of Swiss financial institutions had been criminally charged. At least a dozen pleaded guilty and received a fine, probation or both. Several hunkered down in Switzerland, which refused to extradite its citizens to the United States for actions that weren’t illegal in Switzerland.
None had actually gone on trial.
‘Do It Now’
At 5 o’clock one morning in April 2013, Mr. Buck was awakened by a phone call. Bank Frey’s chief executive was on the line. “Go look at Bloomberg,” Mr. Buck recalls him saying, referring to the business-news service.
“I’m sleeping,” Mr. Buck said he replied.
“Do it now,” his boss ordered.
Mr. Buck pulled out his cellphone. There it was: an article saying he had been indicted.
Terrified, Mr. Buck skimmed the indictment. The indictment made clear that his former clients were assisting the government. “It was surreal,” Mr. Buck said.
Mr. Buck, 32 years old at the time and single, went to work to hand in his I.D. card and cellphone. He was placed on paid leave; the bank would cover his legal expenses.
Then Mr. Buck headed to his sister’s house. It was her husband’s birthday, and they were hosting a barbecue.
His sister, Sylvia Muther, was nearly nine months pregnant. “We were scared he’d go to jail,” she said. “We tried not to think about that.”
“I got hammered,” Mr. Buck said.
Mr. Buck spent months weighing his options. He could plead guilty and be done with it. He could spend the rest of his life in Switzerland, which wouldn’t extradite him. Or he could fight the charges.
That third road was perilous. If Mr. Buck won at trial, he would be free — and the Justice Department’s fight against bankers who enable tax evasion would be dealt a serious blow. If he lost, he was looking at up to five years in prison.
In October 2014, one of UBS’s top executives, Raoul Weil, went on trial in Florida. Federal prosecutors accused him of helping clients hide billions. Mr. Weil’s lawyers argued he had no knowledge of or responsibility for what had happened. The jury deliberated for barely an hour before acquitting him.
The same week, a Los Angeles jury acquitted an Israeli banker who faced similar accusations. The Americans’ pursuit of foreign bankers no longer looked invincible.
A few months later, on a cloudy morning in January 2015, Mr. Buck was skiing with friends in the Swiss Alps. Above the tree line, they started their descent.
A sign on the slope marked the boundary between France and Switzerland. Mr. Buck realized he was crossing an international border — and that meant he theoretically could be picked up on an American arrest warrant in France. “I was scared,” Mr. Buck said.
He told his friends to continue without him. He snapped off his skis, trudged back up the slope and skied down the Swiss side of the mountain.
Mr. Buck realized he couldn’t spend the rest of his life fearful of crossing a border. “There was no way I was just going to stay in Switzerland,” he said.
Mr. Buck told his lawyer, Marc A. Agnifilo, that he wanted his day in court.
Coming to America
On Nov. 9, 2016, Mr. Buck boarded a flight to New York. He had spent the previous two nights too scared to sleep. Mr. Agnifilo had negotiated with Manhattan prosecutors to let Mr. Buck out on bail once he arrived. The catch was that he would have to stay in the United States, with his passport confiscated, until his trial.
“Do you have any idea when I’m going to come back?” he asked Mr. Agnifilo.
“No,” his lawyer responded. “Hopefully you don’t have a cat you need to feed.”
An I.R.S. agent collected Mr. Buck as he exited the plane in New York. He was fingerprinted, photographed, shackled and driven to a prison next to the Brooklyn Bridge. He spent the night with a cellmate whose hedge fund had been raided that morning by agents with machine guns.
The next day, Mr. Buck pleaded not guilty and was released on bail. He moved into an Upper East Side apartment, paid for by Bank Frey, which by then had ceased operations, its business model seemingly up in smoke.
It would be months before his trial was scheduled.
Mr. Buck made the most of the free time. He trained in Central Park for the New York City Marathon. He became a Yankees fan. For New Year’s, he went to Miami with friends. Since he had no I.D., he couldn’t fly; instead he spent 33 hours on a Greyhound. “He sees it all as an adventure,” Mr. Agnifilo said.
He spent much of his time in Mr. Agnifilo’s 26th-floor law offices, helping his lawyers translate German-language documents.
The crux of the defense was that the responsibility to pay taxes and declare income did not rest with Mr. Buck. It was his clients who had decided not to pay taxes. He was under no obligation to tattle; in fact, he was prohibited from doing so by Swiss bank-secrecy laws.
Trial preparations dragged on, partly because Mr. Agnifilo also was representing Martin Shkreli, the hedge fund manager who eventually would be convicted of fraud.
Mr. Buck had heard of Mr. Shkreli. He hadn’t realized they would be sharing a lawyer. Mr. Agnifilo and Mr. Buck both recall shouting matches over whether the lawyer was sufficiently devoted to his client’s case.
Mr. Buck’s trial started in October. Prosecutors branded him as a crucial cog in an international tax-evasion scheme.
Mr. Agnifilo decided that Mr. Buck shouldn’t testify. While the defendant was confident of his innocence, the cross-examination promised to be brutal. And Mr. Buck’s English was imperfect.
Jurors heard from a parade of Mr. Buck’s former clients, including Ms. Butrus and Mr. Lucy. They testified that Mr. Buck and Bank Frey had been instrumental in allowing them to dodge taxes.
“We didn’t want anyone, specifically the I.R.S., to find out we had an account at the time,” Ms. Butrus testified.
Prosecutors said all the secrecy — the nameless debit cards, the scissored bank paperwork, the shadowy phone calls — showed Mr. Buck knew what he was doing was wrong. “These are techniques used by a person who is trying to keep from getting caught, not by a person who thinks he’s operating legally,” said Sarah E. Paul, an assistant United States attorney, near the end of the trial.
Then it was Mr. Agnifilo’s turn.
“At the center of the crime scene, there is an American with a pen,” he intoned. “Stefan Buck has nothing whatsoever, nothing whatsoever, to do with the choice that an American taxpayer makes” to not declare offshore assets.
Mr. Agnifilo said the fact that Mr. Buck came to America, rather than staying in Switzerland, confirmed that he had nothing to hide. “Let Mr. Buck go back to Switzerland,” he finished.
It was a moving performance. “I’m close to crying the first time in 25 years,” Mr. Buck wrote on a Post-it note he handed his lawyers.
The judge, Jed S. Rakoff, also was impressed. “I knew you were a powerful orator,” he told Mr. Agnifilo after the jury left, “but you have exceeded all bounds.”
The jury deliberated for a little more than a day. On Nov. 21, Mr. Buck was sitting on a toilet in the courthouse bathroom when the verdict came in. He hustled to the courtroom.
