National News

Low-wage workers stuck with non-compete agreements

Marketplace - American Public Media - Tue, 2014-11-04 02:00

If you’re a CEO or a senior manager, you may have signed a non-compete agreement, which would limit or restrict your ability to work at a competing company for a pre-determined period of time after leaving your job. 

But in the last couple of decades, an increasing number of American workers are being asked to sign such deals, including service-sector and low-wage employees.

“We’ve seen them expand to jobs like yoga instructors and camp counselors,” says Orly Lobel, a professor at the University of San Diego School of Law and author of the book “Talent Wants To Be Free,” which addresses the subject.

Take the case of Danny Davies, who worked at a Jimmy John’s sandwich shop. He says when he got hired, he was required to sign a non-compete agreement that limited his ability to work at any other sandwich restaurant.

“They ask everyone to sign it when you get hired,” says Davies, who hasn’t worked at Jimmy Johns since February 2014. And while neither Davies nor his colleagues initially took the agreements seriously, Davies says their views changed once they considered leaving the sandwich shop and finding a job elsewhere.

"I’ve known people that have done this: they start working somewhere…And keep this job secret, just in case,” says Davies, alluding to the concern that the franchise owner of the sandwich shop might pursue legal action against them.

There have been several stories of employees who have been restricted from taking other jobs because of non-compete agreements—from a children’s camp counselor to a physicist. Jimmy John’s is currently facing a class-action lawsuit over its non-compete agreements.

One of the rationales for requiring the non-competes from lower-wage workers is that they may have received a lot of training in their jobs, and if they leave to work at a competing company, that may be an unfair advantage. But Lobel says non-compete agreements have spread beyond even that thinking.

"I teach cases about welders who receive so little training, but they still can’t move to a competitor,” says Lobel.

Lobel says part of the reason for the expansion of these agreements is a shift in business culture. “Today, it’s really human capital that is what creates value," Lobel says. "And companies have this impulse that the way they’re going to keep people is by cutting off their outside opportunities.”

“Non-compete law is essentially state law, and it varies somewhat significantly among states,” says Michael Rosen, a partner at the Boston law firm Foley Hoag LLP. 

Rosen specializes in non-compete agreements in Massachusetts, which has a relatively permissive non-compete law. Meanwhile, California is one of the most restrictive states. It does not recognize the agreements except for owners of businesses. In the summer of 2014, Massachusetts’ state legislature considered amending non-compete rules, but the initiative failed.

Rosen says there is a place for non-compete agreements in business even for low-level workers, such as those at a high-tech firm with access to confidential code.

“Generally, the legitimate interests that would justify enforcement are…protection of trade secrets or confidential information, and protection of good will,” Rosen says. “But in terms of low-skill areas where confidential information and good will are really not in jeopardy, I think it’s difficult to justify asking folks to sign a non-compete."

Dell reboots as a private company

Marketplace - American Public Media - Tue, 2014-11-04 02:00

A year ago, tech CEO Michael Dell paid almost $25 billion for a computer maker … called Dell. He bought enough shares to take the company he founded private, meaning no quarterly earnings reports. At the Dell World conference in Austin, he’ll show off a reboot-in-progress. 

One area where Dell wants to grow is data services: Helping corporate clients manage “the cloud.”

There are pitfalls to a cloud strategy, says James Kelleher, an analyst with Argus Research. "Number one, it’s not enough to announce that you’re a cloud company," he says.

Simply providing software tools isn't enough either, he says. As companies like IBM have learned, "you need to actually provide the cloud facility." Competitors like Amazon have had early success with that strategy. 

Meanwhile, Dell can finance its transition by selling more computers. Tablets have eaten into traditional PC sales, but for now, Dell’s are strong

"That’s really the million-dollar question here, for every technology company," says Matt Eastwood, an analyst with the tech consultancy IDC. "How quickly will that traditional profit pool begin to dry up, and how quickly will those new profit pools develop and emerge?"

As a private company, Dell won’t have to worry about the stock market freaking out if it doesn’t show results every quarter.

