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One Thing Environmentalists and Trump Actually Agree On

Mother Jones

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Environmental groups cheered when President Donald Trump pounded the last nail into the Trans-Pacific Partnership’s coffin, finalizing the United States’ anticipated withdrawal from the controversial trade deal. But the global trade and environment debate isn’t over by a long shot. Since the TPP’s demise, environmental groups like the Sierra Club have quickly refocused their efforts around NAFTA—the 1994 trade deal brokered by the Bush and Clinton administrations between the United States, Canada, and Mexico—which Trump repeatedly criticized during his campaign and has indicated he wants to renegotiate quickly.

The original trade deal that set a precedent for many of the TPP’s provisions, NAFTA has never scored well with environmentalists, despite being lauded by supporters (PDF) as the first international trade deal ever to incorporate environmental and labor side agreements. Though its renegotiations could theoretically provide an opportunity to address the deal’s criticisms, some groups fear that Trump will use the opportunity to further expand corporate interests and intensify environmental risks.

Here’s a pocket guide for understanding the implications.

What’s up with environmentalists hating NAFTA so much?

They don’t hate everything about it—at least not in theory. Environmental groups have argued in the past that effective trade deals can be used as a positive reinforcement mechanism for advancing international climate and human rights goals. NAFTA, however, “included unenforceable labor and environmental commitments and side agreements that were not part of the core text and that had no teeth to them,” says Ilana Solomon, director of the Sierra Club’s Responsible Trade Program.

But environmentalists’ main objection to NAFTA has to do with a section called Chapter 11, which outlines a mechanism called the investor-state dispute settlement system (ISDS).

The ISDS process states that whenever a federal government introduces a new regulation that negatively affects the value of a foreign investment, the investor has the right to sue the government in private trade tribunals. If the investor wins, the settlement amount, undisclosed to the public, is footed by taxpayer money. In other words, the ISDS process “essentially gives private corporations the status of nations under international law and the incredibly powerful and very secretive tribunal,” says Martin Wagner, the managing attorney of Earthjustice’s International Program.

Though this may not seem like it’s directly related to the environment, the majority of investor-state cases brought up under NAFTA have had nothing to do with traditional trade issues. Instead, they have attacked environmental, energy, public health, and land use policies, to name a few. Some of the most controversial cases have included a challenge to Quebec’s temporary fracking ban (still pending), a challenge to California’s phase-out of toxic chemical fuel additives (dismissed after six years), and most recently, a challenge to Barack Obama’s decision to block the Keystone XL pipeline, in which TransCanada sued the US government for $15 billion. (The case is still pending.)

As of October 2016, pending NAFTA claims totaled over $50 billion, according to an analysis performed by Public Citizen.

Then why don’t we just get rid of the investments part?

Good question. Supporters argue that it’s an important tool for foreign investors to protect their rights against governments and thereby encourages more foreign direct investment. But environmentalists aren’t the only ones who find fault with Chapter 11.

Simon Lester, a trade policy analyst at the libertarian CATO Institute, says he believes the proponents’ arguments are outdated. “I just don’t see any evidence that Chapter 11 does anything for trade liberalization or investment liberalization or the economy,” he says, or that “domestic courts couldn’t do a good job” in the international tribunals’ place. “So I say delete it and be done with it. But there’s a lot of pushback” from business groups, like the US Chamber of Commerce, and the State Department. “The people who wanted it in there want to keep it in there,” he says.

“Really what proponents are left with…is that corporations want it,” echoes Matt Porterfield, a Georgetown Law adjunct professor who studies the interplay between international trade, investment rules, and environmental policy. Precedent for the elimination and restriction of ISDS also already exists. India recently came out with a new investment treaty model that imposes limits on the investor-state model, for example. During negotiations for the Transatlantic Trade and Investment Partnership (T-TIP) between the United States and the European Union, widespread opposition to investor-state also prompted the European Union to propose a replacement system.

How likely is Trump to ditch Chapter 11?

It’s difficult to predict what will happen during renegotiations, given that Trump has made little indication of what he’s looking for.

