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To tell, or not to tell
As workers return to offices in greater numbers, managers face this inevitable situation: An employee tests positive for Covid-19, possibly exposing others at the workplace. Who should be told about it?
Traders at JPMorgan Chase in Manhattan recently complained when they found out about a coronavirus case in their building via news reports. The bank only informs people on the same floor, or who have otherwise had potential contact with the infected person. That’s one way to do it, and there are others. DealBook asked experts to debate the pros and cons of four major approaches.
“As an employer, I owe a duty of care to all my employees. They have a right to know,” said Anthony Gentile, a partner at the law firm Godosky & Gentile. This isn’t a hypothetical question for the litigator. When employees at the 20-person New York firm tested positive early in the pandemic, everyone was alerted and the office was closed.
“Do not tell nobody!” the Cornell employment law professor Stewart Schwab warned, gasping at the notion.
Tell only those in possible contact
This is the JPMorgan approach, shared by many other companies. The risk of telling a narrower group of people, lawyers warn, is that it may reveal, explicitly or otherwise, who tested positive — and it’s important to protect an employee’s confidentiality. More-limited disclosures may also rankle employees who work in the general vicinity but not directly with the infected person.
Tell everyone in the building
Technically, the workplace is a manager’s “zone of duty,” Mr. Gentile said. That could mean notifying anybody who could have shared air or space with the infected person, but he suggested circumspection with clients.
Tell everyone in the company
Strictly speaking, if there’s no possible contact — in a lobby, elevator or elsewhere — it’s probably not necessary for everyone to know. But wide disclosure can cultivate a culture of transparency and openness, Mr. Schwab said. (It can also become overwhelming at a big company where a lot of cases may be inevitable.) He isn’t totally sold on this approach, but isn’t opposed either.
Which policy do you think is best? Why? Let us know at [email protected], and include your name and location. We might include your response in a future newsletter.
Today’s DealBook Briefing was written by Andrew Ross Sorkin in Connecticut, Lauren Hirsch in New York, Ephrat Livni in Washington, and Michael J. de la Merced and Jason Karaian in London.
Here’s what’s happening
As virus cases rise, countries revisit stimulus plans. Deadlocked negotiations in Washington risk removing support as signs emerge that the economic rebound is losing steam. As European governments impose new restrictions to halt a renewed rise in cases, British lawmakers unveiled a revamped wage-support plan that is less generous than the furlough program it will replace. “I cannot save every business. I cannot save every job,” said Rishi Sunak, Britain’s top financial official.
New York will review coronavirus vaccines itself. Gov. Andrew Cuomo said that before distributing vaccines that are cleared by the federal government, the state will examine them. Mr. Cuomo cited concerns that the Trump administration may be rushing treatments to market: “Frankly, I’m not going to trust the federal government’s opinion.”
Blue Cross insurers agreed to settle a federal antitrust lawsuit for $2.7 billion. The tentative pact would resolve claims that the association of three dozen insurers engaged in a conspiracy to thwart competition among the individual companies.
Pac-12 football will resume play this fall. The West Coast college football conference reversed its position of not playing until at least next year, and could start as soon as Nov. 6. That makes it the latest conference to defy the pandemic’s risks in a bid to shore up its members’ financial health.
“Alexa, activate the home drone.” Amazon unveiled the Ring Always Home Cam, a camera-equipped drone that can fly around your house when you’re not around. (The drone makes a noise when it’s activated, Amazon says, to make it clear when it’s recording.) It will go on sale next year for $250.
Will business leaders take a stance on election credibility?
President Trump again questioned the sanctity of American elections yesterday, referring to voting by mail as a “whole big scam.” Republican lawmakers, who have spent the past few days fielding questions about the president’s previous statements to that effect, spoke with varying degrees of confidence that if Joe Biden wins, the transfer of power would be peaceful.
But business leaders have been fairly quiet. DealBook wants to know: Should they say something? Will they?