Priceline's mission: Be bold

Marketplace - American Public Media - Tue, 2014-11-04 02:00

William Shatner has been Priceline’s spokesman for years, but the company is not following the script of Shatner’s Star Trek days. 

“It’s not just William Shatner, but the whole company has to boldly go where no travel company has gone before," says Gary Leff, who writes the viewfromthewing.com blog. "They haven’t quite figured out how to teleport themselves into the future of online travel."

Leff says Priceline's third quarter earnings report will give a glimpse of the success of the company's strategy of growth through the acquisition of other companies.  

Priceline seeks out new companies to buy, like the dinner reservation website Open Table.

Basically, Priceline is trying to be your one stop shop for everything; your plane ticket, hotel and restaurant reservation. 

“Priceline’s really trying to expand how much of the wallet it can capture from the consumers and keep them on a Priceline-branded website," says Adam Fleck, director of consumer equity research at Morningstar.

Perhaps not a bold strategy, but enterprising. 

 

New Attorney General Not Likely Until 2015

NPR News - Mon, 2014-11-03 15:39

Though a short list of candidates to replace current Attorney General Eric Holder is circulating, a nomination and confirmation is increasingly unlikely until after an expected shift in Congress.

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Invasive Bug Prompts Quarantine In Pennsylvania Townships

NPR News - Mon, 2014-11-03 15:37

The spotted lanternfly has officially arrived in the U.S., and leaders in Pennsylvania are hoping it won't be staying long.

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Supreme Court Case Tests Status Of Jerusalem

NPR News - Mon, 2014-11-03 12:59

Can U.S. citizens born in Jerusalem list Israel as their place of birth on their passports? A 12-year-old boy is contesting the U.S. position that no one has sovereignty over the city.

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Armor For Batteries Could Protect Hungry Kids From Harm

NPR News - Mon, 2014-11-03 12:20

Thousands of children swallow tiny batteries used in watches, calculators and toys each year. A team from MIT and Harvard is working on a pressure-sensitive insulating shield to prevent damage.

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The unexpected budget lines

Marketplace - American Public Media - Mon, 2014-11-03 11:45
To mark the turn of this millennium, developers in Britain once spent something close to $1 billion to create a huge dome outside London. When the dome’s business model crumbled, about $160 million in government money had to be put into the bubble-shaped venue to keep it solvent. That is a lot of money to spend on infrastructure for a New Year’s Eve party, and many Britons thought it was a boondoggle.    That said, at least it was money spent for something that was supposed to be fun.   The federal government in the U.S. is about to spend extra money next year, but the word “fun” has absolutely nothing to do with it. Experts say the federal budget is likely to be punctuated with new, previously unexpected spending to stop the terrible Ebola virus.   With these mid-term elections, the expectation is that Republicans will emerge with more sway in Congress. Following conservative principles, this might suggest that that government budgets would be in for some new trimming.    The threat of Ebola could push things the other way. Stan Collender watches the federal budget with the practiced eye that some handicappers train on horses. Collender is now a senior VP at Qorvis MSLGroup, but in another life he was a staffer on both the House and Senate budget committees.   He points out that after cuts in recent years for public health programs - including new vaccines for infectious diseases - the National Institutes of Health will get more money. So will the Centers for Disease Control. But it won’t stop there. “Transportation, Homeland Security, Education, Health and Human Services are all going to find some way of being involved in the Ebola fight,” Collender said. And don’t forget the Department of Defense, which has already deployed soldiers in West Africa to help fight the disease closer to the outbreak. “I expect there will be pockets of Ebola money all over the domestic side of the budget just to deal with it in every way possible.”   In a perverse way, this extra spending could produce a boost to the U.S. economy. First, there is the new spending itself. Gross Domestic Product counts money that changes hands and money will change hands, from taxpayer to the anti-Ebola fight. And if the spending actually works, there will also be an incalculable multiplier effect. Imagine the human and economic benefits if these augmented government programs keep people from getting sick.   It pains me to have to type the word “if” in the middle of that sentence.

