On this day in legal history, August 14, 1935, President Franklin D. Roosevelt signed the Social Security Act. The act created unemployment insurance, pension plans for the elderly and what would become “Aid to Families with Dependent Children” (AFDC).
In the midst of the Great Depression, the Social Security Act was conceived to provide economic security for the aged. Early in January 1935, the Committee on Economic Security (CES) submitted a report to President Roosevelt, and congressional hearings followed in the House Ways & Means Committee and the Senate Finance Committee. While some provisions faced close votes in committees, the bill passed overwhelmingly in both houses, and after a conference lasting throughout July, it was sent to President Roosevelt for his signature. Signed into law on August 14, 1935, the act included provisions for general welfare and created a social insurance program to pay a continuing income to retired workers 65 or older.
The significance of the Social Security Act lay in its long-term approach to economic security through a contributory system, where workers contributed to their own future retirement benefits. Notably, two major provisions relating to the elderly were Title I, supporting state welfare programs for the aged, and Title II, the new social insurance program known as Social Security. Originally, benefits were to be paid to primary workers at age 65, based on their payroll tax contributions during their working life, with collections starting in 1937 and monthly benefits in 1942 (later advanced to 1940 under amendments). President Roosevelt envisioned this act as a moderate alternative to more radical solutions of the time, establishing a foundation for the protection of average citizens against job loss and poverty in old age.
Nearly 70 Indian nationals, who were employed in the U.S. through a training program for foreign graduates, are suing the U.S. government for denial of their H-1B visas, citing employer fraud. The Department of Homeland Security (DHS) denied the visas due to the workers' association with businesses that perpetrated fraud, without allowing the plaintiffs to respond. The workers are now requesting the court to overturn the DHS's decision on their visa applications, arguing that they should be allowed to respond to fraud allegations. The lawsuit also claims that the agency violated the Administrative Procedure Act by exceeding its authority and deeming the plaintiffs as inadmissible without full evidence. The plaintiffs were associated with four IT staffing companies, later discovered by DHS to have engaged in a fraudulent scheme. Plaintiff Siddhartha Kalavala Venkata's case highlights the personal impact, as his H-1B visa was denied, forcing him to leave the U.S. The lawsuit argues that the Immigration and Nationality Act requires DHS to provide notice of actions like visa sanctions, and the opportunity to submit evidence in response.
A National Labor Relations Board (NLRB) judge has ruled that Starbucks Corp.'s civility rule in its employee handbook violated federal labor law as it could be perceived as discouraging union activity. Administrative Law Judge Michael Rosas ordered Starbucks to rescind its "How We Communicate" policy and notify U.S. workers of its illegality via text message, social media postings, and other electronic means. This marks the 22nd time that an administrative law judge has ruled that Starbucks violated federal labor law related to union organizing efforts; one decision dismissed all allegations. Judge Rosas also found Starbucks guilty of other unfair labor practices in Philadelphia stores, including illegally firing and threatening workers for union activity. The judge’s ruling on the civility rule is notable for its application of a new NLRB precedent. Starbucks must take specific actions to rescind the rule and can appeal the decision to the NLRB. A company spokesperson said Starbucks disagrees with the ruling and is exploring further legal options.
Lawyers from various firms are investigating the deadly Maui fires, focusing on the utility power lines as a potential source of ignition. Evidence is being collected that points to Hawaiian Electric Industries Inc.'s damaged power infrastructure as the cause of the spark that led to the flames. Hawaiian Electric has come under scrutiny for not turning off power despite warnings of critical fire conditions, and a major grid fault was detected just before the fire started. Plaintiff law firms have filed a class-action lawsuit against Hawaiian Electric on behalf of thousands affected by the fire. Legal experts note that if power lines are linked to the fire, Hawaiian Electric will need to be shown to have been negligent or that it could have reasonably prevented the loss. The situation has already impacted Hawaiian Electric's stock, which has tumbled due to investor concerns over the company's potential role in the blazes. Legal liability could be significant, with damages from the blaze estimated at approximately $5.5 billion.
McDonald's Corp. has quietly removed the abbreviation "ESG" (Environmental, Social, and Governance) from some parts of its website. The change comes during a time when ESG initiatives are facing criticism from some conservative policymakers in the US. According to Bloomberg News, one web page previously titled “ESG Approach & Progress” is now labeled “Our Approach & Progress,” and other similar changes have been made. McDonald's has substituted the phrase “environmental and social issues” for the ESG abbreviation in some instances. The company declined to comment on the changes but reiterated its commitment to reporting annually on its progress on social and environmental goals. The move follows a backlash against ESG-related shareholder proposals, often criticized as "woke capitalism" by some conservatives.
Sam Bankman-Fried, the former FTX Chief Executive who faces fraud charges over the bankruptcy of the cryptocurrency exchange, has been ordered to prepare for his trial from Brooklyn's Metropolitan Detention Center (MDC). U.S. District Judge Lewis Kaplan ruled that Bankman-Fried must be jailed for witness tampering while on a $250 million bond. MDC is notorious for poor conditions, with reports of staffing shortages, power outages, maggots in food, and other inhumane situations. In 2019, an electrical fire cut off the jail's heat and lighting for days, and convicted sex trafficker Ghislaine Maxwell's lawyers once likened her conditions there to those of Hannibal Lecter in "The Silence of the Lambs." Bankman-Fried's lawyers had argued against jailing him at MDC, citing concerns that a "staffing crisis" would hinder his access to evidence. The jail, founded in 1994, currently hosts 1,608 inmates and became the main facility housing detainees awaiting federal trials in New York City after the Manhattan Correctional Center closed in 2021. Other high-profile inmates at MDC include the former president of Honduras, Juan Orlando Hernandez, and exiled Chinese businessman Guo Wengui, both of whom have pleaded not guilty to their respective charges.