Tag: Cops and Courts

Latest Headlines

Texas Roadhouse stock dives 6% on downgrades; Amazon gets U.K.’s OK to test drones, possibly bringing service there before U.S.; and KFC food porn gets a video star

A news summary focused on 10 big employers; updated 4:39 p.m.

TEXAS ROADHOUSE shares tumbled $2.87 a share, or 5.9%, to close at $46.11 after Jefferies and two other investments firms downgraded the stock. They traded as low as $45.45 during the session; more than three million shares changed hands, five times average volume. The steakhouse chain’s shares have been on a tear since February; even with today’s decline, they’re up 22% from a year ago vs. a much smaller 4.3% in the S&P 500 index.

AMAZON‘s plans to deliver packages by small, unmanned drones took another step forward when the British government gave the retailer permission to start trials over rural and urban areas — a move that could bring the service to the U.K. ahead of the U.S. The U.K. Civil Aviation Authority’s permission means Amazon can explore three key innovations for delivering packages weighing up to 5 lbs.: beyond line-of-sight operations; testing sensor performance to make sure drones can identify and avoid obstacles, and flights where one person operates multiple highly-automated drones. “This announcement,” said Paul Misener, Amazon’s vice president of global innovation policy and communications, “strengthens our partnership with the U.K. and brings Amazon closer to our goal of using drones to safely deliver parcels in 30 minutes to customers in the UK and elsewhere around the world” (press release). Funny video, top, shows how Prime Air could work.

The move puts pressure on the U.S. Federal Aviation Administration, which recently rebuffed requests by Amazon, Google and other drone makers to advance their plans. The tech giants and other manufacturers have aggressively lobbied the FAA to authorize the devices to significantly reduce costs to transport goods by UPS and FedEx, freight and trucks (New York Times). That has big implications for Louisville, where UPS employs more than 22,000 workers at its Louisville International Airport hub, making the shipper the city’s single-biggest private employer. Amazon itself employs 6,000 at two Louisville area distribution centers. More news about the U.K. plan.

Also yesterday, Amazon launched its Prime membership service in one of the world’s biggest markets: India (TechCrunch).

Pepper robot
Pepper in action.

PIZZA HUT: In the U.K.’s Ashford, the newly refurbished Pizza Hut has reopened with a contemporary new cocktail bar and full drinks menu, as part of a nationwide drive to freshen all the chain’s stores with a more modern look. The remodeling cost about $1 million, and all workers have been trained in cocktail making (Kent and Sussex Courier). The Japanese company that’s leasing robots to Pizza Huts across Asia is expanding the program to sell insurance in Japan. The robots, dubbed Pepper, greet customers and take orders; they’re leased for $836 a month in a service managed by iPhone manufacturer Foxconn (Daily Mail).

But in the U.S., don’t worry: Pizza Hut is still hiring humans. In San Diego, shift manager applicants are asked: “Do you have a friendly, outgoing, and positive can-do attitude? Do you have what it takes to WOW a customer every time?” (Craigslist).

GE: Louisville Metro Police arrested a 43-year-old Louisville man who they said was caught by a General Electric employee trying to sell more than $7,000 worth of stolen appliances online. Terrance Qualls is accused of advertising a refrigerator valued at $2,799 for $700 on an online classifieds website, according to an arrest citation released today. A GE employee noticed the item and asked about buying it (Courier-Journal).

PAPA JOHN’S yesterday presented a $41,000 check to WHAS’s Crusade for Children. The Louisville-based pizza giant raised the money in a promotion where customers got a 20% discount while 20% of the order was donated to the charity benefiting special-needs children (WHAS). Meanwhile, in New York’s Queens borough, Papa John’s says it’s hiring delivery drivers in help-wanted ads saying they’ll earn $600 or more a week working a “safe area” (Craigslist).

Brian Niccol
Niccol

TACO BELL CEO Brian Niccol has joined the 11-member board of directors of Harley Davidson (press release). Last year, directors of the motorcycle manufacturer got paid $235,000 to $290,000, depending on committee assignments, according to the 2016 shareholder’s proxy report. They also received a clothing allowance of $1,500 to buy Harley-Davidson brand apparel and accessories, plus an unspecified product discount available to all U.S. employees.

Harley Davidson ball capWhat could Niccol buy with his $1,500 allowance? Boulevard went shopping at Harley Davidson’s online store, and came up with this wish list:

Niccol’s appointment nudges him a little higher in The Boulevard 400™ powerbroker roster.