But Earthjustice’s Wagner doesn’t have high hopes. “We see that the administration is full of corporate representatives who absolutely show no interest in promoting the public good—real interests of human beings and the environment—in any way, much less in the place where the corporate interest has the opposite desire.”

There is a small possibility that the administration will update NAFTA’s Chapter 11 to the most recent investment treaty model, says Porterfield; the United States put together this model in 2012 with the intention to “clarify the government’s ability to defend itself,” says Porterfield’s colleague Robert Stumberg, director of the Harrison Institute for Public Law. He adds that there really is “no assurance” that Trump will keep the pro-government edits, given his pro-investor record.

Can Trump screw over the environment even more during the renegotiation process?

Aside from expanding existing investors’ rights, a renegotiated NAFTA could also dramatically increase the number of investors who are granted those rights.

Currently, Mexico’s energy industry is excluded from NAFTA’s ISDS provisions because the industry was controlled by Pemex, a state-owned enterprise, when the deal was first negotiated. But in the last few years, Mexico has reprivatized its oil and gas under President Enrique Peña Nieto to stimulate foreign direct investment.

“It’s very easy to see how the US oil and gas industry, how the Mexican oil and gas industry, how the Canadian industry could easily pressure the Mexican government into coming in line with the other NAFTA parties and allowing those suits,” says Carroll Muffett, president of the Center for International Environmental Law. He fears that such a move—which has been recommended by the Heritage Foundation, a far-right policy think tank—will leave very few legal protections left for halting damaging fossil fuel infrastructure projects.

What are environmentalists planning to do next?

Unless Trump only renegotiates NAFTA’s tariffs, any newly drafted trade deal will need to get Congress’ approval. Solomon says the Sierra Club plans to mobilize an opposition campaign to stop the deal in Congress, and she encourages people to take advantage of their representatives’ town halls.

NAFTA’s provisions, once settled, can’t be challenged in court like most other policies, says Wagner, emphasizing the consequences of waiting until after the renegotiations to speak out. “That’s one of the things about these trade agreements that is really nefarious—they establish law that applies domestically that doesn’t go through the democratic lawmaking process.” On top of that, he points out, “it’s really hard to reopen a trade agreement.”

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One Thing Environmentalists and Trump Actually Agree On

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Saving for Retirement Is a Struggle—Unless You’re a CEO

Mother Jones

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President Barack Obama has called runaway income inequality the “defining issue of our time.” The disparity between exploding corporate profits and stagnating paychecks fueled Bernie Sanders’ presidential campaign and continues to grow. Currently, the United States has a wider gap between the very rich and everyone else than at any time since the late 1920s. And according to a new study from the Institute for Policy Studies, that spells disaster for Americans trying to save enough to retire.

The study, titled “A Tale of Two Retirements,” found that in 2015 just 100 CEOs had retirement funds worth $4.7 billion—equivalent to the entire retirement savings of the least wealthy 41 percent of American families, or 116 million people. That figure is even more staggering when broken down by race: Those 100 execs’ retirement funds are worth as much as the entire retirement savings of the bottom 44 percent of white working-class families, the bottom 59 percent of African American families, and the bottom 75 percent of Latino families.

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Look at it another way. Those 100 CEOs have nest eggs large enough to generate a retirement check of more than $250,000 per month for the rest of their lives. Meanwhile, the average American fortunate enough to have a 401(k) plan has socked away only enough to receive a monthly check of just $101. And those are the lucky ones: 37 percent of all US households have no retirement savings at all. Neither do 51 percent of African American families and 66 percent of Latino families. Things are also particularly bleak for millennials, as Americans younger than 40 have saved 7 percent less for retirement than similarly aged boomers.

The hollowing out of workers’ retirement benefits punishes female retirees, in particular: Median incomes for women 65 and older are 45 percent lower than men’s. And since women live longer than men, on average, they must stretch their retirement savings even further.

So who are these rapacious retirees? Many of them head companies that have been cutting back on worker pensions and retirement funds for years. John Hammergen, the CEO of the pharmaceutical giant McKesson, holds nearly $150 million in retirement assets. Shortly after joining the company in 1996, he closed its pension fund to all new employees. Yet Hammergen found enough money to set up a retirement account that has furnished him with assets worth more than $20,000 for every day he’s spent at the company’s helm.