A pair of United States Marshals hovered at the back. “Are they here for me?” Mr. Buck recalled asking his lawyer.
No, Mr. Agnifilo fibbed. He knew the marshals were there to take Mr. Buck into custody if he was found guilty.
The jury filed in and delivered the verdict: not guilty.
Afterward, Mr. Buck spoke to the jurors in the hallway — the first time they had heard his voice. “Happy Thanksgiving,” he told them.
A Changed Calculus
Mr. Buck’s acquittal reverberated through the legal community. The Justice Department had now lost the three cases it had tried against foreign bankers who helped Americans avoid taxes.
Dozens more cases are pending. Those who represent accused Swiss bankers say they expect Mr. Buck’s verdict to embolden defendants and to cause prosecutors to think twice before bringing new charges.
“It should change their calculus,” said Marc S. Harris, a lawyer at Scheper Kim & Harris, who successfully defended the Israeli banker in 2014. He said the cases represented a “misguided effort” by the Justice Department to respond to political pressure to prosecute bankers.
In early December, Mr. Buck’s family and friends greeted him at the Zurich airport with a giant welcome-home poster. His priority was to get to the Alps for peak ski season.
“The timing of my return is perfect,” he said. He hopes to get back to work soon in the Swiss finance industry.
Global stock markets are gone for good 2017 on record highs, gaining $9tn (£6.7tn) in value within the year as a result of strong worldwide economy, President Jesse Trump’s tax cuts and central banks’ go-slow method of easing financial support.
The FTSE 100 hit a brand new peak working in london, by having an all-time closing
a lot of 7687.77, getting earlier hit a brand new all-time peak of 7697.62. The key United kingdom index was boosted with a late boost in mining stocks as commodity prices rose against a less strong dollar and optimism increased concerning the Chinese economy, departing the index up 7.6% within the year.
In global terms, the MSCI all-country world index acquired 22% or $9tn around the year for an all-time a lot of 514.53. The rival attractions of bitcoin, up nearly 14 occasions within the year, and concerns about war with North Korea, political upheaval in Europe using the Catalan separatist movement in The country as well as an inconclusive German election unsuccessful to dampen the party mood.
MSCI all country exchange index
Craig James, chief economist at Sydney-based fund manager CommSec, stated those of the 73 bourses it tracks globally, basically nine have recorded gains in local currency terms this season. The important thing for 2018 is going to be whether central banks conserve a benign method of reducing their financial support, he added, using the Fed and Bank of England raising borrowing costs only progressively this season. Low interest and quantitative easing, where central banks buy bonds from banking institutions, happen to be a significant support for investors and asset prices recently.
“For the outlook, the important thing concern is if the low growth rates of costs and wages continues, thus prompting central banks to stay around the financial policy sidelines,” stated James. “Globalisation and technological change happen to be influential to keep inflation low. In a nutshell, consumers can purchase goods every time they want and wherever they’re.Inches
President Trump’s political agenda would be a main factor for investors in 2017. The United States president’s goverment tax bill, which finally undergone Congress in December, fanned hopes that companies would use their windfalls in the changes to grow their companies or return cash to shareholders. A spate of latest mergers, including Disney’s $66bn move for Rupert Murdoch’s 21st Century Fox, France’s Unibail-Rodamco buying shopping center specialist Westfield for $25bn and GVC saying yes an offer for Ladbrokes Barrier, also helped sentiment.
Regardless of the FTSE 100’s latest record, its annual 7.6% increase was dwarfed through the 19% gain recorded by Japan’s Nikkei 225, the 32% rise around the Nasdaq 100, the near 13% hop on Germany’s Dax and also the almost 26% boost towards the Dow jones Johnson Industrial Average.
Within the year, the FTSE 100 has added £141bn to the need for Britain’s top companies. However it has lagged rivals because of concerns concerning the more and more tricky talks around the the UK’s departure in the EU. However, a breakthrough deal around the Irish border and citizens’ legal rights in December lifted a number of that cloud, and nearly 5% from the FTSE 100’s annual gain arrived the ultimate month of the season following a Brexit agreement. Its low reason for 7093 is at early Feb, as Trump’s first attempt for a travel ban upset investors.
There have been also currency issues for that FTSE 100. An incomplete recovery within the pound from the publish-referendum lows – sterling had fallen by almost 20% at its worst but ended the entire year lower under 10% – hit the overseas earners which dominate the 100 index, given that they take advantage of a less strong United kingdom currency.
The mid-cap FTSE 250 index, containing more domestically focused companies, also outperformed the FTSE 100, climbing greater than 14% within the year.
Craig Erlam, senior market analyst at online buying and selling group Oanda, stated: “The FTSE 250 began around the back feet at the beginning of the entire year when compared to FTSE 100 [because of Brexit concerns], with sentiment for the United kingdom economy being more pessimistic than now. Because the year has progressed though, it’s become obvious the downturn in the economy within the United kingdom is not as severe as some feared while progress within the negotiations provides expect domestic stocks, benefiting FTSE 250 companies within the FTSE 100.”
The very best performers within the FTSE 100 within the year were NMC Health, which pleased investors with news of their expansion into Saudi Arabia, Worldpay following a merger approach from US payments firm Vanti, and housebuilders Persimmon and Berkeley, which retrieved using their publish-EU referendum falls.
The Brand New You are able to Stock Market in New You are able to City. Photograph: Came Angerer/Getty Images
Why stock markets have hit record high
Listed here are five reasons for the record-breaking run for global stock markets this season.
Boom in global growth
Almost ten years because the economic crisis sparked economic decline all over the world, 2017 was the entire year when global growth returned in an instant. Failure by rightwing populists to get power in Europe brought to political stability, enhancing the single currency bloc to recuperate after many years of tumult, while China stored up its rate of expansion despite fears more than a sharp slowdown. Based on the OECD, global real trade growth faster from 2.6% in 2016 to 4.8% this season and world GDP growth leaped from three.1% in 2016 to three.6% in 2017.
Loose tax and financial policy
Markets have obtained a dual boost from low interest and tax cuts this season, stimulating interest in shares. Jesse Trump’s US corporate tax rate cuts are anticipated to improve company profits within the world’s largest economy – therefore boosting returns to shareholders. Meanwhile, central banks stored pumping money in to the global economic climate through quantitative easing. These debt buying programmes have caused an autumn in bond yields – the eye rate they pay to investors – that has forced market professionals to search for greater returns from riskier assets, with stocks an investment of preference.
