Business
Column: This ‘hot labor summer’ is unifying Los Angeles in a way few could have imagined
It was 4:30 a.m., but the hit sound of this hot summer echoed up and down the streets near City Hall:
“On strike! Shut it down! L.A. is a union town!”
Members of Service Employees International Union Local 721, which represents more than 7,000 city workers, went on a one-day strike Tuesday to highlight what they claim are stalled contract negotiations and unfair labor practices. It was the first walkout involving city workers in over 40 years.
Winchell’s coffee and donuts sat on a table as about 15 people marched and chanted in a small circle in front of the City Hall steps. Few reached for the energy boost: Their fuel in those early hours was the excitement of joining the stream of labor strikes that has hit Los Angeles over the last 12 months and doesn’t seem to be drying up anytime soon.
In December, UCLA graduate student workers joined a five-week UC-wide strike that was the largest of its kind and led to a historic contract. In March, the Los Angeles Unified School District shut down for three days as teachers walked off their jobs alongside their blue-collar co-workers, who were represented by SEIU Local 99 and trying to negotiate a new contract. The Writers Guild of America is 100 days into its strike, while SAG-AFTRA members stopped showing up to work in July — the first time in 63 years that the two Hollywood unions have gone on strike together.
Unite Here Local 11, which represents hotel and hospitality workers, has staged rolling walkouts across Southern California since the Fourth of July weekend. Kaiser Permanente workers picketed across California last month. UPS just dodged a strike. Starbucks baristas continue to unionize across the Southland.
L.A. has seen consequential labor actions before — the Justice for Janitor campaigns of the 1990s, the supermarket strikes of the early 2000s, the last WGA one — that helped realign city politics. Union members are so ubiquitous ‘round town that the colors of their T-shirts — Unite Here red, SEIU purple, SAG-AFTRA black — are as much a part of the city’s palette as Dodger blue and USC cardinal and gold. .
But what’s happening now feels different. There’s a level of cross-union support across radically different workplaces, along with a knowledge of one another’s respective struggles, that I’ve never seen, or frankly ever thought possible.
In a famously fractured city, it’s a lesson everyone can learn. You don’t have to like the labor movement to see that they’re the canary in the coal mine of L.A.’s economic health. If belonging to a union isn’t enough to guarantee a well-paying job, then what is? And if you can’t care about someone else’s struggles, how good of an Angeleno can you truly be?
United Teachers Los Angeles Vice President Julie Van Winkle and a co-worker received cheers when they joined the SEIU picket line Tuesday morning. “L.A. is at a critical point,” Van Winkle said. “We need a big drastic change, and we can only do that on the streets demanding it together.”
“We’re all united, and we’re not gonna take it anymore,” said SEIU 721 Vice President Simboa Wright, who has been a wastewater collection worker for 20 years. When I asked where he lives, Wright laughed and said, “Inland Empire, because I can’t afford to live here!”
Maria Coreas has worked as a city custodian for 21 years. Living in the city “has gotten worse, because our salaries don’t really go up, but the cost of everything does. The bosses have made promises, and they haven’t complied with them. Well, we need to make them comply.”
Even longtime union leaders — prone to superlatives about solidarity while straining behind closed doors to quash inter-union beefs — are surprised.
Unite Here Local 11 Co-President Ada Briceño asked other unions to support her when she spoke about the struggles of hotel workers at the University of California Board of Regents meeting last month in San Francisco. Representatives of the United Farm Workers and National Union of Healthcare Workers showed up to address the regents. Outside, a loud rally included hundreds of members from the American Federation of State, County and Municipal Employees and the United Auto Workers. Briceño described the moment as “mind-blowing.”
“In my 32 years [of organizing], I have not seen this,” she said. “We have started something for the rest of the nation to follow.”
