Charles Hobson, Who Helped Break a TV Color Line, Dies at 83

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Charles Hobson, an Emmy Award-winning producer who helped shatter racial stereotypes by delivering a black perspective that had been missing from early television programming, died on Feb. 13 in the Bronx. He was 83.

His daughter Hallie Spencer Hobson confirmed his death, from heart failure, in a hospital.

Mr. Hobson, who lived in Boerum Hill, Brooklyn, was instrumental in the success of the groundbreaking series “Inside Bedford-Stuyvesant” and “Like It Is,” which introduced white audiences to everyday life in black communities. Those places had been largely invisible, or defined by negative images, during the first decades of TV’s evolution.

His programs not only provided a singular perspective on contemporary issues; they also gave an unfiltered voice to people who had been neglected when television was struggling through its adolescence.

“Inside Bedford-Stuyvesant,” which ran from 1968 until 1970 on WNEW-TV in New York, has been called the city’s first regular program written, produced and presented by black people.

“Here was not a ‘ghetto’ filled with enraged protesters and rioters,” Charles Musser, who teaches film and media at Yale University, has written. “Here were people struggling to live their lives with dignity, grace and ambition.”

The show’s 52 half-hour episodes featured entertainers like Eubie Blake, Harry Belafonte and the drummer Max Roach; the champion pool player Cisero Murphy; and uncelebrated local teachers, police officers and street performers. It was broadcast at 1 a.m. and 7 a.m. but still managed to find an audience. Social historians regard it as a vital video time capsule of an urban neighborhood.

“This was a way for blacks to hear their voices,’‘ Mr. Hobson told The New York Times in 1998. “Here’s a community of about 400,000 people at that time, with all of their culture and churches, and no coverage.”

“People spoke their hearts and their minds,” he said of the residents featured on the program. “They didn’t know how to do anything else at that time because there weren’t any models.”

Mr. Hobson had an impact not only on black audiences but also on white viewers, who were introduced to people, places and problems they might not have contemplated before.

Rhea L. Combs, supervisory curator of the Smithsonian’s National Museum of African American History & Culture, said in an email that Mr. Hobson “gave voice to black communities at a time their issues, triumphs and concerns were either ignored or misrepresented in mainstream media.”

Charles Blagrove Hobson was born on June 23, 1936, in Brooklyn to West Indian immigrants. His father, Charles, was a machinist who worked for the city’s Housing Authority. His mother, Cordelia (Spencer) Hobson, was a maid.

Charles grew up in a brownstone on Hancock Street in Bedford-Stuyvesant; the family moved to an apartment in Crown Heights after he was mugged when he was 18. He graduated from Boys High School, earned a bachelor’s degree from Brooklyn College in 1960 and served in the Army.

Lore has it that after college, when he was working temporarily as a rug salesman, he was listening to the listener-supported New York FM station WBAI and grew so exasperated by its subpar treatment of black gospel music that he contacted the station to complain. He was invited to host his own weekly show to prove he could do better. He did, and in 1963 the station hired him full time.

Mr. Hobson was WBAI’s production director until 1967 and later a producer for television stations in Washington and New York.

“Inside Bedford-Stuyvesant” was conceived by Senator Robert F. Kennedy’s Bedford-Stuyvesant Restoration Corporation, a community development group, and began with a $45,000 budget. It was hosted by James C. Lowry and the actress Roxie Roker, a local resident who was later a regular on the sitcom “The Jeffersons.”

“It’s so unplanned, it’s so informal, it’s so — I hate to use the word — but genuine,” Professor Musser said of the program in 1998. “Just about anyone in the community could show up and be on TV.”

Mr. Hobson was also the first black producer of the WABC-TV program “Like It Is,” another early public affairs program that focused on minority issues. (The program, which ran from 1968 to 2011, had a black host, Gil Noble, but originally an all-white production staff.) “Like It Is” won seven local Emmy Awards.

In the late 1970s, Mr. Hobson was senior vice president for international co-productions at WETA in Washington.

He produced the 13-week PBS series “From Jumpstreet: A Story of Black Music” (1980) and the nine-part PBS-BBC co-production “The Africans” (1986). In 1989, he was hired to be the director of market planning for WNET, the New York public television station. He taught film in Munich as a Fulbright scholar in 1996.