It Turns Out That Fighting Polio Is Good Training To Fight Ebola

NPR News - Mon, 2014-11-03 11:20

Nigeria knows how to beat back polio. And that's helped in the battle against Ebola. But other West African countries are struggling to beat the deadly virus — and neglecting anti-polio efforts.

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Holy Goats! They're Kind Of A Big Deal In One Nepali Town

NPR News - Mon, 2014-11-03 11:07

The people of Nepal like goat dishes. They like goat sacrifices. But not all local goats meet such a fate. In one town, goats do as they please. After all, they're divine!

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Why Taylor Swift broke up with Spotify

Marketplace - American Public Media - Mon, 2014-11-03 11:00

Music superstar Taylor Swift and her label Big Machine Music have pulled her catalog of songs from the music streaming service Spotify.

Swift’s single “Shake It Off” is currently the most played song on the radio, according to Billboard. And Spotify says Swift’s music was being streamed by 16 million of its users in the past month. The service has 10 million subscribers and and 40 million active users globally, according to Spotify.

Spotify made the announcement on its blog, in a cheeky note that asked Swift to come back. 

Earlier this year, Swift wrote an op-ed in the Wall Street Journal, saying in part that artists should have more control over the price value of their albums. Rolling Stone reported Monday that the label and the artist did not negotiate with Spotify prior to pulling the songs off the service, and that the move may be tied to the label trying to increase its value ahead of a possible sale. 

The clout that Taylor Swift and her label have over Spotify is a sign of an ever-shifting music industry landscape. Downloads have flatlined, album sales are down and streaming is up. But streaming services are dependent on big-name acts, says Karen Allen, a digital music consultant. 

“The problem is that if you don’t have popular music on a streaming service that you’re asking people to pay for, then they don’t want to use it,” Allen says. “Because the promise of a streaming service is… it’s unlimited access to everything. When you don’t have a huge artist, it’s less attractive.” 

On mobile phones, streaming audio is the second most popular thing to do, after streaming videos, says Roger Entner, a telecom analyst and founder of Recon Analytics. But streaming services, such as Spotify and Pandora, face a paradoxical problem. 

“Consumers aren’t willing to pay that much for songs any more,” says Entner. “They’re not willing to pay say more than $10 a month, if even that.”

There’s an expectation for online songs to be free, says Allen. “That has been a challenge for all streaming services, to find that magic offering for users, where it’s worth paying for and they’re also getting value.”

Spotify charges $5 or $10 a month. Or, it's free if you don’t mind ads. But the company pays artists, on average, just $.007 per stream. That’s despite the fact that the music industry has huge leverage over Spotify.

“There’s only three major labels left on the planet. They have tremendous leverage," says Casey Rae, vice president of policy and education at the Future of Music Coalition, which represents the interests of musical artists. 

“So, I think that in some instances you’ll see these superstars using their clout as leverage, and sometimes that might mean taking your toys and going home,” says Rae. But smaller artists don’t have that luxury and have to go where the fans are, Rae says, which increasingly is on online streaming music services. 

French ad giant Publicis to buy digital firm Sapient

Marketplace - American Public Media - Mon, 2014-11-03 11:00

As long as there have been ad agencies, there have been ad agency acquisitions — like the attempt to buy Don Draper’s firm on "Mad Men." Here's how the scene went:

"PPL is being sold and us along with it," Don Draper told partner Bert Cooper. "Oh," Cooper replied. 

"So you knew about this," said Draper. "No," said Cooper. "But it makes sense." 

Agency acquisitions make sense in part because they let companies buy expertise.

"When I was working in the industry, what we saw was advertising agencies buying smaller companies like direct marketing companies," says Kim Sheehan, a communications professor at the University of Oregon who worked in advertising in the 1980s. "What I think we're seeing with the Sapient purchase is kind of the same thing."

As one of the largest stand-alone digital agencies in the United States, Sapient has expertise in the digital realm, where it makes websites, iPad apps and viral online campaigns.  Its location in the United States is also a selling point. 

North America is the biggest single advertising market, according to Noah Elkin, executive editor at market research company eMarketer. "And within that market the fastest growing segment is digital," he says.