Walmart CEO Doug McMillon already had $67.8 million stashed in an untaxed, deferred compensation account in 2015, despite having only held his post since 2014. His predecessor, Michael Duke, retired with more than $140 million in deferred compensation. In contrast, fewer than two-thirds of Walmart’s 1.5 million employees have a company-sponsored retirement account. Those who do have an average balance of less than $24,000, enough for a monthly retirement check of $131—not even 0.04 percent of what McMillon can expect to take home every month.

Jeff Immelt, the CEO of General Electric, has more than $92 million in retirement assets. Between 1987 and 2011, the company contributed not one penny to employee pension plans, counting on rising stock prices to offset its expected contribution. After the economy crashed in 2008, Immelt froze pensions and closed them to new participants. The company has only funded 67 percent of its outstanding pension obligation to workers and its pension deficit has grown by $5 billion since 2011. During the same time, Immelt’s company-sponsored retirement assets have swelled from $53 million to $92 million.

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So how has this happened? Simply, the tax rules are structured in favor of massive executive retirement packages. Ordinary workers face strict limits on how much pre-tax income they invested in tax-deferred plans like 401(k)s. (The current limit is $18,000.) CEOs may participate in regular employee plans, but they also get Supplemental Executive Retirement Plans, which Fortune 500 companies set up with unlimited tax-deferred compensation. Since more than half of executive compensation is tied to stock price, CEOs have direct incentives to cut back on worker retirement benefits to pad their balance sheets. The money saved by those cost-cutting measures goes straight back into executives’ pockets, often tax-free: Corporations may deduct unlimited amounts of executive compensation from their federal taxes so long as it’s “performance based.”

Much of this is the result of Reagan-era policies that worked to prioritize corporate profits and undo the power of unions. Under Reagan, companies began to adopt 401(k)s over pensions, shifting investment risk from employers to workers, as these plans required workers to deduct savings from their paychecks with no guarantee of future benefits. Companies have also reduced retirement benefits by converting workers’ pension assets to cash balance plans, freezing retirement plans, closing retirement plans to new hires, or terminating retirement plans altogether.

Might this get better under President-elect Donald Trump, whose economic message seemingly resonated with white-working class voters? Don’t count on it. If Trump and congressional Republicans cut the top marginal tax rate from 39.6 percent to 33 percent, Fortune 500 CEOs would stand to save $195 million when they withdraw cash from their tax-deferred retirement accounts, according to IPS.

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Saving for Retirement Is a Struggle—Unless You’re a CEO

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Trump Promised to Kill Billionaires’ Favorite Tax Loophole. Of Course His Economic Adviser Loves It.

Mother Jones

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In an economic policy speech at the Detroit Economic Club in August 2016, Donald Trump repeated a promise he’d made many times on the campaign trail: “The rich will pay their fair share.” He went on to explain that his reform “will eliminate the carried interest deduction and other special interest loopholes that have been so good for Wall Street investors, and for people like me, but unfair to American workers.”

Trump’s promises to reform taxes to aid regular Americans undoubtedly helped him win in November. But earlier this month, he announced the appointment of the members of his President’s Strategic and Policy Forum, a group of 16 business leaders who will advise him on government policy regarding economic growth and jobs. The head of that group is billionaire Stephen Schwarzman, the chairman and CEO of the Blackstone investment juggernaut. In 2016, he was ranked the 113th richest person in the world, and Blackstone, in which he holds a roughly 20 percent stake, is one of the largest private equity management firms in America. He also happens to be one of the biggest proponents of the carried-interest deduction that helps create and enrich billionaires—the very loophole Trump vowed to close during his campaign.

The carried-interest deduction works like this: People who manage the investments of others—usually private equity bosses—are often paid with a cut of the investment profits. Under the loophole, they are taxed on those earnings as if they were capital gains, not personal income, which has a much higher rate. Sometimes referred to as the “billionaire’s loophole,” Alec MacGillis for The New Yorker wrote, it “has helped private equity become one of the most lucrative sectors of the financial industry.”