In the 1980s he began Vanguard Documentaries, which produced “Porgy and Bess: An American Voice” (1998) and “Harlem in Montmartre: Paris Jazz” (2009) for “Great Performances” on PBS, and Treasures of New York: The Flatiron Building” (2014) for WNET.

In addition to his daughter Hallie, from his marriage to Cheryl Chisholm, which ended in divorce, he is survived by his wife, Maren Stange; their daughter, Clara Hobson; a sister, Delvita Lovell; and a brother, George. His first marriage, to Andrea Marquez, also ended in divorce.

Mr. Hobson left New York temporarily in 1972 to become director of the Center for Mass Communications at Clark College in Atlanta (now Clark Atlanta University), seeking a respite from the whirlwind of the broadcast industry.

“In addition to the job stress, no position can insulate a black from the pressures of being black in this society,” he told The New York Times Magazine in 1982.

“My success is based on coming up with interesting, culturally redeeming projects and finding the money and staff to oversee the production and distribute the program,” he added. “I’ve made a lot of progress. It makes you feel good when you realize that you can succeed in their system.”

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Holocaust Educators Urge Amazon to Stop Selling Nazi Propaganda

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Two organizations that educate the public about the Holocaust are calling on Amazon to stop selling Nazi propaganda, rekindling a debate over what should be sold through the world’s biggest digital marketplace.

The Holocaust Educational Trust, which trains students and teachers across Britain, posted a letter on Twitter on Friday calling on Amazon U.K. to stop selling books by Julius Streicher, the founder of the Nazi-era anti-Semitic newspaper Der Stürmer.

Karen Pollock, the trust’s chief executive, cited “The Poisonous Mushroom,” an illustrated children’s book by Streicher, published in 1938. The text, which likens Jews to the devil, was “designed to brainwash an entire generation of children that Jews were inherently evil,” she wrote in an email.

The book was used as evidence at the Nuremberg trials, during which Streicher was convicted of directing and participating in crimes against humanity. “The front cover alone draws on longstanding and offensive antisemitic tropes, Ms. Pollock wrote in the letter. Throughout his life, Streicher was committed to advocating the annihilation of Jews. Among his final words before he was executed in 1946 were “Heil Hitler.”

The Auschwitz-Birkenau Memorial and Museum’s Twitter account shared Ms. Pollock’s letter, along with screen-grabs of several other anti-Semitic texts by Streicher sold on Amazon. “Such books should be removed immediately,” the museum wrote.

On Friday afternoon, Amazon did not appear ready to commit to a course of action.

“As a bookseller, we are mindful of book censorship throughout history, and we do not take this lightly,” a representative said in a statement to The New York Times. “We believe that providing access to written speech is important, including books that some may find objectionable, though we take concerns from the Holocaust Educational Trust seriously and are listening to its feedback.”

This is not the first time Amazon has been urged to remove “The Poisonous Mushroom.” Last month, Sheldon Lazarus, a producer of the movie “Auschwitz: The Final Witnesses,” told the Daily Mail, “If Amazon can predict what you want to buy, then they should be able to stop this filth.”

In the past, Amazon has promptly removed some listings in response to objections. In December, it stopped selling holiday ornaments and a bottle opener displaying images of the Nazi concentration camp Auschwitz after the Auschwitz-Birkenau museum called the products “disturbing and disrespectful” on social media.

But Amazon takes a different approach with books than it does with home goods. “Amazon’s Offensive Products policies apply to all products except books, music, video and DVD,” the retailer’s guidelines state.

Nonetheless, Amazon has ramped up its policing of some hate-filled texts. In recent months, it has removed several titles by George Lincoln Rockwell, the founder of the American Nazi Party. A web address for “My Awakening: A Path to Racial Understanding” by David Duke, a former leader of the Ku Klux Klan, now directs to a page featuring a picture of an Amazon employee’s dog. In July, L.G.B.T.Q. activists convinced Amazon to stop selling “A Parent’s Guide to Preventing Homosexuality,” written by a vocal proponent of the discredited practice of using “conversion therapy” to turn gay people straight.