Publicis is also increasing its own size for its own sake. "The name of the game in the ad business is scale," says Elkin. 

Publicis has acquired a number of other agencies recently, and earlier this year attempted a merger with Omnicom, the second-largest advertising holding company. 

Sheer size helps when you are, for example, negotiating ad rates with Google or Facebook. "Because you’re buying in such a larger bulk, that enables you to get better terms," says Elkin. 

But does it justify the $3.7 billion price tag? 

"[The] Skepticism that I have around the deal is not just the price paid, which is incredibly high, but the issue of opportunity cost," says Brian Wieser, senior analyst at Pivotal Research.

Wieser thinks instead of buying yet another agency, Publicis should have considered investing in the digital properties it already owns.

CORRECTION: A previous version of this story misspelled Sapient's name in the headline. The text has been corrected.

French ad giant Publicis to buy digital firm Sapiant

Marketplace - American Public Media - Mon, 2014-11-03 11:00

As long as there have been ad agencies, there have been ad agency acquisitions — like the attempt to buy Don Draper’s firm on "Mad Men." Here's how the scene went:

"PPL is being sold and us along with it," Don Draper told partner Bert Cooper. "Oh," Cooper replied. 

"So you knew about this," said Draper. "No," said Cooper. "But it makes sense." 

Agency acquisitions make sense in part because they let companies buy expertise.

"When I was working in the industry, what we saw was advertising agencies buying smaller companies like direct marketing companies," says Kim Sheehan, a communications professor at the University of Oregon who worked in advertising in the 1980s. "What I think we're seeing with the Sapient purchase is kind of the same thing."

As one of the largest stand-alone digital agencies in the United States, Sapient has expertise in the digital realm, where it makes websites, iPad apps and viral online campaigns.  Its location in the United States is also a selling point. 

North America is the biggest single advertising market, according to Noah Elkin, executive editor at market research company eMarketer. "And within that market the fastest growing segment is digital," he says.

Publicis is also increasing its own size for its own sake. "The name of the game in the ad business is scale," says Elkin. 

Publicis has acquired a number of other agencies recently, and earlier this year attempted a merger with Omnicom, the second-largest advertising holding company. 

Sheer size helps when you are, for example, negotiating ad rates with Google or Facebook. "Because you’re buying in such a larger bulk, that enables you to get better terms," says Elkin. 

But does it justify the $3.7 billion price tag? 

"[The] Skepticism that I have around the deal is not just the price paid, which is incredibly high, but the issue of opportunity cost," says Brian Wieser, senior analyst at Pivotal Research.

Wieser thinks instead of buying yet another agency, Publicis should have considered investing in the digital properties it already owns.

National parks consider adding Wi-Fi

Marketplace - American Public Media - Mon, 2014-11-03 11:00

We've all been there – you're at the national park and want to take a selfie with your favorite sulfur cauldron. But tragedy strikes when you can't upload it to your Instagram, because you don't have Wi-Fi. 

Parks service officials are currently asking the question, "do national parks need Wi-Fi?"

They are considering a $34 million plan to run fiber optic cable through Grand Teton National Park into Yellowstone.

If ever there was a time to embrace your inner-Luddite, now might be that time.

Cruise ship comeback still tied up in port

Marketplace - American Public Media - Mon, 2014-11-03 11:00

It’s been a pretty rough couple of years for the cruise industry.

First, there was the global recession. As if that wasn't enough, the Costa Concordia ran aground off the coast of Italy. And finally, let’s not forget the handful of other high profile disasters and the image of cruise ships stranded at sea plastered all over cable news.

Yet, despite all this, the cruise industry is as hopeful as ever.  Bob Sharak is president of his eponymous travel consulting company.

“The cruise industry has proven to be continually popular and resilient after a little bit of a tough period in the last few years," says Sharak, who also spent 20 years with the Cruise Lines International Association. “You’re seeing full ships, high occupancies. But you’re also seeing customers coming from not just North America, but from Europe, Asia and a lot of other emerging markets.”

Technically he’s right about the industry's growth.