Los Angeles County Federation of Labor President Yvonne Wheeler led some of the predawn chants in front of City Hall. She credited the joint UTLA-SEIU strike in the spring as what “got us to this moment” of cross-sector unity. This spring, Wheeler called a special Labor Fed meeting to urge unions to not just support one another but learn about one another.
“When they saw the similarity of the issues each of them has to deal with, that’s when they realized people needed to stand together,” Wheeler said. “Your fight is their fight. And an injury to one is an injury to all.”
This so-called “hot labor summer” is especially remarkable because it’s happening during the centennial year of what my fellow Times columnist Patt Morrison has described as L.A.’s Big Bang — when Los Angeles leaders effectively announced to the world that the city had arrived.
1923 is when the Hollywood sign went up, along with the Memorial Coliseum, the Automobile Club of California’s Spanish Colonial Revival headquarters near USC, the Biltmore Hotel and El Cholo Café. The previous year saw the debut of the Rose Bowl and the Hollywood Bowl. All are beloved landmarks today, but they opened as civic temples to the L.A. that boosters wanted to sell, a paradise where the problems of big cities — poverty, diversity, density — were far away.
Part of that sales pitch was also a proudly hostile attitude to workers seeking better wages and the right to organize. 1923 was also the year that famed author Upton Sinclair was arrested in San Pedro for reciting the U.S. Constitution to show his support for striking port workers, whom authorities were arresting by the hundreds. This scorched earth policy reigned for decades in a city whose fathers have long touted its key industries — Hollywood, oil, oranges, housing, aerospace, tech — with the paternalistic view that the bosses and monied few knew better than the rabble about how to develop L.A.
That sort of thinking led to the segregated, stratified megalopolis of today, which seems perpetually on the precipice of collapsing on itself. All these strikes aren’t merely individual efforts but a collective rallying cry: We’re a city of workers — blue collar and white collar, unionized and not, immigrant and native — and no one’s future is secure unless everyone can earn a just wage.
If L.A. can think of itself like this, a more equitable city — one that the titans of a century ago never even considered — is possible.
I left the SEIU mini-rally as the sun began to rise. The crowd in front of City Hall now numbered about 100 and was growing by the minute. The next day, the strikers would return to work.
After marching for a good half hour, Assemblymember Isaac Bryan (D-Los Angeles) stood on top of the steps with a picket sign in one hand and a coffee cup in the other.
“L.A. can show the world that you can take care of the people that keep the city running — all parts of it,” he said, softly chanting along with the boisterous crowd. Volunteers were setting up a stage for a lunchtime rally. A flatbed truck displayed 3-foot-tall letters spelling out “Union Strong.”
“It’s not a down moment,” Bryan concluded. “It’s a hope moment.”
Business
Cookies, Cocktails and Mushrooms on the Menu as Justices Hear Bank Fraud Case
In a lively Supreme Court argument on Tuesday that included references to cookies, cocktails and toxic mushrooms, the justices tried to find the line between misleading statements and outright lies in the case of a Chicago politician convicted of making false statements to bank regulators.
The case concerned Patrick Daley Thompson, a former Chicago alderman who is the grandson of one former mayor, Richard J. Daley, and the nephew of another, Richard M. Daley. He conceded that he had misled the regulators but said his statements fell short of the outright falsehoods he said were required to make them criminal.
The justices peppered the lawyers with colorful questions that tried to tease out the difference between false and misleading statements.
Chief Justice John G. Roberts Jr. asked whether a motorist pulled over on suspicion of driving while impaired said something false by stating that he had had one cocktail while omitting that he had also drunk four glasses of wine.
Caroline A. Flynn, a lawyer for the federal government, said that a jury could find the statement to be false because “the officer was asking for a complete account of how much the person had had to drink.”
Justice Ketanji Brown Jackson asked about a child who admitted to eating three cookies when she had consumed 10.
Ms. Flynn said context mattered.