A contested election is a business issue. Some advisers have already been preparing their clients for such a situation, DealBook previously reported. A full rejection of the election result would be even more destabilizing, risking civil unrest like the country saw this week in reaction to the Breonna Taylor ruling, forcing businesses to close and workers to stay home.
Outspoken executives have yet to weigh in. Earlier this month, more than 150 leaders from companies like Goldman Sachs, JetBlue and Silver Lake implored Mayor Bill de Blasio to take more decisive action to support New York City’s economic recovery, citing “widespread anxiety over public safety, cleanliness and other quality of life issues.”
• A representative for the group that coordinated the letter, the Partnership for New York City, had no comment on Mr. Trump’s election remarks. (The group is co-chaired by Bill Ford, General Atlantic’s C.E.O., who is currently involved in negotiations with the White House about a TikTok takeover.)
• Jessica Boulanger, a spokeswoman for the Business Roundtable, said, “One of the foundations of our democracy is the peaceful transition of power.” (The group is chaired by Doug McMillon, Walmart’s C.E.O., who is also involved in TikTok negotiations.)
• The U.S. Chamber of Commerce didn’t respond to a request for comment.
Markets haven’t reacted much, either. Virus trends and the prospects for more economic stimulus appear to outweigh worries about Mr. Trump’s recent remarks. (That said, there are persistent doubts that the stock market properly reflects economic reality during the pandemic.) For their part, analysts at Goldman wrote in a note yesterday that investors are overestimating the risk of a delayed election result.
Seen and heard
🤑 “It’s not like Tesla’s profitability is crazy high. Our average profitability for the last four quarters is like maybe 1 percent. So just to be clear, it’s not like we’re minting money. Our valuation makes it seem like we are, but we’re not.” — Elon Musk, Tesla’s C.E.O., setting the record straight
🏨 “People had to make sure they had a room before they actually showed up. That’s much less the case now.” — Leeny Oberg, Marriott’s C.F.O., on the way hotels work now
🍝 “You wake up every day and you’re $300,000 short just in that one restaurant. That’s our best restaurant in the Olive Garden system. We do over $15 million there, and now we’re doing $2,500 a day.” — Gene Lee, the C.E.O. of Darden Restaurants, on the urgency of reopening the Olive Garden in Times Square
👎 “The whole thing is a crock.” — Barry Diller, the chairman of Expedia and IAC, on TikTok’s complex takeover saga
🍓 “The red berry shape reflects our heritage and the values the company was built on. The green shape is our innovative mind-set and ability to pivot to any challenge. The darker green represents our growth, teal is our people and culture, and purple represents the creativity that we hope will propel the company forward.” — Kara Buckler, the director of creative services at J.M. Smucker, on the company’s new logo
Assessing the ‘existential’ risk to Obamacare
The Affordable Care Act is in jeopardy in many, many ways. It is facing, as some put it, an “existential” threat. Most immediately, in November the Supreme Court will consider a challenge to the law’s individual mandate — the requirement to buy insurance or pay a tax penalty — and the justices could invalidate Obamacare entirely, based on that one clause.
This case was always a big deal, but it’s even bigger now following Justice Ruth Bader Ginsburg’s death, and the Republican rush to replace her. The court’s influence over health care law has become an electoral rallying cry, for both sides.
The legal reality: Across the ideological spectrum, influential lawyers believe Obamacare will most likely survive the court’s review for both practical and technical reasons. The penalty for not complying with the mandate was set to zero by lawmakers in 2017, undermining previous court rulings that considered the mandate a constitutional exercise of congressional taxing power because it raised revenue. Obamacare’s challengers now argue that a zero payment isn’t a tax, which makes the mandate clause — and the whole A.C.A. — invalid. But even if the justices conclude that the zero tax penalty makes the mandate unconstitutional, they can simply sever it from the statute and leave the rest to operate as it does today.
A “game of gotcha against Congress” is how Justice Brett Kavanaugh has dismissed the tactic using discrete clauses to try to invalidate entire laws in the past. And the Kirkland & Ellis partner Paul Clement, a former U.S. solicitor general who is on the Trump administration’s short list of prospective Supreme Court justices, said this week at a Georgetown Law virtual conference that there is “an air of surreality” surrounding debates about cutting the clause, implying that there isn’t much of a question about it.