Some third-party booksellers that sell titles on Amazon told The Times earlier this year that they would welcome more clarity about why some texts are prohibited and not others. They also urged the company to publish a list of prohibited books.

One argument in favor of allowing the sale of hateful texts is that they may be useful to historians and educators.

Ms. Pollock of the Holocaust Educational Trust said she did not believe that all of Streicher’s books should be destroyed. “But there’s a difference between being available at a museum/educational institution and just finding it online among toys, gifts and trivia,” she wrote in an email.

She said that Amazon had told the trust that it was investigating the matter and would get back to her in three days.

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Coronavirus Outbreak Deepens Its Toll on Global Business

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A loss of $29 billion in airline revenue. China auto sales down by 92 percent. Interruptions for Procter & Gamble’s 387 suppliers in China.

As the coronavirus outbreak rattles the global economy and disrupts supply chains, international companies across nearly every industry are confronting a stark reality: Business will not go on as usual.

And investors have taken notice. U.S. stocks fell for the second-straight day on Friday. Shares of energy, airline and technology companies led the broader market lower on Wall Street, as the S&P closed more than 1 percent lower, putting it on pace for its worst day of the month. Oil and gas prices also fell, with the price of a barrel of benchmark American crude slipping nearly 1 percent. The markets have become more volatile since the outbreak, but American investors have largely shrugged off the threat. Since Jan. 7, when Chinese officials identified the virus, the S&P 500 remains up more than 3 percent, even after this morning’s sell-off. — Matt Philips

The International Air Transport Association this week warned of a deep downturn in earnings among global carriers related to the collapse of travel in Asia because of the virus.

The virus outbreak could reduce global airline revenue by about $29 billion in this year, resulting in a small industry contraction compared with 2019, it said.

Virtually all of the losses are expected to hit airlines in the Asia-Pacific region, which are facing a 13 percent decline in passenger demand for the year, according to the association’s analysis.

Some airlines have begun to acknowledge the outbreak’s effects, with Air France-KLM Group and Australia’s Qantas Group separately warning on Thursday of a potential financial hit.

Qantas said that the coronavirus could reduce its profit for the fiscal year that ends June 30 by $66 million to $99 million, while Air France-KLM estimated a hit to earnings of as much as $216 million between February and April this year.

More than 20 international airlines have suspended or restricted routes that end in Wuhan, the center of the outbreak, and other major Chinese cities.

  • What do you need to know? Start here.

    Updated Feb. 10, 2020

    • What is a Coronavirus?
      It is a novel virus named for the crown-like spikes that protrude from its surface. The coronavirus can infect both animals and people, and can cause a range of respiratory illnesses from the common cold to more dangerous conditions like Severe Acute Respiratory Syndrome, or SARS.
    • How contagious is the virus?
      According to preliminary research, it seems moderately infectious, similar to SARS, and is possibly transmitted through the air. Scientists have estimated that each infected person could spread it to somewhere between 1.5 and 3.5 people without effective containment measures.
    • How worried should I be?
      While the virus is a serious public health concern, the risk to most people outside China remains very low, and seasonal flu is a more immediate threat.
    • Who is working to contain the virus?
      World Health Organization officials have praised China’s aggressive response to the virus by closing transportation, schools and markets. This week, a team of experts from the W.H.O. arrived in Beijing to offer assistance.
    • What if I’m traveling?
      The United States and Australia are temporarily denying entry to noncitizens who recently traveled to China and several airlines have canceled flights.
    • How do I keep myself and others safe?
      Washing your hands frequently is the most important thing you can do, along with staying at home when you’re sick.

And airlines in Asia are cutting flights elsewhere. Singapore Airlines said it would temporarily cut flights between the city state and major destinations like New York, Paris, London, Tokyo, Seoul and Sydney.

Cathay Pacific, the Hong Kong carrier, has also canceled nearly all of its flights to mainland China and is reducing service elsewhere over the next two months. — Niraj Chokshi and Amie Tsang

Auto sales in China collapsed this month, with the Chinese Passenger Car Association saying that sales at dealerships had plummeted 92 percent in the first half of February compared with the same time last year.