In 2012, 10.6 million Americans took a cruise, a number that inched up to 10.9 million last year. And, yes, as Sharak points out, cruising is becoming more popular in other parts of the world.

But others say that growth is too slow.

“There’s an expectation that it’s gotta, gotta get better and since that didn’t happen this year, it should happen next year," says Maggie Rauch, an analyst with PhoCusWight, the travel industry research group behind those numbers. “Some of the optimism that you might be hearing is optimism that always exists this time of year for the coming year. Things are going to improve next year. Kind of like when your team doesn’t make the playoffs.”

Rauch said the cruise industry is having a hard time increasing its customer base.

Even more than hotels or airlines, cruising relies heavily on repeat business, she said.

“There’s a group of people that just take cruises ever year, do it again and again," Rauch said. "And while obviously the cruise lines welcome their business, in order to grow they're always looking at 'how can we get people who haven’t taken a cruise before to do so for the first time?'”

So far this year’s been without major incidents meaning in the industry might be able to get more folks on board.

Whatever happens election day, it's Yellen's economy

Marketplace - American Public Media - Mon, 2014-11-03 11:00

The midterm elections are Tuesday, and come Wednesday morning President Obama could wake up to a vastly different political landscape. One thing that will not change is the face of the Federal Reserve, Janet Yellen. She has been running the Fed for nine months to the day.

Monday also happened to be the day she sat down with President Obama for their first face to face meeting since she took over the nation’s money supply.

Historically, these face to face meetings happen for one of two reasons; either the Fed chairman wants to brief the president on a big change in policy or — and this is the more likely scenario for today’s meeting — Yellen will update the president on the state of the U.S. economy.

“She’s going over to the president to give her assessment of the economy,” says  NYU professor of economics Mark Gertler. “I doubt she’s going over to talk about what she would like Obama to do.”

So what does the economy look like according to Janet Yellen? Based on her comments and Fed policy under her tenure, you could say she sees an economy that’s improving but still struggling to lower unemployment and stimulate wage growth.

“I think the key thing is her signaling of concern for workers, wages and inequality,” says Gerald Epstein, chairman of the economics department at the University of Massachusetts Amherst.

Yellen’s recent speech on income inequality could be a sign that as Fed chairman, she will be looking especially closely at unemployment numbers when making monetary policy decisions.  

“Now we normally think of the Fed as being the institutional shadow of the Fed chair,” says Stanford financial historian Peter Conti-Brown. Think about the way people refer to the “Volcker Fed” or the “Greenspan Fed,” or they might say things like, “Bernanke bailed out the banks.”

But in reality, the Fed is more like the Supreme Court. Its legal authority rests not in a single chairman but in the board of governors and the presidents of the reserve banks. Together they vote on policy. “Fed chairs, depending on their leadership style, either run roughshod over that committee structure, or they embrace that committee structure,” says Conti-Brown.

Yellen, who unlike any previous Fed chairman, has served three terms on those committees, has embraced the committee structure. And while she has been more outspoken than former chairmen on issues like income inequality, her actions have not deviated drastically from her predecessors.  

'Car Talk' Co-Host Tom Magliozzi Dies At 77

NPR News - Mon, 2014-11-03 10:31

As half of the wisecracking NPR radio show, Tom Magliozzi made us laugh at our car problems. He and his brother, Ray, also taught us how things work.

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Tom Magliozzi, Popular Co-Host Of NPR's 'Car Talk,' Dies At 77

NPR News - Mon, 2014-11-03 10:30

Tom Magliozzi bantered weekly with his brother, Ray, on the public radio show. They joked, laughed and sometimes even gave good advice to listeners with car troubles. Tom Magliozzi was 77 years old.

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HBO's 'Olive Kitteridge' May Be The Best Depiction Of Marriage On TV

NPR News - Mon, 2014-11-03 10:22

HBO's miniseries, starring Frances McDormand as a sharp-tongued wife, concludes tonight. NPR TV critic Eric Deggans calls it an unsparing, detailed look at the most quietly troubled marriage on TV.