Referred to as Wall Street’s fear gauge, the Chicago Board Options Exchange Volatility Index has fallen to record lows this season – assisting to fuel the rally in shares. The gauge measures investor expectations for cost swings in the stock exchange more than a 30-day period, up or lower. The Vix fell to below 9 points in This summer and it has not gone anywhere close to the 20 mark, which generally signifies that situations are going awry and is a very common feature of falling markets.
In Great Britan, the FTSE 100, full of firms that earn a lot of their profit in foreign currency, has surged because of more powerful global growth and also the weak pound because the Brexit election. Even though it has staged a recovery this season, sterling continues to be almost 10% lower around the dollar, which benefits companies earning money in foreign markets.
An over-all feeling of confidence among investors within the condition from the global economy – and also the condition of geopolitics – continues to be key. However, investors might be ignoring problems laying underneath the top. The fund manager Alberto Gallo at Algebris Investments thinks you will find good reasons to be careful – with risks as a result of geopolitics, central bank policy and greater inflation. Markets barely blinked this season, despite faltering Brexit talks and concerns over North Korea’s nuclear weapons programme. Because of the rising quantity of one-sided bets for that sell to continue rising, the potential risks of a boost in volatility might be growing.
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Cheap, electric bicycles make existence a great deal simpler for brand new You are able to City’s legions of restaurant delivery workers, however the party might be in 2012.
City officials are promising a attack on e-bikes, which can be preferred among environmentalists and also the frequently poor, immigrant workforce that depends on them, but they are loathed by many people motorists and pedestrians who think they’re a menace.
Under city law, the bikes are legal to possess then sell, but riding them in the pub can result in an excellent as high as $500. Democratic Mayor Bill de Blasio announced this fall that beginning in 2018, companies which have employees make use of the bikes will also be susceptible to an excellent of $100 for any first offense and $200 for every subsequent offense.
“Electric bikes are illegal to function on city roads and individuals towards the top of the meals chain have to be attributed,” city spokesman Austin Finan stated. “Instead of just targeting riders, we’re pursuing companies that appear to be another way and then leave their workers to shoulder the fine.”
Bill de Blasio waits to talk in a fundraising event located in De Moines, Iowa Photograph: Charlie Neibergall/AP
That policy will unquestionably prove well-liked by many New Yorkers who’ve complained the bikes, which look and take care of much like regular bicycles but could achieve speeds of 20 miles per hour or even more, and often are operated recklessly.
Many individuals have tales about near misses where they walked out in to the street, simply to nearly get hit with a quick-moving bike they couldn’t hear coming. But it’ll be not so good news for deliverymen like Clemente Martinez, who spends as much as 12 hrs each day within the saddle, frequently in lousy weather.
“It’s not fair because individuals much like me do rely on them,” stated Martinez via a translator. The 44-year-old from Puebla, Mexico, found the U . s . States almost fifteen years ago and has worked like a delivery person just about all that point, buying his electric bicycle almost 3 years ago. “We’re by using this as something which allows us to work and support our families.”
The bikes create a tremendous difference for that delivery workforce, stated Do Lee, a PhD candidate who studied delivery workers for his dissertation and advocates on their behalf. Most of the personnel are middle-aged or perhaps older, employed by hrs and investing in a substantial quantity of miles to satisfy the interest in food along with other products to become delivered rapidly. “They couldn’t do their jobs without electric bikes,” he stated. Advocates for alternate types of transportation repeat the attack also doesn’t seem sensible from your ecological or safety perspective.
Some cycling advocacy groups have challenged the town to create data showing if the e-bikes pose any unusual danger, when compared with other motor vehicles. Federal law enables electric bicycles which go 20mph or fewer to become treated as bicycles for product safety and standards, but New You are able to condition law doesn’t permit them to be registered or licensed as automobiles.
Police enforcement from the bicycles was already around the upswing, with almost 1,000 of these confiscated by police in 2017, a rise of countless hundred from the prior year.
While new electric bikes might opt for several 1000s of dollars, much like some gas-powered scooters like Vespas, kits to transform a typical bike for an electric bike can be purchased for less than $500.
Elizabeth Jordan, a lawyer using the Result in the Road New You are able to advocacy group, stated restaurants have started to expect workers to achieve the bikes and wish these to own and keep them.
“They need to have these bikes to get these jobs,” she stated. “We believe that although the policy has got the aim of pursuing the restaurants, it’ll fall being worn by the employees.Inches
signed a professional order captured to substantially increase apprenticeships within the U . s . States, he became a member of a type of recent presidents who’ve attempted to reimagine job training grownups at work rather of mostly inside a classroom.
Regardless of this focus in the greatest amounts of government, apprenticeships haven’t caught on within the U . s . States compared to a lot of Countries in europe. Today, American apprenticeships remain largely connected using the construction trades and labor unions, where they’d their roots inside a Depression-era labor shortage that brought Congress to pass through formalized standards and empowered the Labor Department to approve training.
This past year, about 500,000 apprentices were listed with 21,000 programs around the Department of Labor’s registry. While that’s up from fewer than 400,000 just 4 years ago, it’s still far lacking demand and pales in comparison to the two million new students who sign up for vocational schools each year.
Apprenticeships are experiencing restored attention partially since the primary path in to the employment market — the school degree — has brought some graduates to struggle to find work and facing considerable amounts of student-loan debt. Some 91 percent of apprentices secure a job after finishing their programs, having a beginning pay of more than $51,000 yearly. In addition to this, many of them leave their programs with no debt, when compared to average college graduate this past year who lent to invest in the amount and left campus $37,000 within the hole.
“What many people don’t seem to comprehend is that apprenticeships are just like college but with no debt,” stated Eleni Papadakis, executive director from the Washington state Workforce Education and training Coordinating Board, in a panel discussion on apprenticeships which i moderated earlier this year in the think tank New America. “In many instances, apprentices still earn college credits and levels, after which finish in good jobs.”
Why less than 2 percent of 18- to 24-year-olds within this country are signed up for apprenticeships are varied and sophisticated, and, regrettably, many can’t easily be fixed with executive orders in the White-colored House.
The greatest concern is cultural: The “college-for-all” movement within the U . s . States over the final 40 years has pressed many youth to campuses even if they weren’t ready or didn’t wish to follow that well-trod path.
Take Michael Shinn, whom I met in New York while reporting my book around the difficult transition today’s youth face within this employment market. Michael had a’s and b’s in senior high school, particularly in math, coupled with completed several AP courses. So his senior high school counselor encouraged him to follow along with the school route, and that he had intends to major in engineering at New York Condition College. Early in the year of his junior year, however, he observed an indication to have an apprenticeship program operated by local manufacturers.