As a private equity heavyweight, Blackstone has been a main beneficiary of the carried-interest deduction. In March 2007, Blackstone earned $4 billion for its managers when it went public. The initial public offering caused a public uproar because it was largely based on the favorable tax treatment of carried interest. A few months later, Schwarzman placed a call to Leo Hindery, a fellow private equity fund manager, the night before Hindery was set to testify before Congress about closing the carried-interest tax loophole. According to Hindery, Schwarzman called him “a traitor.”

Schwarzman later solidified his stance as a staunch proponent of the tax deduction in July 2010, when he compared the Obama administration’s efforts to close the loophole—Obama’s 2010 budget proposal called for changing the carried-interest tax deduction—to the Third Reich. “It’s a war,” Schwarzman said at the board meeting of an unnamed charity. “It’s like when Hitler invaded Poland in 1939.” Schwarzman was widely criticized for the comments, including by Vice President Joe Biden.

Then in August 2011, billionaire investor Warren Buffett wrote an op-ed for the New York Times in which he called for closing the carried-interest deduction, noting that thanks to the loophole, his tax rate that year had been lower than that of any of his office employees. Schwarzman went on CNBC to counter Buffett’s argument, saying he was paying a combined federal and state tax rate of 53 percent. “I’m not feeling undertaxed,” he said. (The Times pointed out that Schwarzman likely hadn’t received much carried-interest-eligible income that year, since many of the investments managed by his company were still recovering from the financial crisis.) In response to a question about Trump’s promise to close the carried-interest loophole last September, Schwarzman implied that he’d be okay with it—only as part of a general move toward a flat tax, a move that would also disproportionately benefit the uber-rich.

Schwarzman has also long been a generous Republican donor, donating more than $790,000 in the 2016 cycle to down-ballot races and PACs dedicated to maintaining a GOP legislative majority. (He did not donate to the Trump campaign.) But now, he and his compatriots will certainly have Trump’s ear: Their first meeting is set to happen at the White House in February—just weeks into the first term of President Trump.

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Trump Promised to Kill Billionaires’ Favorite Tax Loophole. Of Course His Economic Adviser Loves It.

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Private Prison Company Frees Itself From Its Old Corporate Identity

Mother Jones

The Corrections Corporation of America, the private prison company that was the subject of a recent Mother Jones investigation, has announced that it’s rebranding itself in the wake of increased scrutiny of the for-profit prison industry. CCA will now be known as CoreCivic, a “diversified government solutions company.” Don’t let the corporatespeak fool you; it will remain a private prison corporation offering “high quality corrections and detention management.”

The makeover comes after a slew of bad news for the company. After Mother Jones published its investigation, the Department of Justice announced it would phase out its use of private prisons. The Department of Homeland Security said it would reevaluate its relationship with private prisons. CCA shareholders filed a class action lawsuit against the company for allegedly failing to disclose that its practices could put its government contracts in jeopardy. Over the past six months, CCA’s stock price has fallen more than 50 percent, and the company announced a round of layoffs last month.

“Rebranding as CoreCivic is the culmination of a multi-year strategy to transform our business from largely corrections and detention services to a wider range of government solutions,” said Damon T. Hininger, the president and CEO of the business formerly known as CCA in a press release about the rebranding. “The CoreCivic name speaks to our ability to solve the tough challenges facing government at all levels and to the deep sense of service that we feel every day to help people.” The release claims the rebranding has been years in the making and was finalized before the Justice Department’s announcement in August.

The company formerly known as CCA is also adopting a “new visual identity”:

This includes a bolder, sleeker and more modern typeface, as well as a color palette intended to evoke attributes such as safety, strength, passion, stability, integrity and seriousness. The brand’s symbol, a 13-stripe American flag stylized to also represent a building, speaks to the Company’s commitment to public service, the professionalism of its employees and its expanding government real estate focus. There’s also a nod to the Company’s heritage with the right side of the symbol angled at 19.83°, representing the year that the Company was founded, and the left side of the symbol angled at 20.16° to mark the year the Company rebranded as CoreCivic.

