A federal appeals court on Friday largely rejected Starbucks' (SBUX.O)
appeal of a National Labor Relations Board finding the coffee chain illegally fired two Philadelphia baristas because they wanted to organize a union.
The 3rd U.S. Circuit Court of Appeals said Starbucks lacked standing to challenge the constitutionality of NLRB administrative law judges, in a possible setback for companies such as Amazon.com (AMZN.O), Trader Joe's and Elon Musk's SpaceX that have sought to limit the agency's enforcement powers.
Circuit Judge Thomas Ambro wrote for a three-judge panel that substantial evidence supported the NLRB's conclusion that Starbucks engaged in unfair labor practices by firing Echo Nowakowska and Tristan Bussiere from their South Philadelphia store, and reducing Nowakowska's hours.
The court also found substantial evidence that Starbucks knew before the firings that the baristas had recorded meetings with supervisors without their consent, and rejected Starbucks' claim it need not rehire the baristas with back pay because it discovered the improper recordings only later.
But the Philadelphia-based court said the NLRB exceeded its authority by ordering Starbucks to pay the baristas' foreseeable expenses stemming from their firings. These might have included costs of finding new jobs and out-of-pocket medical expenses.
Starbucks said it fired Nowakowska in January 2020 because she performed poorly and mistreated customers and fired Bussiere the next month because he spread a false rumor that another barista would be fired.
Neither Starbucks nor its lawyers immediately responded to requests for comment. An NLRB spokesperson declined to comment.
Many Starbucks workers have accused the Seattle-based company of unfair labor practices, which it has denied, amid a campaign by workers to unionize stores nationwide.
That campaign included strikes this month at more than 300 stores, according to Starbucks Workers United.
The case was the first time a federal appeals court considered broader challenges to NLRB enforcement powers, including whether its administrative law judges were unconstitutionally shielded from presidential removal.
Ambro said Starbucks lacked standing to challenge the removal protections because it could not demonstrate harm.
The cases are NLRB v Starbucks Corp, 3rd U.S. Circuit Court of Appeals, No. 23-1953; and Starbucks Corp v NLRB in the same court, No. 23-2241.
US homelessness rose by record 18% in latest annual data
There was a record 18% rise in homelessness in the U.S. in the last year, driven by factors like unaffordable housing, high inflation, systemic racism, natural disasters and rising immigration, the U.S. Department of Housing and Urban Development said on Friday.
WHY IT'S IMPORTANT
The problem of homelessness has been getting worse in the U.S., with commonplace sightings in many cities of destitute people living in the open, with tents pitched on city sidewalks. The federal and state governments have pushed with divergent strategies to deal with the crisis.
BY THE NUMBERS
A total of 771,480 people - or about 23 of every 10,000 people in the U.S. - experienced homelessness in an emergency shelter, safe haven, transitional housing program, or in unsheltered locations, according to data released on Friday.
Overall, the number of people experiencing homelessness increased by 18% between 2023 and 2024, the data showed. The previous such annual data released last year had shown a 12% rise in homelessness.
Between 2023 and 2024, children under the age of 18 were the age group that experienced the largest increase in homelessness, marking a 33% rise with 150,000 children experiencing the crisis, according to the data.
Black people, who made up 12% of the total U.S. population and 21% of the U.S. population living in poverty, represented 32% of all people experiencing homelessness, the data showed.
KEY QUOTES
"Our worsening national affordable housing crisis, rising inflation, stagnating wages among middle- and lower-income households, and the persisting effects of systemic racism have stretched homelessness services systems to their limits," the Department of Housing and Urban Development said.
It also noted "additional public health crises, natural disasters that displaced people from their homes, rising numbers of people immigrating to the U.S., and the end to homelessness prevention programs put in place during the COVID-19 pandemic."
U.S. tech investor Cathie Wood is calling on Donald Trump's incoming administration to boost economic growth and policy certainty by backdating promised corporate and personal tax cuts to Jan. 1, 2025, she told Reuters.