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Martha Stewart on life, 'lifestyle culture' and her brand

Marketplace - American Public Media - Mon, 2014-11-03 10:20

Martha Stewart does not mince words when it comes to the size of her business:

"I think you can fairly say, I spawned or laid an egg that has turned into a lifestyle industry," Stewart said in an interview with Marketplace's Kai Ryssdal.

Since "Entertaining," her first book, came out in 1982, Stewart's brand have swelled into a catch-all for planning parties, getting married, serving tofu french fries, and drawing fizzy baths. There's Martha Stewart Living, Martha Stewart Weddings, Martha Stewart's Cooking School on PBS, Martha Live, a collection at Macy's, a collection at Petsmart, a Martha Stewart at Home depot and more. There's a Martha Stewart competition for start-up "American Made" products.

  Congratulations to the 2014 American Made Award Winners! http://t.co/ibSw685ikz #americanmadeawards #marthastewart pic.twitter.com/rBUiaURY7p — American Made (@AmericanMadeMSL) October 17, 2014

There is, in fact, Martha Stewart for just about everything:

Here are some highlights from the conversation, which will air later this afternoon on Marketplace:

On godmother-ing a culture

Ryssdal: If I called you, maybe not the grandmother, but maybe the godmother of the lifestyle culture in this country, would you be offended?

Stewart: Absolutely not. I would be thrilled! I think godmother is good because it can be of any age.

Ryssdal: Yeah, it’s age neutral, right?

Stewart: Yes, it is. It really is.

On the marketing of "lifestyle" products

Stewart: There are two kinds of people... There are the dreamers who go and buy, and there are the doers who go and make. And I’ve always recognized that. So the dreamers are what support our company, because they will buy the product that they could make if they wanted to, had time to, or were so inclined to. Or, they can dream about it and figure out how to make it themselves... If you look back at our first presentations to investors, it was about dreamers and doers and guess what? It’s turned out to be exactly that.

Martha Stewart (R), the doyenne of modern living through her Martha Stewart Living empire, serves brioche with scrambled eggs, along with New York Stock Exchange President William Johnson, to celebrate her listing on the NYSE 19 October 1999.Henny Ray Abrams/AFP/Getty Images

On “American Made”

For the past three years, Stewart has headed up an annual contest called “American Made.” This year, more than 3,259 makers and entrepreneurs applied to win seed money and promotion to start their own business in the categories of Food, Crafts, Style and Design. The winners will meet in New York later this week, where they will be presented to attendees at the “American Made Summit.” Stewart says she is hoping to bring manufacturing back to the U.S., even in small ways. One of her favorite projects this year was led by “American Made” finalist Pashon Murray who started a composting collective in Detroit called fittingly “Detroit Dirt.”

“Compost is a national trend right now,” Stewart said. “If we could put it on a Twitter meter right now composting would be pretty high up there.”

On prison and her company

Ryssdal: There is a question to be asked about you and the company and the brand that is you - and it has to do with your conviction for filing false statements in an insider trading case. About ten years ago you went to prison, you were barred from a role in your company for five years. You have since obviously returned. 

Stewart: Only barred from an executive role in the company.

Ryssdal: Yes, an executive role, that is true. And you have returned now as non-executive chairman, or chairwoman I suppose. The question is: What does it feel like for a person and a company that is so wrapped up in each other, what does it feel like for you to have that taken away?

Stewart: Well, it was never really taken away. It was delayed for a period of time. So it was never… You can’t really separate the person from the brand. 

Martha Stewart made headlines for insider trading in 2004. Her name still spikes on Google every holiday season.

On Steven Spielberg, her next door neighbor

Stewart: [Steven Spielberg] actually lives across the street from me so I bump into them sometimes. But he said to me, “Martha, I just want you to know what I think. I think that you have elevated the job of the homemaker, the homeowner, the homemaker. You’ve elevated that job from something that we all thought was drudge, drudgery to something much more of an art form.”

That was, to me, the highest compliment that anybody has paid me. Because it is, it should be. You should feel good about making your home nicer for your family and your friends.  You should feel great about cooking a good dinner and making a dress for a granddaughter, creating a beautiful birthday party. It’s all part of life.

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