Read more about the history of CCA and private prisons and Shane Bauer’s investigation into a CCA prison in Louisiana.

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Private Prison Company Frees Itself From Its Old Corporate Identity

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Pharma Reps Pitched Doctors on Addictive Painkillers by Spelling Out “OxyContin" in Doughnuts

Mother Jones

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In the late ’90s, sales reps from pharmaceutical giant Abbott Laboratories faced a conundrum: They wanted to sell the recently introduced painkiller OxyContin to an orthopedic surgeon, but the usual sales tactics weren’t working. They visited the office a couple times, but got the cold shoulder. They pitched him on the drug over lunch‚ but he didn’t seem interested.

When they learned the doctor had a weakness for sweets, they came up with a new plan: deliver a box of with donuts and other treats carefully arranged to spell out the word “OxyContin.” The surprise gift won over the doctor, who began prescribing OxyContin. “We are pleased that we have such a sweet start in developing a relationship with this ‘no-see’ physician,” the sales reps later wrote, “and we’re looking forward to sweet success with OxyContin!”

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The anecdote, which comes from the internal Abbott bulletin above, is part of a trove of recently unsealed court documents detailed in an investigation by health news site STAT. As the story explains, after Purdue Pharma introduced OxyContin in 1996, the company embarked on a massive sales campaign to convince doctors and patients alike on the benefits of treating pain with opioids. Since then, the opioid overdose rate has soared; many experts trace the origins of the epidemic back to Purdue Pharma’s campaign. In 2007, the company and its executives paid a $600 million fine for misleading patients, doctors, and policymakers about the drug’s addictive effects.

But the STAT investigation shows that Purdue was far from alone: Abbott Laboratories had signed on to a partnership with Purdue to promote OxyConton through a series of aggressive, often questionable sales tactics. Under the terms of the partnership, which started in 1996, at least 300 Abbott sales reps launched what they called a “crusade” to sell OxyContin. In return, Abbott received up to 30 percent of net sales. Critically, the deal specified that Abbott would be indemnified from legal costs involved in selling the drug—a move that would later save Abbott millions of dollars and lots of bad press. By 2006, Purdue Pharma claimed $400 in legal fees involving OxyContin. Meanwhile, Abbott had made $374 million in OxyContin commissions by 2002.

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In the “crusade” to sell OxyContin, Abbott sales reps were referred to as “crusaders” and “knights” and sales director Jerry Eichorn was called the “King of Pain.” (Eichorn, who signed memos as “King,” is now the national director of sales for Abbott spinoff AbbVie, which sells Vicodin.) Sales reps were instructed to highlight how the drug has “less abuse/addiction potential” than other painkillers; similar statements would later cost Purdue millions of dollars.

The court documents detailed all sorts of questionable sales strategies: Sales reps paid for take-out lunch at restaurants the doctors liked, giving their pitch in the few minutes it took to pick up the food—a move called the “Dine and Dash.” They gave surgeons bookstore coupons, and pitched the drug while waiting to pay. Top-performing reps—like the doughnut arrangers—were rewarded with prizes, from travel coupons to lottery tickets.

As the internal Abbott bulletin would put it: “All hail the Knights of the Round Table in the Royal Court of OxyContin!”

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Pharma Reps Pitched Doctors on Addictive Painkillers by Spelling Out “OxyContin" in Doughnuts

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What We Know About Violence in America’s Prisons

Mother Jones

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Read Mother Jones reporter Shane Bauer’s firsthand account of his four months spent working as a guard at a corporate-run prison in Louisiana.

Safety is an issue in all prisons, but accurate data on violence in prisons can be hard to come by. Here’s a look at what we know about physical and sexual assault in America’s prisons—and what was reported at the private prison in Louisiana where Shane Bauer worked.

Physical Assault Behind Bars

19% of all male inmates in US prisons say they’ve been physically assaulted by other inmates.
21% say they’ve been assaulted by prison staff.