China is the world’s biggest car market by a wide margin. So a nose-dive in sales there hurts the global industry.

The German luxury auto giant Daimler — which makes Mercedes-Benz — cautioned in its annual report that the virus could lead to a significant drop in Chinese economic growth. The report said the virus “may not only affect the development of unit sales, but may also lead to significant adverse effects on production, the procurement market and the supply chain.”

Jaguar Land Rover warned that the coronavirus could soon begin to create production problems at its assembly plants in Britain.

Like many carmakers, Jaguar Land Rover uses parts made in China. With factories there shut down or operating at reduced capacity, assembly lines in the rest of the world are expected to run short of essential components. — Keith Bradsher

With much of China still on lockdown, businesses are struggling to get workers back and factories running.

In a release this week, Foxconn, the world’s largest contract manufacturer of electronics and a key player in Apple’s supply chain, indicated just how difficult that will be. Foxconn said its revenue would take a hit from the spread of the coronavirus, and that it would be “cautious” in resuming work at its factories in China. Plants outside of the country, in places like Vietnam and Mexico, were at full capacity, the company said.

The revenue warning comes as Chinese leaders try to balance restarting the economy with controlling the virus. Concerns about Foxconn’s production also underscore the potential broader impact the epidemic could have on global electronic supply chains. A huge portion of the world’s electronics come out of China’s factories, filled with parts also made in China’s factories, and a longer suspension of production could hit overall supply. Some have even warned that it could hasten a decoupling, which has been urged at times by both Chinese and American leaders out of security concerns. — Paul Mozur

Procter & Gamble, the consumer products behemoth, said in a federal filing this week that disruptions to supply and demand caused by the outbreak would “materially” affect the company’s quarterly results.

“China is our second largest market — sales and profit,” Jon R. Moeller, a company executive, said at a conference in New York on Thursday, according to the filing. “Store traffic is down considerably, with many stores closed or operating with reduced hours. Some of the demand has shifted online but supply of delivery operators and labor is limited.”

The company relies on 387 suppliers in China, each facing difficulties in resuming operations, Mr. Moeller said. — Niraj Chokshi

The French government said it would urge companies to review their “over-dependence” on China for raw materials and parts as the outbreak exposes weaknesses among French manufacturers that have outsourced their supply chains there.

The French finance minister, Bruno Le Maire, singled out automakers, which have been having trouble getting parts like brake pedals, and the pharmaceutical industry, which gets 80 percent of the raw materials for some drugs from China and Asia.

The government estimated the economy may shrink by around 0.1 percent this year as result of the outbreak. Wuhan, the center of the outbreak, is home to more than one third of all French investment in China. — Liz Alderman

China’s banks are lowering borrowing costs for companies and households to try to soften the economic blow of the coronavirus.

The move follows a rash of policies from China’s central bank to shore up an economy hobbled by weeks of a near nationwide shutdown of business. On Thursday, the People’s Bank of China said it lowered the one-year loan prime rate to 4.05 percent from 4.15 percent, and slashed the five-year loan rate to 4.75 percent from 4.8 percent.

Economists are lowering their growth expectations for China this year as businesses are only just beginning — somewhat haltingly — to get back to work. Some said the move would do little to address the widespread impact of the epidemic on China’s once vibrant business community. — Alexandra Stevenson

Adidas, the German sportswear maker, said that its mainland China business had been decimated by the outbreak.

Sales in the region dropped by about 85 percent since Chinese New Year on Jan. 25, the company said, compared with the same period a year ago. Fewer shoppers in South Korea and Japan also contributed to the falloff in sales, a result of the sharp drop in Chinese tourism that has also affected the aviation and hospitality sectors as well as the fashion retail business.

Adidas sells its products from about 12,000 stores in China, around 500 of them its own stores and the rest franchises. — Elizabeth Paton

Geneva Abdul contributed reporting.

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Federal Prosecutors Investigating Whether Boeing Pilot Knowingly Lied to F.A.A.

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Federal prosecutors investigating Boeing are examining whether the company knowingly misled the Federal Aviation Administration while it was seeking the regulator’s approval for its 737 Max plane, according to two people familiar with the matter who spoke on the condition of anonymity to discuss an ongoing inquiry.

