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A group of 25 Republican attorneys general sued Labor Secretary Marty Walsh and the Labor Department over a Biden administration regulation that gives retirement plan sponsors more freedom to consider environmental, social and governance factors when selecting investments, Roll Call reported. The final rule, which went into effect this week, remains in force during the legal challenge, as the financial services industry ramps up an effort to offer ESG-focused retirement plans to more Americans. The complaint, filed Jan. 26, argues that the department’s rule, released in November, undermines key protections for retirement savings and oversteps the department’s statutory authority under a 1974 law known as the Employee Retirement Income Security Act, which governs a broad range of retirement and health benefit plans. The lawsuit asked the court to toss the ESG rule, calling it “arbitrary and capricious” and a violation of both ERISA and the Administrative Procedure Act. “The 2022 Investment Duties Rule contravenes ERISA’s clear command that fiduciaries act with the sole motive of promoting the financial interests of plan participants and their beneficiaries,” according to the lawsuit, filed in the U.S. District Court for Northern District of Texas, Amarillo division. “DOL does not adequately justify its decision to permit fiduciaries to consider nonpecuniary factors when making investment decisions or exercising shareholder rights,” the lawsuit continued. “By formally injecting ESG concepts into the ERISA prudent duty regulations, DOL has ventured into territory that Congress explicitly rejected when it drafted ERISA.” The plaintiffs include Texas, Florida and West Virginia, as well as oilfield services firm Liberty Energy; Western Energy Alliance, an oil and natural gas trade association; and James R. Copland, a senior fellow at the Manhattan Institute who is a participant in a retirement plan subject to ERISA.

Former Bed Bath & Beyond Inc. employees say they haven’t been paid promised severance, the latest sign of the worsening financial squeeze at the home-goods retailer, Bloomberg News reported. Some former employees received an email on Jan. 26 from the human resources department that read, in part: “We are reaching out to you to inform you that there has been a delay with your payment,” according to copies viewed by Bloomberg News. “We recognize the challenges this may cause and appreciate your patience as we work to provide an update.” Former staffers who raised concerns about their severance pay in recent days received an additional email. They asked not to be identified out of concern it would jeopardize their payments. “We are working to provide you with an update, and we are aiming to be back in touch by Wednesday, February 8,” the message said. The email didn’t explain the significance of that date. The delayed payments underscore the mounting financial distress for one of the largest home-goods retailers in the US. On Wednesday, the company confirmed it missed interest payments on its bonds. Last week, Bed Bath & Beyond received a default notice from its loan agent, JPMorgan Chase & Co., warning that it didn’t have enough funds to make payments.

Vacancies at US employers unexpectedly increased at the end of 2022, illustrating a solid appetite for labor that the Federal Reserve sees as one of the last hurdles to bring down inflation, Bloomberg News reported. The number of available positions climbed to a five-month high of just over 11 million in December from 10.4 million a month earlier, the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed Wednesday. The increase was the largest since July 2021 and mostly reflected a jump in vacancies in accommodation and food services. The openings figure exceeded all economists’ estimates in a Bloomberg survey that had a median projection of 10.3 million. The S&P 500 fell and Treasury yields rose after the report. The figures are consistent with a jobs market where labor demand far outpaces supply and poses a risk of sustained upward pressure on wages that could reignite inflation. That’s likely to be a big talking point of Fed Chair Jerome Powell when he speaks this afternoon at the conclusion of the central bank’s first policy meeting of 2023. Officials are expected to slow the pace of interest-rate hikes to a quarter point.

Unemployment fraud from pandemic jobless benefits may have topped $60 billion, according to a new report from the U.S. Government Accountability Office (GAO), The Hill reported. The federal watchdog said the Labor Department reported fraud estimates of about $8.5 billion for regular unemployment insurance programs in 2021. However, the government created four new unemployment programs during the COVID-19 pandemic aimed at alleviating the toll on workers. The GAO estimated that if the rate of fraud were extrapolated to total spending across all unemployment insurance programs during the pandemic, the fraud total would come out to more than $60 billion. The federal government paid out around $878 billion in unemployment insurance benefits between April 2020 and September 2022, according to Labor Department statistics. The report notes that unemployment insurance programs have long had integrity issues, and the GAO recommended that the Labor Department come up with an anti-fraud strategy based on guidance from the watchdog. The GAO said in the report that the department “partially” agreed with the recommendation and said it plans to address it.

Bed Bath & Beyond Inc. reported a wider net loss than expected yesterday, underscoring the likelihood of a bankruptcy filing within the next couple of months by one of the largest US home-goods retailers, Bloomberg News reported. The beleaguered retailer said its net loss widened to $393 million in the three months ended Nov. 26. Just last week, the company had said it expected to report a net loss of $386 million. That compares with a loss of $366 million in the second quarter. The company reiterated on Tuesday that it was considering “all strategic alternatives” to get back on financial track. “Multiple paths are being explored and we are determining our next steps thoroughly,” Bed Bath & Beyond Chief Executive Officer Sue Gove said in a statement. Last week, the retailer said those options included the possibility of bankruptcy, a warning that came after it withdrew a bond-swap offering. It had launched the plan in October to lessen its debt burden. The company said on Tuesday that it had about $200 million of cash on hand. Read more.

In related news, Bed Bath & Beyond will lay off more employees in an attempt to reduce costs, the company said yesterday, a week after announcing it was exploring options including bankruptcy, Reuters reported. Last year, company executives had said the home goods retailer was cutting about 20% of its corporate and supply chain workforce. "As our strategic direction changes and we streamline our operations, it is necessary to right-size our organization to ensure we are equipped for the future," the company said in a statement on Tuesday, without revealing the magnitude of the new layoffs. Read more.

Coinbase Global said in an SEC filing yesterday it would lay off approximately 20% of its staff, or around 950 employees, as part of larger cost-cutting measures amid continued turbulence in the cryptocurrency industry, YahooFinance.com reported. "In 2022, the crypto market trended downwards along with the broader macroeconomy," Coinbase CEO Brian Armstrong said in a blog post. "We also saw the fallout from unscrupulous actors in the industry, and there could still be further contagion.... In the face of increasingly challenging economic conditions, we made the difficult decision to further reduce the size of our teams to ensure we have the appropriate operational efficiency to weather downturns in the crypto market, and capture opportunities that may emerge." With this third round of layoffs for the firm, the company has cut 2,110 workers since June 2022 and projects it will slash operating expenses by around 25% for the first quarter compared to Q4 of 2022. The company said it intends to complete the overall cost-cutting plan by the second quarter of this year. Coinbase said it estimates it will pay between $149 million to $163 million in total restructuring costs. The company further broke that down into $58 million to $68 million in cash charges for employee severance and termination benefits, with $91 million to $95 million in expenditures being paid out as stock-based compensation.