Sexual Assault Behind Bars

Officials reported fewer than 8,800 incidents of rape and other sexual victimization in all American prisons and jails in 2011.
Yet between 3 percent and 9 percent of male inmates say they have been sexually assaulted behind bars, which suggests more than 180,000 current prisoners may have been victimized.
Former inmates of private state prisons are half as likely to say they have been sexually victimized by another inmate as those who were in public state prisons. However, they are nearly twice as likely to report being sexually victimized by staff.
66% of incidents of sexual misconduct by prison staff involve sexual relationships with inmates who “appeared to be willing,” according to authorities.

Women are…

7% of the total prison population
22% of all victims of inmate-on-inmate sexual victimization
33% of all victims of staff-on-inmate sexual victimization

Private vs. Public prisons

There is no current data on how violence in public prisons compares with violence in private ones. The last study released by the Department of Justice, in 2001, found that the rate of inmate-on-inmate assaults was 38 percent higher at private prisons than at public prisons.

Violence at Winn Correctional Center

While working as a guard at the Corrections Corporation of America’s Winn Correctional Center in early 2015, Shane Bauer noted 12 stabbings over two months. Yet records from Louisiana’s Department of Corrections show that Winn reported just five stabbings during the first 10 months of the year. (CCA says it reports all assaults and that the doc may have classified incidents differently.)

During those 10 months, Winn reported finding 114 inmate weapons—nearly 3 times what was found at the GEO-run Allen Correctional Center, a medium-security prison of roughly the same size.
Winn’s rate of uses of “immediate” force by staff at Winn was 40 times greater than that of the similarly sized state-run prison in Avoyelles Parish.
The rate of incidents where Winn inmates were sprayed with pepper spray or other chemical agents was 3 times the rate of such incidents at Allen and Avoyelles.

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What We Know About Violence in America’s Prisons

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Is "Fragrance" Making Us Sick?

Mother Jones

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For Joyce Miller, a 57-year-old professor of library science in upstate New York, one sniff of scented laundry detergent can trigger an asthma attack. “I feel like someone is standing on my chest,” she says. “It’s almost like a choking feeling—pressure and choking. And then the coughing starts.”

Miller is just one of countless Americans who are sensitive to “fragrance,” a cryptic category of ingredients manufacturers add to products from cleaning supplies to toiletries. This generic term encompasses thousands of combinations of chemicals that give consumer goods their odors, but the identity of those chemicals is rarely disclosed.

For decades, fragrance makers have insisted on treating their recipes as trade secrets, even as complaints about negative health effects have proliferated. A 2009 study, for example, concluded that nearly one-third of Americans were irritated by the smell of scented products on others, and 19 percent experienced headaches or breathing difficulties when exposed to air fresheners or deodorizers.

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Is "Fragrance" Making Us Sick?

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The Feds Are Now Investigating Chipotle Over That Nasty Norovirus Outbreak

Mother Jones

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Its plummeting stock price wasn’t the only dismal year-end news for Chipotle in 2015.

The once hugely popular burrito chain revealed on Wednesday that the company was also served with a grand jury subpoena last month to investigate the nasty norovirus outbreak that started at a Simi Valley, California, restaurant in August.

That outbreak caused about 100 people to suffer gastrointestinal distresswith everything from diarrhea to vomiting.

According to a company memo released on Wednesday, Chipotle said the US Attorney’s Office for the Central District of California, along with the Federal Drug Administration’s criminal investigation’s office, has requested the company “produce a broad range of documents” related to the California incident. Chipotle said it intended to fully cooperate in the probe.

News of the subpoena comes on the heels of multiple similar outbreaks all linked to restaurants in the chain around the country, including an E. coli outbreak that affected more than 50 people in the Midwest and another norovirus outbreak that sickened 80 people in Boston.

In the same company memo, Chipotle said the company’s stocks were down a staggering 30 percent in December.

“Future sales trends may be significantly influenced by further developments,” the company added.

For more on burrito safety and how to avoid potential outbreaks, check out our helpful charts here.