Many businesses back the status quo. If Obamacare were scrapped, “it would be really good for my business but that doesn’t make me excited,” said Doug Hirsch, the C.E.O. of GoodRx, which helps Americans find discounted drugs and had a well-received I.P.O. this week. “I would love to be in a situation in which all Americans have all the health care they need at zero cost.”
• In friend-of-the-court briefs, business groups warned of the risks of repealing the law: America’s Health Insurance Plans said there would be “seismic consequences” for its members; the Small Business Majority Foundation said it would “do great harm” to entrepreneurs; and HCA Healthcare, the largest nongovernmental insurer in the U.S., said the law is “more important than ever” as the pandemic pushes up unemployment.
In the papers
Some of the academic research that caught our eye this week, summarized in one sentence:
• There’s a “widening structural innovation gap” between the biggest pharma companies and the rest of the industry. (Todd Wills and Alan Lipkus)
• Analysts’ corporate earnings forecasts imply that they expect a coronavirus vaccine one year from now. (Harrison Hong, Jeffrey Kubik, Neng Wang, Xiao Xu and Jinqiang Yang)
• Analysts tend to be too optimistic about corporate earnings. (Jules van Binsbergen, Xiao Han and Alejandro Lopez-Lira)
Regulators are taking a closer look at SPACs
Shares of several SPACs dropped yesterday when the S.E.C.’s chairman, Jay Clayton, said the agency will scrutinize SPACs more strictly. Big-name investors have raised billions for these blank-check vehicles, but there is concern about disclosures about hefty fees and discounted shares that founders can get for striking deals, leaving other investors and the companies targeted for takeovers in the dark about incentives.
What Mr. Clayton said: “One of the areas in the SPAC space I’m particularly focused on, and my colleagues are particularly focused on, is the incentives and compensation to the SPAC sponsors,” the S.E.C. chief told Andrew on CNBC. “How much of the equity do they have now? How much of the equity do they have at the time of the I.P.O.-like transaction? What are their incentives? We want to make sure investors understand those things.”
But the S.E.C. may not bring cases soon. A person familiar with the S.E.C. told The Wall Street Journal that Mr. Clayton’s comments “were intended to communicate that regulators are closely reviewing SPAC written disclosures” and “weren’t intended to signal the existence or possibility of enforcement action.”
The speed read
• Palantir and its advisers reportedly expect the data-mining company to be valued at nearly $22 billion in its direct listing, slightly above its last private fund-raising valuation. (WSJ)
• The local TV station owner E.W. Scripps will buy a rival, ION Media, for $2.65 billion — with an assist from Berkshire Hathaway. (Reuters)
• Kevin Mayer, who was briefly TikTok’s C.E.O., is in talks to join the entertainment-focused investment firm RedBird Capital. (NYT)
Politics and policy
• President Trump promised to send $200 discount cards for prescription drugs to 33 million older Americans, a $6.6 billion gift to court a key voting demographic. (NYT)
• Kamala Harris has opened a spigot of Hollywood donor money for Joe Biden’s presidential campaign. (WSJ)
• Google users briefly experienced a widespread service disruption last night, stoking anxiety about the reliability of crucial online services. (NYT)
• Spotify’s founder and C.E.O., Daniel Ek, has pledged to invest 1 billion euros, or $1.2 billion, in European tech start-ups to help them fight against Silicon Valley rivals. (FT)
Best of the rest
• “We Accept Cash, Card and Sedan: In the future, you might pay for things with your car.” (WSJ)
• Arthur O. Sulzberger Jr. will retire as the chairman of The Times on Dec. 31 and be succeeded by his son, A.G. Sulzberger. (NYT)
• The Doobie Brothers sued Bill Murray for unauthorized use of one of their songs. It’s playing out exactly how you hope it would. (NYT)
Thanks for reading! We’ll see you next week.
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