Shinn visited the presentation the next week, although he explained he was frustrated from doing this by his counselor. “He explained I had been college-going material which wasn’t for me personally,” Shinn remembered. What he heard in the presentation surprised him. The businesses were nothing beats nowhere-collar, set up-line jobs his generation associates with factory work. They were advanced operations having a desperate requirement for workers who could really think, and not simply make widgets. The good thing was they’d pay him to operate and visit school, plus they guaranteed employment following the four-year apprenticeship. He registered.
After I swept up with him a couple of years after his apprenticeship ended, he’d already completed an associate’s degree in a nearby college, compensated for by Ameritech Die & Mold, where he began work making custom tools at $35,000 annually. Meanwhile, he explained his wife, who’d lately completed her Master of business administration, was locating the employment market difficult. “Teachers and guidance counselors only discuss college as the best way to a great existence,” he explained. “I wish much more of them often see things i do every single day. I do not possess a mindless manufacturing job.”
Programs such as the one Shinn completed in North Carolina have possibly the very best chance at success simply because they use local employers and also the skills they require inside a region. Indeed, it’s states, and never the us government, which have been the best choice in building apprenticeships recently.
The greatest effort of the kind is within Colorado, where Gov. John Hickenlooper really wants to make apprenticeships as fashionable as attending college. Supported by nearly $ten million from Bloomberg Philanthropies and JPMorgan Chase, Colorado has began offering hands-on training, starting in senior high school, in financial services, it, healthcare and manufacturing. The aim would be to make the program available with a 20,000 students over the following decade.
In the set of apprenticeships earlier this year, New America recommended a number of ways the us government might be supportive of condition efforts, including better connecting the greater education system and apprenticeships, and allowing federal work-study funds to pay for tuition and charges of student apprentices.
It’s unclear whether apprenticeships is ever going to become as ubiquitous as college within the U . s . States or because they are in Europe, where it isn’t unusual to locate top executives of companies who began as apprentices. But there can’t you need to be one path into good-having to pay jobs from senior high school within the U . s . States, because as the recent past shows us, that path is full of students who never develop a degree yet others who graduate with an excessive amount of debt and little prospect for gainful employment.
A media company built on subversion and outlandishness was unable to create “a safe and inclusive workplace” for women, two of its founders acknowledge.
Viceland, a Vice Media television channel, celebrated the start of a show at Comic Con in San Diego in July.CreditJoe Scarnici/Getty Images for VICELAND
One woman said she was riding a Ferris wheel at Coney Island after a company event when a co-worker suddenly took her hand and put it on his crotch. Another said she felt pressured into a sexual relationship with an executive and was fired after she rejected him.
A third said that a co-worker grabbed her face and tried to kiss her, and she used her umbrella to fend him off.
These women did not work among older men at a hidebound company. They worked at Vice, an insurgent force in news and entertainment known for edgy content that aims for millennial audiences on HBO and its own TV network.
But as Vice Media has built itself from a fringe Canadian magazine into a nearly $6 billion global media company, its boundary-pushing culture created a workplace that was degrading and uncomfortable for women, current and former employees say.
An investigation by The New York Times has found four settlements involving allegations of sexual harassment or defamation against Vice employees, including its current president.
The Vice offices in Williamsburg, Brooklyn. Started as a small magazine in Canada, Vice has evolved into a $6 billion global media company.CreditNatalie Keyssar for The New York Times
In addition, more than two dozen other women, most in their 20s and early 30s, said they had experienced or witnessed sexual misconduct at the company — unwanted kisses, groping, lewd remarks and propositions for sex.
The settlements and the many episodes of harassment the women described depict a top-down ethos of male entitlement at Vice, where women said they felt like just another party favor at an organization where partying often was an extension of the job.
What stands out about the women’s accounts — in the wake of a public reckoning over sexual assault and harassment by mostly older men — is that the allegations involve men in their 20s, 30s and 40s who came of age long after workplace harassment was not only taboo but outlawed.
“The misogyny might look different than you would have expected it to in the 1950s, but it was still there, it was still ingrained,” said Kayla Ruble, a journalist who worked at Vice from 2014 to 2016. “This is a wakeup call.”
Vice and its co-founder and chief executive, Shane Smith, have long been open about the company’s provocative atmosphere. But Vice is now struggling to reconcile its past — famous for coverage of streetwear, drugs and sex, as well as its raucous parties — with its emergence as a global media company backed by corporate giants like Disney and Fox.
Shane Smith, a founder of Vice and the company’s chief executive, reporting in Greenland on rising sea levels for the HBO series “Vice.”CreditVice
In a statement provided to The Times, Mr. Smith and another co-founder, Suroosh Alvi, said “from the top down, we have failed as a company to create a safe and inclusive workplace where everyone, especially women, can feel respected and thrive.”
They said that a “boys club” culture at Vice had “fostered inappropriate behavior that permeated throughout the company.” The company distributed a longer version of the statement to its employees on Saturday.
The company said it has been taking steps to transform itself in recent months as the national debate over sexual harassment reshapes workplaces, and as it became aware that The Times and other news outlets were working on articles about the experiences of women at Vice.
Vice has formed a Diversity and Inclusion Advisory Board, which includes the feminist icon Gloria Steinem and is led by the lawyer Roberta Kaplan; hired a new head of human resources; and terminated three employees for what it called behavior inconsistent with its values. It also forbade romantic relationships between supervisors and their employees — which several current and former employees said were not uncommon and led to many problems.
The settlement involving Vice’s president, Andrew Creighton, was struck in 2016, when Mr. Creighton, 45, paid $135,000 to a former employee who claimed that she was fired after she rejected an intimate relationship with him, according to people briefed on the matter and documents viewed by The Times. The woman declined to comment and asked that she not to be identified to protect her privacy.
Earlier this year, the company settled for an unknown amount with Martina Veltroni, a former employee who claimed that her supervisor retaliated against her after they had a sexual relationship, among other allegations, according to people briefed on the agreement and documents viewed by The Times. The supervisor, Jason Mojica, the former head of Vice News, was fired late last month. Ms. Veltroni declined to comment.
And last January, Vice reached a $24,000 settlement with Joanna Fuertes-Knight, a former journalist in its London office, who said she had been the victim of sexual harassment, racial and gender discrimination and bullying, according to documents viewed by The Times. Among Ms. Fuertes-Knight’s claims were that a Vice producer, Rhys James, had made racist and sexist statements to her, including asking about the color of her nipples and whether she slept with black men. Ms. Fuertes-Knight, who is of mixed race, is bound by a confidentiality agreement and declined to comment.
