Companies must now decide whether to proceed with planned mandates without cover from the federal government.
Shareholders called for action after evidence emerged that Bill Gates had sought romantic relationships with employees. S&P 500 — % Dow — % Nasdaq — % As of Data delayed at least 15 minutes Source: FactSet By Emily Flitter Microsoft has selected a law firm to review its sexual harassment and gender discrimination policies, the company’s board announced on Thursday, after shareholders raised alarms about how Microsoft and Bill Gates, one of its founders, had treated employees, especially women. The board said it had chosen Arent Fox, based in Washington, D.C. Microsoft said the firm had never done employment-related work for it in the past. Shareholders passed a resolution during the company’s 2021 annual meeting to review the policies Microsoft has in place for its employees to protect them against abuse and unwanted sexual advances. The resolution passed with support from almost 78 percent of Microsoft’s shareholders. It was the only of five proposals on ethical issues put forth by shareholders to succeed. Others, like a call for a report on race- and gender-based pay gaps at the company and a pledge to prohibit sales of facial recognition to government entities, failed. “Microsoft is under intense public scrutiny due to numerous claims of sexual harassment and an alleged failure to address them adequately and transparently,” the text of the resolution said. “Reports of Bill Gates’s inappropriate relationships and sexual advances toward Microsoft employees have only exacerbated concerns, putting in question the culture set by top leadership and the board’s role holding those culpable accountable.” Mr. Gates solicited at least two employees while he was running Microsoft, according to reports in The New York Times and The Wall Street Journal. In one incident, in 2007, Mr. Gates sat through a presentation by a Microsoft employee, then immediately emailed her to ask for a date. Microsoft leaders later warned Mr. Gates not to do things like that. In 2019, Microsoft’s board received a letter from an engineer claiming to have had a sexual relationship with Mr. Gates in 2000. A spokeswoman for Mr. Gates confirmed that the two had an affair that “ended amicably.” Satya Nadella, Microsoft’s chief executive, said in a statement on Thursday that workplace culture was Microsoft’s “No.1 priority.” “We’re committed not just to reviewing the report but learning from the assessment so we can continue to improve the experiences of our employees,” he said. Karen Weise contributed reporting. By Emma Goldberg and Lauren Hirsch A requirement that large companies mandate vaccines or weekly testing for workers was blocked by the Supreme Court on Thursday, leaving the often fraught choice up to employers. Parts of the rule, which the Occupational Safety and Health Administration issued in November, had been scheduled to take effect on Monday. Vaccine mandates have been a controversial approach to battling the pandemic. Several major companies, including United Airlines and Tyson Foods, already have such requirements, while others are waiting for legal battles to be resolved. Some companies have been concerned about losing employees when workers are already scarce, and although firms with mandates have said those concerns have largely not come to fruition, a national requirement could have further eased those concerns. Walmart, Amazon and JPMorgan Chase, three of the largest private employers in the United States, have yet to issue broad requirements for their staff. A spokesman for Macy’s, which began to request the vaccination status of its employees this month, said the retailer was “evaluating this late breaking development.” Some companies with vaccine mandates said keeping those policies might become more difficult in light of the Supreme Court’s ruling. Franz Spielvogel, who owns Laughing Planet, a chain of fast casual restaurants with more than 200 employees, required his employees to be fully vaccinated or submit to weekly testing by mid-January and does not plan to change that rule. But the Supreme Court’s decision frustrated him, he said, because he no longer has federal cover to justify his policy. “It turns into a bit of a head scratcher for us,” Mr. Spielvogel said, though the recent surge of Covid-19 cases has made him feel more strongly about the need for a mandate. “As a business owner and as an employer and as someone dealing with the public, I want my customers to know they’re walking into a safe place.” In a November poll of 543 companies by the consulting firm Willis Towers Watson,57 percent said they either required or planned to require Covid-19 vaccinations. That included 32 percent that planned to mandate vaccines only if the OSHA rule takes effect. Seven percent said they planned to carry it out regardless of the outcome. A little more than 70 percent of the adult U.S. population is fully vaccinated. “Our recent survey suggests that many more employers would have pursued vaccine mandates if the rule was left in place,” Dr. Jeffrey Levin-Scherz, who leads the consulting firm’s clinical response to the coronavirus, said in a statement. The National Retail Federation, which was one of several trade groups to sue the administration over the mandate, called the Supreme Court’s action a “significant victory for employers.” The organization said it “urges the Biden administration to discard this unlawful mandate and instead work with employers, employees and public health experts on practical ways to increase vaccination rates and mitigate the spread of the virus in 2022.” Companies have been preparing for months for the mandate, and many may still go forward with their policies, said Douglas Brayley, an employment lawyer at Ropes & Gray. He noted that the Supreme Court did not say anything against employer vaccination mandates. Some local and state laws still require employers to mandate vaccines or weekly testing. New York City, for example, has