UPS: In Beaumont, Texas, Anna Gabrielle Van Hook, a 26-year-old woman hurt in a fatal crash last month, is now seeking $1 million from the shipper in a lawsuit accusing a UPS driver of traveling at an unreasonable speed on June 17, causing a chain-reaction crash involving multiple drivers. The accident started when a UPS truck hit a Mercedes from behind, and the driver of that car struck Van Hook’s car. A 45-year-old passenger in the Mercedes was killed (Enterprise).

KFC: In Swaziland’s Manzini, police are investigating allegations that a KFC restaurant manager locked two employees in a walk-in freezer for more than 20 minutes last week, before they were rescued by a co-worker who heard them banging on the door. The employees say it all began when their boss asked them to go into the freezer to retrieve some supplies (Swazi Observer).

And if that wasn’t strange enough, there’s this: In the U.K.’s Yorkshire, a 25-year-old woman who goes by just one name — Lydia — is cashing in on an Internet food porn craze called muk-bang, where thousands of people Continue reading “Texas Roadhouse stock dives 6% on downgrades; Amazon gets U.K.’s OK to test drones, possibly bringing service there before U.S.; and KFC food porn gets a video star” →

Cops and Courts

Restaurant regulations 101: Risk factors companies face in the course of their business

Publicly traded companies disclose an array of risks to their businesses in annual reports filed with the Securities and Exchange Commission. Lawsuits and other legal proceedings are a big one, because they can spur huge monetary awards to plaintiffs.

Here are relevant passages from the “Risk Factors” section of the annual 10-K reports for three restaurant chain giants that are occasionally drawn into crime news stories; links are to the reports themselves. Continue reading “Restaurant regulations 101: Risk factors companies face in the course of their business” →

Cops and Courts

Video at Russian KFC: one man knocks another unconscious with ‘jaw-crushing right hook’; and U.K. man to be tried in horrific attack on 17-year-old at Hut

The latest crime news across the world of 48,000 restaurants*; updated 3:02 p.m.

Crime scene tapeAt a KFC in Russia, one man cold-cocked another diner out cold in an incident caught on video by a witness who described it as “the hardest punch I’ve ever seen.”

In the background of the video, according to the U.K.’s Daily Star, a large man dressed in a blue polo shirt engages in an escalating war of words with another diner in a pink sleeveless vest. The man in the vest appears to try and grab his dining partner, “but it’s clearly a mistake — the man in blue pushes him away “before launching a jaw-crushing right hook.”

The Daily Star story doesn’t say when the fight took place. Here’s the video:

Pizza Hut

In the U.K. 18 miles south of London, a 32-year-old man accused of raping, stabbing and kidnapping a teenage girl last month will face trial in November. The incident started at a Pizza Hut in Epsom, according to news reports.

The man, Costica Voedes of Epsom, has been charged with two counts of wounding with intent, two counts of rape, kidnap, false imprisonment, possession of an offensive weapon, affray and common assault, according to the Epsom Guardian. He will be tried at Guildford Crown Court on Nov. 21, with the trial expected to last seven days.

Voedes did not appear at a pre-trial preparation hearing at Guildford Crown Court yesterday, and so did not enter a plea, the Guardian said.

Surrey police said the charges relate to an incident that took place shortly after 10.30 p.m. on June 17 — a Friday — at the Pizza Hut restaurant on Waterloo Road and Court Recreation Ground. Police say Voedes burst into the outlet and dragged the 17-year-old girl outside, later raping her at a nearby recreation ground, according to the Sun.

A restaurant employee  who rushed to intervene was also attacked and injured, the Sun said.

* Yum has 43,000 KFCs, Pizza Huts and Taco Bells in nearly 140 countries; Papa John’s has 4,900 in 37 countries, and Texas Roadhouse has 485 restaurants in five countries. With that many locations, crimes inevitably will occur — with potentially serious legal consequences for the companies.

Latest Headlines

BULLETIN: DOJ SUES TO HALT BLOCKBUSTER HUMANA-AETNA AND ANTHEM-CIGNA MERGERS; VOWS TO FIGHT, BUT STUNNING MOVE CASTS SHADOW OVER COMPANY AND CITY

In a pair of widely anticipated lawsuits, the Department of Justice said the two multi-billion dollar mergers would reduce competition, raise prices for consumers and stifle innovation if the number of large, national insurers were to fall from five to three, according to Reuters and multiple other news outlets. Latest news developments at 4:19 p.m.

Loretta Lynch
Lynch

“We will not hesitate to intervene. We will not shy away from complex cases,” U.S. Attorney General Loretta Lynch told a news conference today. “We will protect the interests of the American people.”

Although the DOJ had signaled its opposition a week ago, today’s suits were still a stunning turn of events for Humana, which announced its planned $37 billion tie-up with Aetna of Hartford a year ago. The agency’s move immediately threw into doubt the future of the Fortune 500 company, founded in 1961 by attorneys and Kentucky natives David A. Jones and Wendell Cherry with a single nursing home. With 12,500 workers in Louisville alone, it’s one of the city’s biggest private employers.