Mr. James was put on leave in late November, according to a Vice spokesman. In the settlement agreement, both Vice and Mr. James denied any liability. Mr. James did not respond to messages sent seeking comment.
A fourth settlement, struck in 2003, involved claims that Vice defamed a female writer by publishing that she had agreed to have sex with a rapper whom she had interviewed, when she had not.
In response to questions about the settlements, a Vice spokesman said that the company had made “few settlements” over its 23-year history and that no Vice employee had been involved in more than one. “In some cases, it’s clear that the company and our managers made mistakes,” the company said. “In others, we disagree with the way in which the underlying facts have been characterized.”
Details about the settlements and the culture of the company are based on interviews with more than 100 current and former Vice employees. As word spread within the media industry that The Times was reporting on Vice, more than a dozen women and men contacted The Times with accounts that they said were humiliating and emotionally traumatic. Several broke confidentiality agreements to speak on the record, but many spoke on the condition of anonymity, citing those agreements and fear of reprisal.
The Times also examined more than 100 pages of legal documents, emails, text messages and other filings related to Vice’s operations, the settlements and allegations of harassment.
In their statement, Mr. Smith and Mr. Alvi said the problems “happened on our watch and ultimately we let far too many people down. We are truly sorry for this.” They also expressed “extreme regret for our role in perpetuating sexism in the media industry and society in general.”
The Early Years: A Cowboy Culture
A brash maverick and consummate salesman, Mr. Smith, 48, transformed Vice from a free magazine in Montreal into a global company with roughly 3,000 employees, a television network, a digital footprint, a film-production company as well as a daily news show and documentary program on HBO.
A video Vice produced on cannabis culture.CreditVideo by VICE
Along the way Mr. Smith regularly mocked traditional media companies as stodgy and uncreative. But in recent years he set about courting conglomerates like the Walt Disney Company and 21st Century Fox, which were eager to profit on Vice’s cachet with millennial audiences. The latest round of investment gave the company a valuation of more than $5.7 billion.
Behind that ascent, however, is a more disturbing aspect of Vice’s operations. People involved with Vice during its early days described a punk-rock, male-dominated atmosphere in which attempts to shock sometimes crossed a line.
In a 2012 interview with the Financial Times, Mr. Smith recalled his earlier days with Vice. “I would be at the party and would just want to get wasted, take coke and have sex with girls in the bathroom,” he said.
In 2003 Vice reached a $25,000 settlement with the freelance writer Jessica Hopper. The deal involved defamation claims tied to an interview she did with the rapper Murs that was published in the February 2003 issue of the magazine, according to a copy of the agreement viewed by The Times. During the interview, Murs asked Ms. Hopper if he could have sex with her. She said no and included that answer in her article.
Jessica Hopper, a freelance writer who reached a settlement with Vice in 2003 over defamation claims related to an article she wrote for the company’s magazine.CreditNatalie Keyssar for The New York Times
But before the article was published, the magazine changed her response to yes and printed it under the headline, “I Got Laid But Murs Didn’t.”
Mortified, Ms. Hopper hired lawyers. The two sides struck a settlement that, in addition to a payout, required Vice to print a retraction and a formal apology.
“People marveled at their ability to make their own rules and blindly disregard everyone else’s,” Ms. Hopper said in an interview. She declined to comment on the existence of a settlement.
“The editor of the piece at that time has not been with the company in a decade,” Vice said in a statement. “Ms. Hopper was right to call us on our conduct at the time, and we are still ashamed of it.’’
Mr. Smith, who had long celebrated a life of hard-partying excess, married a woman in 2009 who had worked at Vice and started wearing suits to the office, current and former employees said. But they also suggested that he oversaw a company where issues of sexual misconduct and harassment festered.
In their statement, Mr. Smith and Mr. Alvi admitted that dysfunction and mismanagement from the company’s early days “were allowed to flourish unchecked.”
Women said that they felt that rejecting sexual advances from bosses could result in reassignment or lost work, and that when they reported problems, executives downplayed the allegations. Some said that while they considered taking legal action, they thought they lacked the financial resources to sue and feared that Vice would retaliate.
“There is a toxic environment where men can say the most disgusting things, joke about sex openly, and overall a toxic environment where women are treated far inferior than men,” said Sandra Miller, who worked as head of branded production at Vice from 2014 to 2016.
Sandra Miller, who led Vice’s branded production efforts from 2014 to 2016, said she never experienced harassment there, but said it was “overall a toxic environment where women are treated far inferior than men.”CreditNatalie Keyssar for The New York Times
She said that as a 50-year-old woman she did not face harassment but witnessed “the complicity of accepting that behavior, covering up for it, and having even the most progressive people look the other way.”
The workplace problems were particularly disappointing, many women said, because they had viewed Vice as their dream opportunity. The company didn’t pay well, some said, but it was the definition of cool for those who wanted to create entertainment and journalism on the cutting edge. The company bestowed select staff members rings that spell V-I-C-E — considered the ultimate prize.
People worked long hours and partied together afterward. And that’s where the lines often blurred. Multiple women said that after a night of drinking, they wound up fending off touching, kissing and other advances from their superiors.
An issue of Vice magazine.
Two women told The Times about episodes involving Mike Germano, Vice’s chief digital officer who founded Carrot Creative, the digital ad agency that Vice acquired in 2013. Amanda Rue, a former strategist, said that at Carrot’s holiday party in 2012 Mr. Germano told her that he hadn’t wanted to hire her because he wanted to have sex with her.
Gabrielle Schaefer, who worked closely with Mr. Germano as director of communications at Carrot, said he made her feel uncomfortable during a work event at a bar one night in 2014 when he pulled her onto his lap. After Ms. Schaefer reported the incident to human resources, she said, she felt that she fell out of favor at the company and eventually left.
“Carrot has been repeatedly recognized as one of the industry’s best places to work, and I do not believe that these allegations reflect the company’s culture — or the way we treat each other,” Mr. Germano said in a statement. “With regards to the incident with Ms. Schaefer, I agreed at that time it was inappropriate, I apologized, and it was resolved with the help of HR.” He said that days later Ms. Schaefer joined his family for dinner and that they “continued to work together amicably.”
Andrew Creighton, left, president of Vice Media, with Mr. Smith at a company party in 2011.CreditAstrid Stawiarz/Getty Images
In the settlement involving Mr. Creighton, the woman claimed she felt pressured to submit to advances he made during a series of work meetings from 2013 to 2015, according to people familiar with the matter and letters sent between lawyers for the woman and Vice.