a more stringent rule than the federal government’s, requiring all on-site workers to be vaccinated. But other states have laws blocking mask and vaccine mandates, which the federal rule would have pre-empted. With the Biden administration’s rule blocked, many employers in those states will be unable to require vaccines, said David Michaels, an epidemiologist and a professor at George Washington University and a former OSHA administrator. “This decision will be an excuse for those employers who care less about their employees to return to business as usual,” Dr. Michaels said. He added that the decision could exacerbate the divide between white-collar workers who can remain at home and workers who have to conduct business in person as Covid cases surge. United Airlines said this week that while 3,000 of its employees had Covid-19, none of its vaccinated employees were currently hospitalized. Since its vaccine policy went into effect, the airline said, its employee hospitalization rate had dropped significantly below the rate for the U.S. population. Dr. Megan Ranney, an emergency physician and the associate dean at Brown University’s School of Public Health, called the ruling a “ tremendous blow” to national efforts to battle the pandemic. “There is 30 percent of the movable adult population” that isn’t vaccinated for which a mandate may have made a difference, she said. “Now, the mandates are not going to be in place, and so I worry that those folks are going to continue to not get vaccinated — unless an awful lot of employers decide that this is in their best interest to put in place.” Sapna Maheshwari contributed reporting. Data delayed at least 15 minutes Source: FactSet By Mohammed Hadi Stocks tumbled on Thursday in a late sell-off led by shares of technology companies, ending two days of relative calm on Wall Street. The S&P 500 fell 1.4 percent, while the Nasdaq composite slid 2.5 percent, losses that wiped out gains made by both benchmarks over the past two days. Thursday’s trading echoed a wave of selling that hit markets last week, with large technology weighing on the broad market. Tesla, one of the biggest companies in the S&P 500, was one of the worst performers in the index, falling 6.8 percent. Microsoft fell 4.2 percent, Amazon dropped 2.4 percent, and Apple and Google slid about 2 percent. The Nasdaq is down more than 5 percent this year, and the S&P 500 is down more than 2 percent, a decline that has come as investors adjust their expectations for interest rates in the year ahead as the Federal Reserve looks to get inflation under control and cuts its support for the economy. The central bank is already slowing its bond-buying program, and it has signaled that it could soon raise interest rates and begin to shrink its asset holdings in a bid to further cool off the economy. “We have a set of tools — they are very effective — and we will use them to bring inflation back down,” Lael Brainard, a Fed governor whom President Biden has nominated to become the central bank’s vice chair, said on Thursday at a Senate hearing. Economists expect the Fed to begin raising interest rates as soon as March. Rising interest rates discourage risk-taking by investors, which tends to hit tech stocks more than others. What’s more, shares of many technology companies trade at high valuations because of fast growth and expectations that they will produce significant profits in the future. But higher interest rates put future growth in doubt and make those future earnings worth less to current investors. By Stacy Cowley and Tara Siegel Bernard Navient, once one of the country’s largest student loan servicing companies, reached a $1.85 billion deal with 39 states to settle claims that it had made predatory loans that saddled borrowers with crushing debts they were highly unlikely to repay. The deal, announced Thursday, requires Navient to cancel $1.7 billion in delinquent private student loan debts for nearly 66,000 borrowers and pay $95 million in restitution. The private loans were crucial to Navient’s ability to make a large volume of lucrative federal loans, prosecutors said. “Navient repeatedly and deliberately put profits ahead of its borrowers — it engaged in deceptive and abusive practices, targeted students who it knew would struggle to pay loans back and placed an unfair burden on people trying to improve their lives through education,” said Josh Shapiro, the attorney general of Pennsylvania, one of several states that had sued Navient. Most of those who took out the loans that will be forgiven under the settlement attended for-profit schools — like the defunct ITT Technical Institute — that often have low graduation rates and poor job-placement records. The private loans were — in Navient’s own words, according to legal filings — a “baited hook” to reel in more federally backed loans. At some schools, Navient anticipated that more than 90 percent of the loans would default. But what it lost on the private loans was far outweighed by what it gained on the federal loans — guaranteed by the government — that students at those schools took out. Under Education Department rules, no more than 90 percent of a school’s tuition payments can come from federal funding. The private loans were intended, according to court filings, to fill that gap and attract students who would then take out the lucrative federal loans that the schools — and Navient — relied on. Navient, which did not admit any fault in the settlement, said in a statement that it did not act illegally. “The company’s decision to resolve these matters, which were based on unfounded claims, allows us to avoid the additional burden, expense, time and distraction to prevail in court,” said Mark Heleen, Navient’s chief legal officer. The deal, which covers only borrowers from participating states and Washington, D.C., would be life-changing for Ashley Hardin, who borrowed more than $150,000 to finance her dream of becoming a professional photographer. “It is just a big weight lifted,” said Ms.
