Trump Administration Broadens Corporate DEI Crackdown
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As companies seek to close growing gaps in skills and talent, Deloitte U.S. CEO Jason Garzadas believes it's important for organizations to understand their baseline of skills.
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The DOJ turns to a fraud law to target corporate DEI efforts. Plus, Lululemon's founder launches a proxy fight to shake up the struggling retailers' board. And facing new and evolving threats, Western militaries prepare to spend big on new defense technology.
We track and monitor incidents of suspected Russian hybrid warfare. And so these are acts of sabotage, subversion, provocations, disinformation, cyber attacks. And we've seen a significant increase
It's Monday, December 29th. I'm Luke Vargas for The Wall Street Journal, and this is What's News, in your feed once a day over the holidays with top headlines and business stories moving the world today. We are exclusively reporting that Google and Verizon are among the targets of Justice Department investigations into DEI initiatives in the workplace. The civil probes are being carried out under the False Claims Act. While the law is typically used in health care fraud cases, the DOJ contends that holding a federal contract while still considering diversity in hiring and promotions is in effect fraud against the government. Google and Verizon declined to comment. People familiar with the investigations say the government is also looking at companies in the auto, pharmaceutical, defense, and utilities industries.
I asked the journal's Lydia Wheeler how to interpret the new investigations.
These civil probes are proceeding under the umbrella of an anti-fraud law called the False Claims Act, which... has traditionally been used to go after contractors who basically like bill the government for work that was never performed or inflate the cost of services rendered. And, you know, attorneys I spoke with said that this is a novel use of the law and that the False Claims Act has never been used in this way to advance a president's political agenda. The stakes are really high for businesses. So if a civil lawsuit is brought, the company could be on the hook to not only pay back what they made from the government in this contract, but three times the amount. So millions of dollars we're talking about here.
The founder of Lululemon, Chip Wilson, is launching a proxy fight to remake the athletic clothing company's board before it chooses a new CEO. Wilson, Lululemon's second biggest shareholder, said today that he's nominated three director candidates, confirming an earlier report by the journal. He said shareholders wouldn't trust a CEO picked by the current board, as the athletic apparel retailer is in an identity crisis, with sales stagnating in the U.S. and competition rising from upstart brands. And Wilson isn't the only one pushing for change. Activist Elliott Investment Management has built a more than $1 billion stake in Lululemon and is pushing a CEO candidate, Ralph Lauren executive Jane Nielsen.
It's copper's turn in the spotlight after silver and gold hit new price records in Friday trading. Copper futures on the London Metals Exchange are on pace to notch their own record today and are now up more than 40% this year. Journal Europe business editor Alex Frangos told me that both long and short-term factors are driving the rise.
What investigations is the DOJ launching against corporate DEI initiatives?
Copper's had an incredible year. Part of that is the AI boom, which requires all these data centers, which require a lot of power, which requires a lot of copper, because copper wire is so important to generating electricity and transmitting electricity. You then have possibility of tariffs coming into effect on copper, which would raise the price of copper coming into the US.
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