In a letter to the woman’s lawyer, Vice denied the allegations and said the woman had initiated and pursued a sexual relationship with Mr. Creighton. The company said in the letter that her termination was based on poor performance.
The dispute was settled in December 2016 after the woman filed a complaint with the United States Equal Opportunity Commission. (She withdrew her complaint as a condition of the agreement.)
In a statement, Mr. Creighton said that he and the woman were “close friends for several years before she joined Vice,” and that they were “occasionally intimate” once she began working there. He said he was not involved in the decision to let her go.
“I apologize for the situation, and it has caused much thought in my responsibilities of care for my colleagues, and I will hold myself and others accountable in constructing a respectful workplace environment.”
Agreements Encourage Silence
Executives erected a wall of silence around the company. Employees were required to sign a confidentiality agreement when they joined Vice, stating that during and after their employment they would not publicly disparage the company, according to a copy viewed by The Times.
Until recently, Vice also required employees to sign a nontraditional workplace agreement acknowledging that they would be exposed to explicit, potentially disturbing material but that they did not find such content or “the workplace environment” to be offensive or disturbing.
Some employees said that they took the agreement to mean that they could not complain about issues of harassment.
Vice said the agreement “was always meant to address content — it had nothing to do with conduct,” and that when it learned the language was causing confusion, it eliminated the agreement.
In the months before the Columbia Journalism Review published an article in 2015 about the culture at Vice, and was looking into the treatment of women at the company, lawyers for Vice warned at least one former employee, Murray Waas, who had worked as an investigations editor, about “his strict confidentiality obligations’’ and of the financial penalties he could face for talking to another media outlet.
“I am sure he knows Vice will pursue all of its remedies aggressively,” Michael Delikat, a partner at the law firm Orrick, Herrington & Sutcliffe, said in an email sent to Mr. Waas’s lawyer, a copy of which was viewed by The Times.
In a statement, Vice said, “NDA’s have been a standard part of settlements in all cases in all industries for years and years,’’ adding, “This is not a letter we would send today.”
Asked whether the company would release current and former employees who had experienced or witnessed sexual harassment from their confidentiality agreements, the company said: “Like many other companies and policymakers, we are watching developments and considering the issue.”
When the Columbia Journalism Review published its article, it included a quote from Nancy Ashbrooke, the former human resources director at Vice, stating that since she joined the company in 2014 sexual harassment had “not been an issue.” (Ms. Ashbrooke worked as vice president of human resources at Harvey Weinstein’s Miramax Films from 1991 to 2000.)
Current and former employees disputed Ms. Ashbrooke’s statement.
Kate Goss, a former project manager at Vice, said that in the summer of 2015 she reported an incident that occurred after a work event to her bosses and human resources. She said that on the Ferris wheel at Coney Island a creative director put her hand in his crotch without her consent. Ms. Goss said Ms. Ashbrooke told her there needed to be multiple incidents in order for her to take action against the other employee.
Ms. Goss discussed the incident with a co-worker at the time, which The Times confirmed.
Jason Mojica, who led Vice’s documentary films unit, was involved in a settlement with a former female employee. He was fired in November.CreditJemal Countess/Getty Images
Abby Ellis, a former Vice journalist, said that in 2013 Mr. Mojica, the former head of Vice News, tried to kiss her against her will. She said that she yelled at him and hit him with an umbrella multiple times. She said that she faced other unwanted advances from Mr. Mojica after the incident.
Ms. Ellis said that after the episode she felt that their relationship soured and that she was missing out on newsroom opportunities, so she reported it to Ms. Ashbrooke. Ms. Ashbrooke responded by telling Ms. Ellis that because she was an attractive woman she would face similar behavior throughout her career. Ms. Ellis discussed the episode with several co-workers at the time, which The Times confirmed.
“As women, we get harassed everywhere and we don’t feel compelled to report it because it’s not considered a reportable offense,” Ms. Ellis said. “We’re expected to put up with it; it’s the cost of doing business.”
Mr. Mojica said that he remembered “misreading a moment and foolishly trying to kiss Abby” but that the episode had a “very different tone.” He added, “I was quickly rebuffed, and I immediately apologized.” He said he thought the incident had “no impact” on their professional relationship.
Two years later, Helen Donahue, a former employee, reported to Ms. Ashbrooke that Mr. Mojica had grabbed her breasts and buttocks at a company holiday party. Ms. Donahue said that Ms. Ashbrooke told her that the incident was not sexual harassment but rather someone making a move on her.
“She said I should just forget about it and laugh it off,” Ms. Donahue said.
Helen Donahue, a former Vice employee, said she had been groped at a company party. She said that the head of human resources told her to “laugh it off.”CreditKendrick Brinson for The New York Times
Mr. Mojica said that while he recalled talking to Ms. Donahue at the party, he did not “remember doing anything of the sort.”
Ms. Ashbrooke, who left the company in recent months, said in a statement: “As a woman and HR professional, I support anyone who believes they have been mistreated and throughout my career, I have worked to help companies build respectful workplaces with no tolerance for inappropriate behavior.”
The settlement involving Mr. Mojica came after lawyers for Martina Veltroni sent a letter to Vice outlining her claims that her relationship with Mr. Mojica derailed her career at Vice, according to letters sent between lawyers for the woman and Vice.
In a letter to Ms. Veltroni’s lawyers, Vice denied the allegations against Mr. Mojica and said that Ms. Veltroni was trying to “recast her consensual and desired sexual relationship with her former supervisor” into a claim of harassment.
Mr. Mojica said that he had “never retaliated against” Ms. Veltroni and that he was not involved in the discussions with Ms. Veltroni’s lawyer or the resulting agreement.
Mr. Smith and another Vice founder, Suroosh Alvi, said in a statement: “From the top down, we have failed as a company to create a safe and inclusive workplace where everyone, especially women, can feel respected and thrive.“CreditJesse Dittmar for The New York Times
On Nov. 30, after a report appeared in The Daily Beast on Vice’s culture, and aware that The Times was investigating its workplace, Vice announced that it had terminated three employees, including Mr. Mojica, for “behavior that is inconsistent with our policies, our values, and the way in which we believe colleagues should work together.”
Mr. Mojica said he was not given a reason for his termination.
Efforts at Reform
Vice said that it has updated its sexual harassment policies, clarified sexual harassment reporting procedures and created an employee hotline. The company also said that it has made a commitment to reaching gender pay parity by the end of 2018, expanded maternity and paternity benefits, and introduced mandatory respect and sensitivity training for all employees.
The company’s new human resources director, Susan Tohyama, has retained an outside investigator “to conduct investigations into current or historical workplace issues that are brought to our attention.”