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The Feds Are Now Investigating Chipotle Over That Nasty Norovirus Outbreak

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Meet "Sledgehammer Shannon," the lawyer who is Uber’s worst nightmare

Mother Jones

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In early 2012, on a visit to San Francisco, Shannon Liss-Riordan went to a restaurant with some friends. Over dinner, one of her companions began to describe a new car-hailing app that had taken Silicon Valley by storm. “Have you seen this?” he asked, tapping Uber on his phone. “It’s changed my life.”

Liss-Riordan glanced at the little black cars snaking around on his screen. “He looked up at me and he knew what I was thinking,” she remembers. After all, four years earlier she had been christened “an avenging angel for workers” by the Boston Globe. “He said, ‘Don’t you dare. Do not put them out of business.'” But Liss-Riordan, a labor lawyer who has spent her career successfully fighting behemoths such as FedEx, American Airlines, and Starbucks on behalf of their workers, was way ahead of him. When she saw cars, she thought of drivers. And a lawsuit waiting to happen.

Miriam Migliazzi and Mart Klein

Four years later, Liss-Riordan is spearheading class-action lawsuits against Uber, Lyft, and nine other apps that provide on-demand services, shaking the pillars of Silicon Valley’s much-hyped sharing economy. In particular, she is challenging how these companies classify their workers. If she can convince judges that these so-called micro-entrepreneurs are in fact employees and not independent contractors, she could do serious damage to a very successful business model—Uber alone was recently valued at $51 billion—which relies on cheap labor and a creative reading of labor laws. She has made some progress in her work for drivers. Just this month, after Uber tried several tactics to shrink the class, she won a key legal victory when a judge in San Francisco found that more than 100,000 drivers can join her class action.

“These companies save massively by shifting many costs of running a business to the workers, profiting off the backs of their workers,” Liss-Riordan says with calm intensity as she sits in her Boston office, which is peppered with framed posters of Massachusetts Sen. Elizabeth Warren. The bustling block below is home to two coffee chains that Liss-Riordan has sued. If the Uber case succeeds, she tells me, “maybe that will make companies think twice about steamrolling over laws.”

After graduating from Harvard Law School in 1996, Liss-Riordan was working at a boutique labor law firm when she got a call from a waiter at a fancy Boston restaurant. He complained that his manager was keeping a portion of his tips and wondered if that was legal. Armed with a decades-old Massachusetts labor statute she had unearthed, Liss-Riordan helped him take his employer to court—and won. “This whole industry was ignoring this law,” Liss-Riordan recalls. Pretty quickly, she became the go-to expert for employees seeking to recover skimmed tips. And before she knew it, her “whole practice was representing waitstaff.”

In November 2012, she won a $14.1 million judgment for Starbucks baristas in Massachusetts. After a federal jury ordered American Airlines to pay $325,000 in lost tips to skycaps at Boston’s airport, one of the plaintiffs dubbed her “Sledgehammer Shannon.” When one of her suits caused a local pizzeria to go bankrupt, she bought it, raised wages, and renamed it The Just Crust.

Liss-Riordan estimates that she’s won or settled several hundred labor cases for bartenders, cashiers, truck drivers, and other workers in the rapidly expanding service economy. Lawyers around the country have sought her input in their labor lawsuits, including one that resulted in a $100 million payout to more than 120,000 Starbucks baristas in California. (The ruling was later overturned on appeal.) In a series of cases that began in 2005, she has won multi­million-dollar settlements for FedEx drivers who had been improperly treated as contractors and were expected to buy or lease their delivery trucks, as well as pay for their own gas.

Her Uber offensive began in late 2012, when several Boston drivers approached her, alleging that the company was keeping as much as half of their tips, which is illegal under Massachusetts law. Liss-Riordan sued and won a settlement in their favor. But while looking more closely at Uber, she confirmed the suspicion that had popped up at that dinner in San Francisco: The company’s drivers are classified as independent contractors rather than official employees, meaning that Uber can forgo paying for benefits like workers’ compensation, unemployment, and Social Security. Uber can also avoid taking responsibility for drivers’ business expenses such as fuel, vehicle costs, car insurance, and maintenance.