The DOJ’s move was the latest example of the Obama administration challenging massive combinations in major industries, from oilfield services to telecommunications, according to Reuters. “We have no doubt that these mergers would reduce competition from what it is today,” said Principal Deputy Associate Attorney General William Baer, who spearheaded the antitrust reviews.

Humana shares roared 8% higher, closing at $171.53 a share, up $13.12, after the news broke shortly before noon. That gain may be due to the insurer’s raising full-year earnings guidance. In a press release amid the DOJ news, Humana said the higher guidance is primarily the result of better-than-anticipated year-to-date performance for its individual Medicare Advantage and Healthcare Services businesses, partially offset by continued challenges in the individual commercial medical business. Humana also said it plans to exit eight of 19 state Obamacare health care exchanges.

The stock’s rise may also reflect Wall Street’s preference for certainty over doubt. With the DOJ’s suit, stockholders now know what may be the worst. More than 10 million shares changed hands by the close of trading at 4 p.m. ET, nearly four times average volume.

Aetna’s stock rose a slimmer 1.6%, closing at $118.30. Unlike Humana’s, Aetna’s shares hadn’t been beaten down as much in the week since the DOJ’s opposition became clear last Thursday and Friday.

Will ‘vigorously defend’ plan

In the Humana-Aetna case, the government focused on the companies’ offering for Medicare Advantage and their ability to compete on public exchanges that were set up by the Affordable Care Act, according to The New York Times.

Humana logoHumana and Aetna said they would “vigorously defend” their pending merger. The Hartford company said previously that it would challenge a DOJ decision to block the merger, the Times said. Cigna said it was evaluating its options but did not expect the transaction to close anytime soon, “if at all.”

Mark Bertolini
Bertolini

Aetna CEO Mark Bertolini said the company has proposed divesting enough assets to ensure competition in markets where it overlaps with Humana.

“If we can’t come to a negotiation on what markets to divest, although we have two very complete remedies in front of the Department of Justice now, I think I’m willing to let a judge decide,” Bertolini told business news channel CNBC, according to Reuters. “We’ll go all the way we need to make this happen.”

At least two states joined the DOJ suits. Illinois moved against Humana-Aetna, according to the Chicago Tribune, and Tennessee against Anthem-Cigna, said the Knoxville News-Sentinel.

Frank Morgan and his team at RBC Capital Markets looked at a review by international law firm Arnold & Porter of the more than 1,600 proposed mergers in 2015, of which the FTC and DOJ collectively brought formal actions in 34 cases, according to Barron’s.

“Of these, the vast majority (23 or 68%) were resolved by consent decree,” the RBC team found.

Would create a colossus

But for Humana-Aetna to reach such a settlement, they might need to so fundamentally alter the deal’s terms that it no longer makes business sense.

Humana building
Humana Tower.

If it can be salvaged, it would create an insurance colossus, with a combined $114 billion in annual revenue, up to 60 million members, and 110,000 employees. Humana has more than 21.3 million members and does business in all 50 states. It has approximately 50,000 employees, including those nearly 13,000 in Louisville housed in the company’s iconic skyscraper on Main Street downtown. Last year’s Humana revenues were $54 billion.

Anthem and Cigna announced their proposed $48 billion merger on July 24, three weeks after Aetna and Humana announced their own deal.

Latest Headlines

BF starts distribution system in Spain; GE Appliances owner Haier dragged into GOP China politics; and Tenn. man arrested over 20 lbs. of marijuana allegedly shipped via UPS

A news summary focused on 10 big employers; updated 4:55 p.m.

BROWN-FORMAN announced this morning that it’s launching its own distribution network in Spain, Europe’s third-largest whiskey market and the world’s ninth-biggest overall. The Louisville spirits giant will add about 40 employees in the expansion. The current distributor is Importaciones y Exportaciones Varma S.A. under a contract that will end June 30, 2017. “Establishing our own distribution organization in Spain will support the development of the Jack Daniel’s trademark as well as our broader portfolio in this dynamic market where premium spirits are growing,” said Thomas Hinrichs, president of Brown-Forman’s Europe and Asia markets.

Spain will join Australia, Brazil, Canada, China, the Czech Republic, France, Germany, Hong Kong, Mexico, Poland, South Korea, Thailand, Turkey, and the U.K. as markets where Brown-Forman owns or directly manages its own distribution. (press release). The company employs 1,300 workers in Louisville and another 3,300 across the U.S. and around the globe.

