The daily business briefing: August 11, 2020
McDonald's sues ousted CEO after new allegations, a California judge orders Uber and Lyft to treat drivers as employees, and more
McDonald's sues former CEO after new allegations surface
McDonald's filed a lawsuit Monday accusing former CEO Steve Easterbrook of lying, concealing evidence, and fraud linked to a sexual relationship with a subordinate while he was running the company. McDonald's is trying to take back stock options and other compensation reportedly worth more than $40 million that Easterbrook was allowed to keep last fall when he was fired for sexting with a subordinate. In the lawsuit, the fast-food giant claims that Easterbrook actually had relations with three subordinates in the year before he was fired, and awarded one of them a lucrative batch of shares. Numerous corporate leaders have been forced out over sexual misconduct in recent years, but few companies have engaged in such a public battle airing intimate details.
California judge orders Uber and Lyft to treat drivers as employees
A California judge on Monday ordered ride-hailing companies Uber and Lyft to classify their drivers in the state as employees eligible for benefits, rather than independent contractors. On Jan. 1, a new California labor law, AB5, went into effect, which makes it harder for companies to misclassify workers who should be considered employees, and thus eligible for minimum wage and overtime. Judge Ethan Schulman said Uber and Lyft have refused to comply with the law because they classify tech workers as employees but not drivers. Schulman said such "circular reasoning" would let tech-reliant companies "with impunity deprive legions of workers of the basic protections" provided under law. He delayed the order by 10 days so Uber and Lyft can have the opportunity to appeal.
EPA expected to announce rollback on methane regulations
The Trump administration plans to lift Obama-era controls on methane, a greenhouse gas that contributes to global warming, The New York Times reported Monday. The Environmental Protection Agency is expected to issue a new rule by Friday that will no longer require oil and gas companies to install systems that can find and fix methane leaks from wells, pipelines, and storage facilities, the Times reported, citing a person familiar with the matter. The EPA says the change, which has been in development for more than a year, will fix a crippling regulation that hurts the oil and gas industries. Methane makes up almost 10 percent of greenhouse gas emissions in the U.S., and during its first 20 years in the atmosphere it has 80 times the heat-trapping power of carbon dioxide, the most harmful greenhouse gas, according to the Times.
Putin says Russia has registered world's 1st coronavirus vaccine
Russian President Vladimir Putin said Tuesday that Russia has developed the first approved vaccine against COVID-19, according to reports by local news agencies. Putin said his daughter was among the people who had been vaccinated with it. "As far as I know, a vaccine against a new coronavirus infection has been registered this morning, for the first time in the world," Putin said at a government meeting, RIA Novosti reported. Medical experts expressed concerns that the Kremlin aggressively and dangerously rushed the vaccine approval process, putting global prestige over public health. The World Health Organization reported in July that there were 26 vaccine candidates undergoing clinical evaluation, including one in Russia being developed by the Gamaleya Scientific Research Institute of Epidemiology and Microbiology.
Stock futures rise after Russia claims to have coronavirus vaccine
U.S. stock index futures rose early Tuesday after three days of gains lifted the S&P 500, giving it a shot at a record high as Russia claimed to have the world's first approved coronavirus vaccine. Futures for the S&P 500 were up by 0.7 percent several hours before the opening bell. Futures for the Dow Jones Industrial Average gained 1 percent, while those of the Nasdaq rose by 0.6 percent. On Monday, the S&P gained 0.3 percent and the Dow rose by 1.3 percent. The Nasdaq dropped by 0.4 percent. "Markets are looking forward to better days ahead," Jeff Buchbinder, equity strategist at LPL Financial, said in a note. "Although the timing is uncertain, the stock market is expressing confidence that the pandemic will end eventually with a vaccine — or multiple vaccines — and with help from better treatments in the interim."