State Department Au Pair Program At Risk

More than ninety old Pairs are using US courts to challenge the Old Pair program in a type of legal action that allows them to band together a class action. They claim that fifteen private agencies engaged in a wage fixing conspiracy, colluding to keep their compensation below the minimum wage, and the old Pairs have cleared a hurdle, a Colorado federal judge has certified the class allowing the lawsuit to proceed. Joining me is Josh Idolson, Bloomberg Business Week reporter Josh

tell us about the program. Thanks for having me so. This is a program under which young foreign workers under come to the US. They provide live in child care. They work on paper. It's supposed to be no more than forty five hours a week. It is part of the j one so called cultural exchange visa program overseen by the State Department, And if you listen to the sponsor agencies, these private companies that oversee the program as certified by the State Department tell it. They would say,

this is not primarily a work program. It's a give and take where someone welcomes the stranger into their home and that stranger helps them with the kids and gets treated as part of the family. So it's build as a cultural exchange program, not a labor program. What do

these old pairs say about that billing versus reality? Well, something I heard from multiple plaintiffs as well as attorneys is this is something that's marketed to the o pairs as the best year of your life and a cultural opportunity, and marketed to the families who are hosting them as cheap childcare and a chance to employ someone for a lot less money than you would have to pay finding

someone some other way in the US. So the plaintiffs are suing these fifteen private agencies that basically control the old pair labor market tell us about their claims and their use of the antitrust law. So they allege that there is a wage fixing conspiracy where these agencies, who win the lawsuit was filed, were the only agencies authorized

by the State Department to administer the program. Together set over rate as what will be presented to the O pairs as the most they can make, and presented to the families is what all O pairs get paid aid, And among the allegations are that OH pairs were falsely told not just that this was the government's rate for what they should be paid exactly, but that they could be deported if they tried to get some other rate.

Among the evidence is allegedly conversations of an investigator had with officials at the agencies in which they again allegedly confirmed that there's an agreement among the agencies to get everybody paying this rate. Now, the agencies say this is a ridiculous allegation because it's really the government that said

this is the amount of pairs will get paid. A magistrate judge, however, said that was a ridiculous claim to make because the alleged government document really is just reminding people of the floor on what's allowed under wage laws. So this lawsuit is one of many controversies surrounding these j vs, as which Donald Trump, when he was a candidate, pledge to replace with an inner city youth jobs program. Tell me about some of the other controversies. That's right.

We've seen over the past several years, strikes actually by some j one Summer travel student work participants. We saw one among people working at Hershey's in Pennsylvania. We saw people working for a McDonald's franchise e go on strike, alleging that they were being made to work more than twenty hours consecutively and being charged exorbitant rates to live in a basement controlled by the franchise e. So cultural exchange.

I talked to some of those strikers years ago, and they said they did get a cultural exchange, coming together with these other students from around the world and going on strike and defying this company. But it was not the cultural exchange that was advertised, certainly not. What is the status of the j VS is well, there have been rumors that there will be major changes to these programs under President Trump. This is an area where you have heard concerns from the left and from the right,

though certainly phrased somewhat differently. But we don't really know what, if any change there will be to this program under this administration, and the State Department did not wish to speak at length about it. How big a hurdle was it for the planeffs in this case the O pairs to get class action certification. Well, class certification, as in

any case, is a very big deal. And prior to that, the fact that this case survived motion to dismiss, and that the magistrate judge and the federal judge, who largely embraced the magistrate judges ruling, saw these as allegations that should proceed, and in fact said that if what is being alleged is true, there is what another judge has referred to as the smoking gun in a price fixing case,

actual explicit conspiracy to set prices of people's labor. We often think of antitrust as all about prices for consumers, but it's equally about wages for workers. And what's the likelihood now that there might be a settlement of this case, Well, you know better than I do. At the point that there's been a class action certification hurdle crossed. If you are providing counsel as a defense attorney, that can change

your calculation. We are waiting for the end of the week for the deadline for the defendants to formally announced that they would seek federal Appeals Court consideration of that motion on class certification. But I imagine there's some calculation going on at the moment. Thanks Josh, it's it's really a fascinating area. And oh, Paris have come up so much in the past, it's not surprising me as a lawsuit. That's Josh Idlesoon Bloomberg Business Week reporter. Harvey Weinstein faces