Vice’s recent efforts at reform have had some stumbles, though. In mid-November top managers conducted a “state of the union” session with employees that did not include any mention of sexual harassment, an issue that was roiling workplaces around the country.
Many employees said they found the session tone deaf, prompting Mr. Smith to send a note to the staff that night saying that “we missed the mark, especially when it came to clearly addressing issues around sexual harassment at Vice.”
“Yes, we can change the world,” he wrote, “but first we have to start at home.”
Doris Burke and Kitty Bennett contributed research
This article was written through collaboration between The New York Times and ProPublica, the independent, nonprofit investigative journalism organization.
A few weeks ago, Verizon placed an ad on Facebook to recruit applicants for a unit focused on financial planning and analysis. The ad showed a smiling, millennial-aged woman seated at a computer and promised that new hires could look forward to a rewarding career in which they would be “more than just a number.”
Some relevant numbers were not immediately evident. The promotion was set to run on the Facebook feeds of users 25 to 36 years old who lived in the nation’s capital, or had recently visited there, and had demonstrated an interest in finance. For a vast majority of the hundreds of millions of people who check Facebook every day, the ad did not exist.
Verizon is among dozens of the nation’s leading employers — including Amazon, Goldman Sachs, Target and Facebook itself — that placed recruitment ads limited to particular age groups, an investigation by ProPublica and The New York Times has found.
The ability of advertisers to deliver their message to the precise audience most likely to respond is the cornerstone of Facebook’s business model. But using the system to expose job opportunities only to certain age groups has raised concerns about fairness to older workers.
Several experts questioned whether the practice is in keeping with the federal Age Discrimination in Employment Act of 1967, which prohibits bias against people 40 or older in hiring or employment. Many jurisdictions make it unlawful to “aid” or “abet” age discrimination, a provision that could apply to companies like Facebook that distribute job ads.
“It’s blatantly unlawful,” said Debra Katz, a Washington employment lawyer who represents victims of discrimination.
Facebook defended the practice. “Used responsibly, age-based targeting for employment purposes is an accepted industry practice and for good reason: it helps employers recruit and people of all ages find work,” said Rob Goldman, a Facebook vice president.
The revelations come at a time when the unregulated power of the tech companies is under increased scrutiny, and Congress is weighing whether to limit the immunity that it granted to tech companies in 1996 for third-party content on their platforms.
Facebook has argued in court filings that the law, the Communications Decency Act, makes it immune from liability for discriminatory ads.
Although Facebook is a relatively new entrant into the recruiting arena, it is rapidly gaining popularity with employers. Earlier this year, the social network launched a section of its site devoted to job ads. Facebook allows advertisers to select their audience, and then Facebook finds the chosen users with the extensive data it collects about its members.
The use of age targets emerged in a review of data originally compiled by ProPublica readers for a project about political ad placement on Facebook. Many of the ads include a disclosure by Facebook about why the user is seeing the ad, which can be anything from their age to their affinity for folk music.
The precision of Facebook’s ad delivery has helped it dominate an industry once in the hands of print and broadcast outlets. The system, called microtargeting, allows advertisers to reach essentially whomever they prefer, including the people their analysis suggests are the most plausible hires or consumers, lowering the costs and vastly increasing efficiency.
Targeted Facebook ads were an important tool in Russia’s efforts to influence the 2016 election. The social media giant has acknowledged that 126 million people saw Russia-linked content, some of which was aimed at particular demographic groups and regions. Facebook has also come under criticism for the disclosure that it accepted ads aimed at “Jew-haters” as well as housing ads that discriminated by race, gender, disability and other factors.
Other tech companies also offer employers opportunities to discriminate by age. ProPublica bought job ads on Google and LinkedIn that excluded audiences older than 40 — and the ads were instantly approved. Google said it does not prevent advertisers from displaying ads based on the user’s age. After being contacted by ProPublica, LinkedIn changed its system to prevent such targeting in employment ads.
The practice has begun to attract legal challenges. On Wednesday, a class-action complaint alleging age discrimination was filed in federal court in San Francisco on behalf of the Communications Workers of America and its members — as well as all Facebook users 40 or older who may have been denied the chance to learn about job openings. The plaintiffs’ lawyers said the complaint was based on ads for dozens of companies that they had discovered on Facebook.
The database of Facebook ads collected by ProPublica shows how often and precisely employers recruit by age. In a search for “part-time package handlers,” United Parcel Service ran an ad aimed at people 18 to 24. State Farm pitched its hiring promotion to those 19 to 35.
Some companies, including Target, State Farm and UPS, defended their targeting as a part of a broader recruitment strategy that reached candidates of all ages. The group of companies making this case included Facebook itself, which ran career ads on its own platform, many aimed at people 25 to 60. “We completely reject the allegation that these advertisements are discriminatory,” said Mr. Goldman of Facebook.
After being contacted by ProPublica and The Times, other employers, including Amazon, Northwestern Mutual and the New York City Department of Education, said they had changed or were changing their recruiting strategies.
“We recently audited our recruiting ads on Facebook and discovered some had targeting that was inconsistent with our approach of searching for any candidate over the age of 18,” said Nina Lindsey, a spokeswoman for Amazon, which targeted some ads for workers at its distribution centers between the ages of 18 and 50. “We have corrected those ads.”
Verizon did not respond to requests for comment.
Several companies argued that targeted recruiting on Facebook was comparable to advertising opportunities in publications like the AARP magazine or Teen Vogue, which are aimed at particular age groups. But this obscures an important distinction. Anyone can buy Teen Vogue and see an ad. Online, however, people outside the targeted age groups can be excluded in ways they will never learn about.
“What happens with Facebook is you don’t know what you don’t know,” said David Lopez, a former general counsel for the Equal Employment Opportunity Commission who is one of the lawyers at the firm Outten & Golden bringing the age-discrimination case on behalf of the communication workers union.
‘They Know I’m Dead’
Age discrimination on digital platforms is something that many workers suspect is happening to them, but that is often difficult to prove.
Mark Edelstein, a fitfully employed social-media marketing strategist who is 58 and legally blind, doesn’t pretend to know what he doesn’t know, but he has his suspicions.
Mr. Edelstein, who lives in St. Louis, says he never had serious trouble finding a job until he turned 50. “Once you reach your 50s, you may as well be dead,” he said. “I’ve gone into interviews, with my head of gray hair and my receding hairline, and they know I’m dead.”