In August 2013, Liss-Riordan filed a class-action lawsuit in a federal court in San Francisco, where Uber is based. Her argument hinged on California law, which classifies workers as employees if their tasks are central to a business and are substantially controlled by their employer. Under that principle, the lawsuit says, Uber drivers are clearly employees, not contractors. “Uber is in the business of providing car service to customers,” notes the complaint. “Without the drivers, Uber’s business would not exist.” The suit also alleges that Uber manipulates the prices of rides by telling customers that tips are included—but then keeps a chunk of the built-in tips rather than remitting them fully to drivers. The case calls for Uber to pay back its drivers for their lost tips and expenses, plus interest.

Uber jumped into gear, bringing on lawyer Ted Boutrous, who had successfully represented Walmart before the Supreme Court in the largest employment class action in US history. Uber tried to get the case thrown out, arguing that its business is technology, not transportation. The drivers, the company contended, were independent businesses, and the Uber app was simply a “lead generation platform” for connecting them with customers.

Techspeak aside, Liss-Riordan has heard all this before. When she litigated similar cases on behalf of cleaning workers, the cleaning companies claimed they were simply connecting broom-pushing “independent franchises” with customers. When she won several landmark cases brought by exotic dancers who had been misclassified as contractors, the strip clubs argued that they were “bars where you happen to have naked women dancing,” Liss-Riordan recounts with a wry smile. “The court said, ‘No. People come to your bar because of that entertainment. Adult entertainment. That’s your business.'”

Uber’s argument is pretty similar to that of the strip clubs. “Uber is obviously a car service,” she says, and to insist otherwise is “to deny the obvious.” An Uber spokesperson wouldn’t address that characterization, but said that drivers “love being their own boss” and “use Uber on their own terms: they control their use of the app, choosing when, how and where they drive.”

Some observers have suggested creating a new job category between employee and contractor. But Liss-Riordan is tired of hearing that labor laws should adapt to accommodate upstart tech companies, not the other way around: “Why should we tear apart laws that have been put in place over decades to help a $50 billion company like Uber at the expense of workers who are trying to pay their rent and feed their families?”

For the most part, courts have sided with her. Last March, a federal court in San Francisco denied Uber’s attempt to quash the lawsuit, calling the company’s reasoning “fatally flawed” (and even citing French philosopher Michel Foucault to make its point). In September, the same court handed Liss-Riordan and her clients a major victory by allowing the case to go forward as a class action. The judge in the Lyft case has called the company’s argument—nearly identical to Uber’s—”obviously wrong.” Last July, the cleaning startup HomeJoy shut down, implying that a worker classification lawsuit filed by Liss-Riordan was a key reason.

Meanwhile, other sharing-economy startups are changing the way they do business. The grocery app Instacart and the shipping app Shyp—Liss-Riordan has cases pending against both—have announced they will start converting contractors to full employees. Liss-Riordan says that’s her ultimate goal: to protect workers in the new economy, not to kill the innovation behind their jobs. “This is not going to put the Ubers of the world out of business,” she says.

One of her opponents has played a more creative offense. Last fall, the laundry-delivery app Washio convinced a judge that Liss-Riordan had no right to practice law in California. Liss-Riordan easily could have relied on a local lawyer to head the case, but instead she signed up to take the California bar exam in February. “Their plan kind of backfired,” she says. “I expect they’ll be seeing more of me, rather than less.”

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Meet "Sledgehammer Shannon," the lawyer who is Uber’s worst nightmare

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Volkswagen CEO Quits As Pollution-Cheating Scandal Envelops Automaker

Mother Jones

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On Wednesday morning, Volkswagen CEO Martin Winterkorn announced that he will be stepping down from his position as chief of the German automaker. His departure comes in the wake of a scandal that forced the car company to admit it violated US law by using software to cheat on pollution tests. Winterkorn has been the company’s CEO since 2007.

“I am stunned that misconduct on such a scale was possible in the Volkswagen Group,” Winterkorn said in an announcement. He maintains he was not aware of the piece of software that allowed cars to evade emissions controls.

This is a breaking news post. We will update as more information becomes available.

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Volkswagen CEO Quits As Pollution-Cheating Scandal Envelops Automaker

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