“If the mom had said, ‘Did you eat all the cookies,’ or ‘how many cookies did you eat,’ and the child says, ‘I ate three cookies’ when she ate 10, that’s a false statement,” Ms. Flynn said. “But, if the mom says, ‘Did you eat any cookies,’ and the child says three, that’s not an understatement in response to a specific numerical inquiry.”
Justice Sonia Sotomayor asked whether it was false to label toxic mushrooms as “a hundred percent natural.” Ms. Flynn did not give a direct response.
The case before the court, Thompson v. United States, No. 23-1095, started when Mr. Thompson took out three loans from Washington Federal Bank for Savings between 2011 and 2014. He used the first, for $110,000, to finance a law firm. He used the next loan, for $20,000, to pay a tax bill. He used the third, for $89,000, to repay a debt to another bank.
He made a single payment on the loans, for $390 in 2012. The bank, which did not press him for further payments, went under in 2017.
When the Federal Deposit Insurance Corporation and a loan servicer it had hired sought repayment of the loans plus interest, amounting to about $270,000, Mr. Thompson told them he had borrowed $110,000, which was true in a narrow sense but incomplete.
After negotiations, Mr. Thompson in 2018 paid back the principal but not the interest. More than two years later, federal prosecutors charged him with violating a law making it a crime to give “any false statement or report” to influence the F.D.I.C.
He was convicted and ordered to repay the interest, amounting to about $50,000. He served four months in prison.
Chris C. Gair, a lawyer for Mr. Thompson, said his client’s statements were accurate in context, an assertion that met with skepticism. Justice Elena Kagan noted that the jury had found the statements were false and that a ruling in Mr. Thompson’s favor would require a court to rule that no reasonable juror could have come to that conclusion.
Justices Neil M. Gorsuch and Brett M. Kavanaugh said that issue was not before the court, which had agreed to decide the legal question of whether the federal law, as a general matter, covered misleading statements. Lower courts, they said, could decide whether Mr. Thompson had been properly convicted.
Justice Samuel A. Alito Jr. asked for an example of a misleading statement that was not false. Mr. Gair, who was presenting his first Supreme Court argument, responded by talking about himself.
“If I go back and change my website and say ‘40 years of litigation experience’ and then in bold caps say ‘Supreme Court advocate,’” he said, “that would be, after today, a true statement. It would be misleading to anybody who was thinking about whether to hire me.”
Justice Alito said such a statement was, at most, mildly misleading. But Justice Kagan was impressed.
“Well, it is, though, the humblest answer I’ve ever heard from the Supreme Court podium,” she said, to laughter. “So good show on that one.”
Business
SEC probes B. Riley loan to founder, deals with franchise group
B. Riley Financial Inc. received more demands for information from federal regulators about its dealings with now-bankrupt Franchise Group as well as a personal loan for Chairman and co-founder Bryant Riley.
The Los Angeles-based investment firm and Riley each received additional subpoenas in November from the U.S. Securities and Exchange Commission seeking documents and information about Franchise Group, or FRG, the retail company that was once one of its biggest investments before its collapse last year, according to a long-delayed quarterly filing. The agency also wants to know more about Riley’s pledge of B. Riley shares as collateral for a personal loan, the filing shows.
B. Riley previously received SEC subpoenas in July for information about its dealings with ex-FRG chief executive Brian Kahn, part of a long-running probe that has rocked B. Riley and helped push its shares to their lowest in more than a decade. Bryant Riley, who founded the company in 1997 and built it into one of the biggest U.S. investment firms beyond Wall Street, has been forced to sell assets and raise cash to ease creditors’ concerns.
The firm and Riley “are responding to the subpoenas and are fully cooperating with the SEC,” according to the filing. The company said the subpoenas don’t mean the SEC has determined any violations of law have occurred.
Shares in B. Riley jumped more than 25% in New York trading after the company’s overdue quarterly filing gave investors their first formal look at the firm’s performance in more than half a year. The data included a net loss of more than $435 million for the three months ended June 30. The shares through Monday had plunged more than 80% in the past 12 months, trading for less than $4 each.