A laggard in recent years, Wood's flagship ARK Innovation exchange-traded fund (ARKK.P) has surged 17% since Trump's victory, which is expected to bring policy changes that will benefit the fund's holdings.
Two of its stocks, electric carmaker Tesla (TSLA.O) and crypto exchange Coinbase (COIN.O), are already up 54% and 7% respectively since Nov. 6, while the S&P500 has risen about 1.7% in that time.
ARKK's other top holdings include Robinhood (HOOD.O) and Block (SQ.N), both of which could also benefit from friendlier crypto and AI policies.
Wood has publicly backed Trump's economic platform, arguing that his plan to unleash deals, promote innovation in crypto and artificial intelligence, and cut red tape and government costs will make life easier for corporate America.
Tax policy was also central to the election race, with Trump pledging to cut the rate paid by companies that make goods in the United States and to extend individual tax cuts Congress passed in 2017 that are set to expire next year.
That's a key area where Wood said she's pushing for more clarity.
"I see them saying, okay, we're going to cut taxes but we will make them retroactive to Jan. 1, 2025. That would be very helpful, I think, in terms of providing certainty for the markets," Wood said in an interview.
"If they don't, you're going to get companies and individuals perhaps holding back. ... I'm trying to communicate that pretty regularly to anyone who will listen."
While Wood said she does not generally support tariffs, which act as a tax increase on goods, Trump's threat to hike them on major trading partners appears to be a negotiating strategy.
TAX REFORM
Analysts expect the new Republican-controlled Congress to pursue tax reform next year, but Trump will kick start other key policies with executive orders upon his Jan. 20 inauguration. He has also announced new regulators who can start to implement his pro-innovation agenda.
Campaign finance records indicate that Wood did not financially back Trump in the 2024 election cycle.
She told Reuters that she has only met Trump once, earlier this year at his Florida home, but is in contact with Tesla boss and billionaire Trump backer Elon Musk and crypto enthusiast Wyoming Republican Senator Cynthia Lummis, both of whom are helping to shape Trump's policies.
Wood has been one of Musk's top cheerleaders, investing 16% of ARKK's $6.4 billion in assets in Tesla. That oversized bet reflects her confidence in Musk and her conviction that AI, including autonomous vehicles, will be a major driver of investment returns going forward, she said.
"He understands that technologies are converging, that artificial intelligence is the biggest catalyst," said Wood.
However, she is selling some Tesla shares to reinvest in other companies likely to benefit from the same trend, like Archer Aviation (ACHR.N), a developer of autonomous aircraft.
Florida-based ARK has also been a leading proponent of crypto, launching a spot bitcoin ETF in January. Wood said a crypto crackdown under President Joe Biden put the United States in a vulnerable position, but the new administration "will not want to lose innovation to the rest of the world."
Lummis said in a statement that engaging with stakeholders was a priority and that "Wood is a leader in digital assets and someone who has shared feedback with me on a number of issues related to innovation."
Although some of the market exuberance over Trump's victory has fizzled, Wood said she believes the Trump bump, which has benefited crypto, small-cap and financial stocks, will eventually spill over into more of the market.
"I do think ... that the market is going to continue broadening out. It'll definitely favor innovation and anything that has been held back by policies in the last several years,” she said.
Neither Musk nor Trump's transition team responded to requests for comment.
'CONTRARIAN PATTERN'
Wood's outsize bets on stocks like Zoom (ZM.O) generated a 152% return at the height of the pandemic and won her a huge retail investor following but she has struggled to sustain that outperformance.
Investors have pulled roughly $3.5 billion from ARKK over the past two years, with $300 million flowing out in the past month, according to data from Morningstar and VettaFi.
"That's an atypical pattern for most ETFs and mutual funds, but typical of the contrarian pattern we've seen for Cathie Wood's funds," said Robby Greengold, a Morningstar analyst.
Wood said that even the most favorable new policies won't end that volatility.
"We're telling people that, hey, we offer a highly differentiated exposure to innovation." As a result, she added: "yes, we're going to be volatile."