Trump and Pence
Trump and Pence

GE: Haier Group has been drawn into the bitterly contested Republican race for the White House, less than two months after the Chinese company completed its $5.6 billion purchase of GE Appliances. The conservative Federalist website says Indiana Gov. Mike Pence’s past support of Haier’s research and development center in Evansville, Ind., is an example of the politician’s helping China “steal” U.S. jobs. Although Donald Trump has run on a campaign attacking U.S.-China trade, the website implies his selection of  Pence as running mate casts doubt on the GOP nominees’ anti-China bonafides (Federalist). In the past, the site has sparked stories in more mainstream media, including Politico and The Daily Beast.

Haier Pence
Indiana Gov. Mike Pence, second from right, and Haier Group President Liang Haishan, far right, at the Evansville ribbon-cutting.

A year ago, Pence joined Haier executives at a ribbon-cutting ceremony for the Evansville center. The pro-trade America China Society of Indiana quoted Pence saying at the time: “When I met with Haier executives in China this spring, I was invigorated by the company’s plans to accelerate technology development in Indiana. In addition to our strong workforce and pro-growth business climate, Indiana has quickly become a center for innovation, making the Hoosier State the natural choice for this facility as Haier continues to increase its presence in the United States” (America China Society). GE Appliances employs 6,000 workers at Appliance Park in Louisville’s south end.

UPS: In Spring City, Tenn., a man was arrested and charged with drug trafficking after Rhea County Sheriff’s deputies caught him with 20 lbs. of marijuana he allegedly received via UPS from California. Sheriff’s investigator Charlie Jenkins said the man, George Robert Luttenberger Jr., told him he’d been getting pot from California since 2012 (Herald-News). In Brooklyn, a federal judge allowed the Equal Employment Opportunity Commission to proceed with a lawsuit accusing UPS of discriminating against male workers and job applicants who wore beards or long hair for religious reasons (Reuters).

PAPA JOHN’S fired a Denver employee who used a racial slur on a customer’s order slip and apologized to the teenager who placed the pizza order. “This action is inexcusable and doesn’t reflect our company values,” company spokesman Peter Collins told the Denver Post.

This was the second instance in less than a month where a Papa John’s employee was fired over an apparently racist order slip circulated on Twitter; the first one involved an Asian-American customer’s order at a Louisville restaurant near the end of June.

The Denver area restaurant is owned by Peyton Manning, the retired Denver Broncos quarterback who’s promoted Papa John’s in TV commercials. The teenager’s mother saw the order ticket and asked a community activist named Brother Jeff Fard for help (Denver Post). Yesterday, Fard sent a Tweet that included a possibly NSFW photo of the racial slur: Continue reading “BF starts distribution system in Spain; GE Appliances owner Haier dragged into GOP China politics; and Tenn. man arrested over 20 lbs. of marijuana allegedly shipped via UPS” →

Latest Headlines

Humana, Aetna reportedly still talking with DOJ to overcome deal opposition; Papa John’s sued over IT exec it poached from Panera Bread

A news summary focused on 10 big employers; updated 5:59 p.m.

HUMANA and Aetna remained in discussions with the Department of Justice today, trying to convince antitrust regulators their $37 billion merger will be good for seniors in the Medicare Advantage market, CNBC is now reporting.

Humana logoBut the two insurance giants are prepared to fight in court if their deal is blocked, a move DOJ antitrust regulators could take within just days, according to the business news cable channel, which is citing people familiar with the discussions who spoke on condition of anonymity because of the sensitive nature of the negotiations. “The insurers have offered up divestitures and secured buyers,” according to CNBC, “with contracts ready to be signed, for assets in local markets where their coverage overlaps, according to one source. But so far, the DOJ has not been convinced by the offer” (CNBC).

Aetna logoReflecting renewed investor optimism, Humana shares climbed 3% today, closing at $158.41 a share, up $4.77; shares had fallen 10% yesterday on initial reports the DOJ was moving to block the deal. Aetna’s stock rose 1.2%, to $116.49 (Google Finance).

To secure shareholder approval of the deal, Humana’s proxy solicitor, D.F. King & Co., made more than 40,000 phone calls to individual investors last fall (Wall Street Journal).

PAPA JOHN’S: Panera Bread Co. has filed a lawsuit claiming a former technology executive who left to work for Papa John’s took trade secrets with him. The suit filed yesterday in U.S. District Court in St. Louis against Papa John’s and the executive, Michael Nettles, says he worked four years as a vice president in Panera’s IT department, with access to highly sensitive trade secrets, and that his move to Papa John’s violates a confidentiality and non-compete agreement. Nettles joined Papa John’s on Monday. Panera is based in suburban St. Louis (Post-Dispatch).