a wave of sexual assault claim stretching back to the seventies. Now, Weinstein and his company are facing a civil rights lawsuit by the state of New York. The stakes are high, including sale of the troubled studio. New York Attorney General Eric Schneiderman said a four month investigation revealed a pervasive pattern of sexual harassment, intimidation, and discrimination that was flagrant. We have never seen anything as despicable as what we've seen here. We made it very clear that our three

principles are very simple. Um victims and employees have to be treated fairly going forward. We don't think that is too much to ask of anyone who wants to continue the work of the Weinstein Company. Or purchase its assets, and that last part is key. Schneiderman said an offer to buy Weinstein's film and TV company is not acceptable

in its current form. Weinstein's attorney, Ben Braffman said that many of the allegations against Weinstein are without merit, and while his behavior was not without fault, there certainly was no criminality. My guest is an expert in this area. Jennifer and Drew Back, a visiting scholar at Harvard Law School.

Jennifer tell us more about the allegations in the lawsuit. Well, the lawsuit alleges a number of civil rights violations and um AT pattern and practice of systemically discriminating against women and also enabling Harvey Weinstein to sexually assault UH and UH engage in violent behavior with either employees or UM women who were potential clients of his Jennifer, Yeah, it's

just a it's a civil rights lawsuit. Basically, we've seen lawsuits by employees against companies for sexual harassment and discrimination, civil rights violations. Is it unusual to have a state sewer company. It's not unusual in the sense that you get UM departments of Fair Employment and housing. Is that the department in California, and you can have a variety of state agencies UM engaging in lawsuits on behalf of

aggrieved employees. UM. But typically if there are employees who can come forward, they do and they don't go through UM like the of typically if they have the ability to sue privately on their own UM. Typically because many of the state UH agencies don't get as much in prosecuting the lawsuits. UM. So this one is a little

bit unusual in that sense. But UM. I also note I've I've read the lawsuit, and I note that UM the state is suing not only for violations of these laws, but for civil penalties to the State of New York, for example, for a hundred thousand dollars for each violation UM of particular New York statutes two hundred fifty thousand per a violation of another one. So that can add

up to a lot of money. So there, so the Attorney General's office is putting the State of New York in as UM as a sort of a we're scipient of assets UM from this company and from the Weinstein brothers. Weinstein is trying to sell the studio to Maria contraras Sweet, who was the head of a small business administration for three years under President Obama. This lawsuit was filed electronically on Sunday, before the deal was set to close. Why

did the a G want to block that deal? It's not so much that the a G wants to block the deal. The a G could have blocked the deal arguably. UM, So, what what the AG is doing is putting New York's claims on record file and alerting the buyers that the State of New York is not agreeable to the sale under the sales particular current terms. Now there's some controversy over what those terms are in some dispute with the BIO is claiming that they have a fund for victims.

But and at first I was sympathetic because if the sale doesn't go through, there's a potential for bankruptcy, in which everyone loves it. However, I think the Attorney General UM maybe taking some short term hostility for some long term gain for the state and everyone else, because um,

the Attorney General is pointing out some problems. For example, um, what has been specified as a fund, it's really a litigation fund, which could go to pay attorney such as Gloria Alred um, who's representing some of the women who have been agreed, And what the a G. S Office is specifying is that there would be a victim's fund

to make sure that the victims are compensated for their injuries. UM. There's also some question as to whether or not the perpetrators who engaged in cover ups and who facilitated Harvey Weinstein's egregious behavior, it looks like they were going to continue on with the company once it was purchased, and that's part of the Attorney General's problem with the sale.

And it's not to say that these people wouldn't clean up their act under you know, sort of oversight by the predominantly female board of directors, but to allow people who have engaged in such egregious cover up behavior is pretty stocking. UM. And so the Attorney General is on behalf the people of New York UH stating some objection to that, and I think understandably so. And in this era of hashtag me too and times up, UM, I think it's important to draw attention to this issue. Jennifer.

We have just about thirty seconds here. The Equal Employment Opportunity Commission hasn't seen a spike in sexual harassment claims despite the fallout from the Weinstein scandal and the advent of me too. Uh, the me too movement? Is there any reason you see for that? In about thirty seconds only, Uh,

it's it's possible that companies are being proactive. I hope that's the answer, and and are taking this in house and are resolving these issues, um in a way that doesn't require people to go to outside agencies such as the eo C. Thank you so much for being here and your insights. That's Jennifer and Drove Back, a visiting scholar at Harvard Law School. Thanks for listening to the

Bloomberg Law Podcast. You can subscribe and listen to the show on Apple Podcasts, SoundCloud, and on Bloomberg dot com slash podcast. I'm June Brosso. This is Bloomberg