Mr. Edelstein spends most of his days scouring sites like LinkedIn and Indeed and pitching hiring managers with personalized appeals. When he scrolled through his Facebook ads on a Wednesday in December, he saw a variety of ads reflecting his interest in social media marketing: ads for the marketing software HubSpot (“15 free infographic templates!”) and TripIt, which he used to book a trip to visit his mother in Florida.
What he didn’t see was a single ad for a job in his profession, including one identified by ProPublica that was being shown to younger users: a posting for a social media director job at HubSpot. The company asked that the ad be shown to people aged 27 to 40 who live or were recently living in the United States.
“Hypothetically, had I seen a job for a social media director at HubSpot, even if it involved relocation, I ABSOLUTELY would have applied for it,” Mr. Edelstein said by email when told about the ad.
A HubSpot spokeswoman, Ellie Botelho, said that the job was posted on many sites, including LinkedIn, The Ladders and Built in Boston, and was open to anyone meeting the qualifications regardless of age or any other demographic characteristic.
She added that “the use of the targeted age-range selection on the Facebook ad was frankly a mistake on our part given our lack of experience using that platform for job postings and not a feature we will use again.”
For his part, Mr. Edelstein says he understands why marketers wouldn’t want to target ads at him: “It doesn’t surprise me a bit. Why would they want a 58-year-old white guy who’s disabled?”
Looking for ‘Younger Blood’
Although LinkedIn is the leading online recruitment platform, according to an annual survey by SourceCon, an industry website, Facebook is rapidly increasing in popularity for employers.
One reason is that Facebook’s sheer size — two billion monthly active users, versus LinkedIn’s 530 million total members — gives recruiters access to types of workers they can’t find elsewhere.
Consider nurses, whom hospitals are desperate to hire. “They’re less likely to use LinkedIn,” said Josh Rock, a recruiter at a large hospital system in Minnesota who has expertise in digital media. “Nurses are predominantly female, there’s a larger volume of Facebook users. That’s what they use.”
There are also millions of hourly workers who have never visited LinkedIn, and may not even have a résumé, but who check Facebook obsessively.
Deb Andrychuk, chief executive of the Arland Group, which helps employers place recruitment ads, said clients sometimes asked her firm to target ads by age, saying they needed “to start bringing younger blood” into their organizations. “It’s not necessarily that we wouldn’t take someone older,” these clients say, according to Ms. Andrychuk, “but if you could bring in a younger set of applicants, it would definitely work out better.”
Ms. Andrychuk said that “we coach clients to be open and not discriminate” and that after being contacted by The Times, her team updated all their ads to ensure they didn’t exclude any age groups.
Employment ads and notifications that Mark Edelstein was shown when he browsed Facebook.
But some companies contend that there are permissible reasons to filter audiences by age, as with an ad for entry-level analyst positions at Goldman Sachs that was distributed to people 18 to 64. A Goldman Sachs spokesman, Andrew Williams, said showing it to people above that age range would have wasted money: roughly 25 percent of those who typically click on the firm’s untargeted ads are 65 or older, but people that age almost never apply for the analyst job.
“We welcome and actively recruit applicants of all ages,” Mr. Williams said. “For some of our social-media ads, we look to get the content to the people most likely to be interested, but do not exclude anyone from our recruiting activity.”
Pauline Kim, a professor of employment law at Washington University in St. Louis, said the Age Discrimination in Employment Act, unlike the federal anti-discrimination statute that covers race and gender, allows an employer to take into account “reasonable factors” that may be highly correlated with the protected characteristic, such as cost, as long as they don’t rely on the characteristic explicitly.
The Question of Liability
In various ways, Facebook and LinkedIn have acknowledged at least a modest obligation to police their ad platforms against abuse.
Earlier this year, Facebook said it would require advertisers to “self-certify” that their housing, employment and credit ads were compliant with anti-discrimination laws, but that it would not block marketers from purchasing age-restricted ads.
Still, Facebook didn’t promise to monitor those certifications for accuracy. And Facebook said the self-certification system, announced in February, was still being rolled out to all advertisers.
LinkedIn, in response to inquiries by ProPublica, added a self-certification step that prevents employers from using age ranges once they confirm that they are placing an employment ad.
With these efforts evolving, legal experts say it is unclear how much liability the tech platforms could have. Some civil rights laws, like the Fair Housing Act, explicitly require publishers to assume liability for discriminatory ads.
But the Age Discrimination in Employment Act assigns liability only to employers or employment agencies, like recruiters and advertising firms.
The lawsuit filed against Facebook on behalf of the communications workers argues that the company essentially plays the role of an employment agency — collecting and providing data that helps employers locate candidates, effectively coordinating with the employer to develop the advertising strategies, informing employers about the performance of the ads, and so forth.
Regardless of whether courts accept that argument, the tech companies could also face liability under certain state or local anti-discrimination statutes. For example, California’s Fair Employment and Housing Act makes it unlawful to “aid, abet, incite, compel or coerce the doing” of discriminatory acts proscribed by the statute.
“They may have an obligation there not to aid and abet an ad that enables discrimination,” said Cliff Palefsky, an employment lawyer based in San Francisco.
The question may hinge on Section 230 of the federal Communications Decency Act, which protects internet companies from liability for third-party content.
Tech companies have successfully invoked this law to avoid liability for offensive or criminal content — including sex trafficking, revenge porn and calls for violence against Jews. Facebook is currently arguing in federal court that Section 230 immunizes it against liability for ad placement that blocks members of certain racial and ethnic groups from seeing the ads.
“Advertisers, not Facebook, are responsible for both the content of their ads and what targeting criteria to use, if any,” Facebook argued in its motion to dismiss allegations that its ads violated a host of civil rights laws. The case does not allege age discrimination.
Eric Goldman, professor and co-director of the High Tech Law Institute at the Santa Clara University School of Law, who has written extensively about Section 230, says it is hard to predict how courts would treat Facebook’s age-targeting of employment ads.
Mr. Goldman said the law covered the content of ads, and that courts have made clear that Facebook would not be liable for an advertisement in which an employer wrote, say, “no one over 55 need apply.” But it is not clear how the courts would treat Facebook’s offering of age-targeted customization.
According to a federal appellate court decision in a fair-housing case, a platform can be considered to have helped “develop unlawful content” that users play a role in generating, which would negate the immunity.
“Depending on how the targeting is happening, you can make potentially different sorts of arguments about whether or not Google or Facebook or LinkedIn is contributing to the development” of the ad, said Deirdre K. Mulligan, a faculty director of the Berkeley Center for Law and Technology.
Julia Angwin and Ariana Tobin are reporters at ProPublica. Jeff Larson and Madeleine Varner of ProPublica contributed research.
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