B. Riley and Kahn — a longstanding client and friend of Riley’s — teamed up in 2023 to take FRG private in a $2.8-billion deal. The transaction soon came under pressure when Kahn was tagged as an unindicted co-conspirator by authorities in the collapse of an unrelated hedge fund called Prophecy Asset Management, which led to a fraud conviction for one of the fund’s executives.
Kahn has said he didn’t do anything wrong, that he wasn’t aware of any fraud at Prophecy and that he was among those who lost money in the collapse. But federal investigations into his role have spilled over into his dealings with B. Riley and its chairman, who have said internal probes found they “had no involvement with, or knowledge of, any alleged misconduct concerning Mr. Kahn or any of his affiliates.”
FRG filed for Chapter 11 bankruptcy in November, a move that led to hundreds of millions of dollars of losses for B. Riley. The collapse made Riley “personally sick,” he said at the time.
One of the biggest financial problems to arise from the FRG deal was a loan that B. Riley made to Kahn for about $200 million, which was secured against FRG shares. With that company’s collapse into bankruptcy in November wiping out equity holders, the value of the remaining collateral for this debt has now dwindled to only about $2 million, the filing shows.
Griffin writes for Bloomberg.
Business
Starbucks Reverses Its Open-Door Policy for Bathroom Use and Lounging
Starbucks will require people visiting its coffee shops to buy something in order to stay or to use its bathrooms, the company announced in a letter sent to store managers on Monday.
The new policy, outlined in a Code of Conduct, will be enacted later this month and applies to the company’s cafes, patios and bathrooms.
“Implementing a Coffeehouse Code of Conduct is something most retailers already have and is a practical step that helps us prioritize our paying customers who want to sit and enjoy our cafes or need to use the restroom during their visit,” Jaci Anderson, a Starbucks spokeswoman, said in an emailed statement.
Ms. Anderson said that by outlining expectations for customers the company “can create a better environment for everyone.”
The Code of Conduct will be displayed in every store and prohibit behaviors including discrimination, harassment, smoking and panhandling.
People who violate the rules will be asked to leave the store, and employees may call law enforcement, the policy says.
Before implementation of the new policy begins on Jan. 27, store managers will be given 40 hours to prepare stores and workers, according to the company. There will also be training sessions for staff.
This training time will be used to prepare for other new practices, too, including asking customers if they want their drink to stay or to go and offering unlimited free refills of hot or iced coffee to customers who order a drink to stay.
The changes are part of an attempt by the company to prioritize customers and make the stores more inviting, Sara Trilling, the president of Starbucks North America, said in a letter to store managers.
“We know from customers that access to comfortable seating and a clean, safe environment is critical to the Starbucks experience they love,” she wrote. “We’ve also heard from you, our partners, that there is a need to reset expectations for how our spaces should be used, and who uses them.”
The changes come as the company responds to declining sales, falling stock prices and grumbling from activist investors. In August, the company appointed a new chief executive, Brian Niccol.
Mr. Niccol outlined changes the company needed to make in a video in October. “We will simplify our overly complex menu, fix our pricing architecture and ensure that every customer feels Starbucks is worth it every single time they visit,” he said.
The new purchase requirement reverses a policy Starbucks instituted in 2018 that said people could use its cafes and bathrooms even if they had not bought something.
The earlier policy was introduced a month after two Black men were arrested in a Philadelphia Starbucks while waiting to meet another man for a business meeting.
Officials said that the men had asked to use the bathroom, but that an employee had refused the request because they had not purchased anything. An employee then called the police, and part of the ensuing encounter was recorded on video and viewed by millions of people online, prompting boycotts and protests.
In 2022, Howard Schultz, the Starbucks chief executive at the time, said that the company was reconsidering the open-bathroom policy.
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