In recent months, prosecutors have questioned several Boeing employees in front of a federal grand jury, with some of their queries focusing in particular on whether Mark Forkner, a top pilot at the company, intentionally lied to the regulator about the nature of new flight control software on the jet, the people said. That software, which is known as MCAS and automatically pushes the nose of the plane down, later played a role in two crashes that killed 346 people.

The Department of Justice has been investigating Boeing for months, but the information about the grand jury testimony provides some clarity about how prosecutors could be aiming to hold the company accountable for errors that led to the two crashes involving the Max. Mr. Forkner could face criminal charges of lying to the government. The company could also be held liable for potential wrongdoing by Mr. Forkner, because he was a senior employee responsible for Boeing’s interaction with the F.A.A. group that determined the kind of training pilots would have to have before flying the Max.

Last year, the company made public an instant message chat between Mr. Forkner and his colleague Patrik Gustavsson. In the exchange, which took place in November 2016, months before the Max was certified by the F.A.A., Mr. Forkner said that MCAS was acting unpredictably in a flight simulator. “I basically lied to the regulators (unknowingly),” Mr. Forkner said.

In grand jury testimony in recent months, prosecutors asked the Boeing employees an array of questions, but kept returning to the issue of whether Mr. Forkner had, in fact, lied to the agency about MCAS.

“We are cooperating with the Justice Department’s investigation,” a Boeing spokesman, Gordon Johndroe, said in a statement.

The Max has been grounded worldwide for nearly a year. The accidents spurred several investigations, including the criminal inquiry led by the Justice Department, and touched off a crisis that has cost the company billions of dollars and upended the global aviation industry.

Boeing fired its chief executive, Dennis A. Muilenburg, late last year and has temporarily shut down production in its 737 factory in Renton, Wash., jolting the national economy and provoking the concern of President Trump. After months of setbacks, Boeing says it has a fix for MCAS and expects regulators around the world to clear the plane to fly by summer.

Prosecutors are trying to determine whether Mr. Forkner knew about a key change that Boeing had made to MCAS that allowed the software to trigger in almost all phases of flight, and then did not give that information to the F.A.A.

MCAS was designed to activate only when the plane was making sharp turns at high speeds. But late in the development of the Max, Boeing engineers decided they needed MCAS to operate when the plane was flying at low speeds, too. To have the same effect on the plane at low speeds as it had at high speeds, the engineers gave the system more power.

In the messages from November 2016, Mr. Forkner seems to note that MCAS was triggering at low speeds.

“Oh shocker alert!” Mr. Forkner wrote. “MCAS is now active down to M .2,” he said, using a technical term that denotes a relatively slow flying speed.

Mr. Forkner’s lawyers, David Gerger and Matt Hennessy, have said that their client was reacting to the erratic behavior of a faulty flight simulator and did not mislead regulators.

“Mark didn’t lie to anyone,” they said in a statement. “He did his job honestly, and his communications to the F.A.A. were honest. As a pilot and Air Force vet, he would never jeopardize the safety of other pilots or their passengers. That is what any fair investigation would find.”

Mr. Forkner never told the F.A.A. group in charge of training that a change had been made to the software, The New York Times reported last year. And in emails with F.A.A. officials, he said that MCAS would only rarely activate. Two months after his experience in the flight simulator, Mr. Forkner emailed F.A.A. officials to ask that they remove mention of the software from official training materials, since he said it was so unlikely that it would ever trigger in normal circumstances.

“Delete MCAS,” Mr. Forkner wrote, “since it’s way outside the normal operating envelope.”

Prosecutors are also looking at whether there were broader cultural issues at Boeing that encouraged employees to lie to regulators. In January, the company released more than a hundred pages of internal correspondence in which employees ridiculed the F.A.A. and suggested that they had concealed information from the F.A.A.

In one particularly blunt message from 2018, a Boeing employee wrote, “I still haven’t been forgiven by God for the covering up I did last year.”

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The Price of Wells Fargo’s Fake Account Scandal Grows by $3 Billion

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Wells Fargo has agreed to pay $3 billion to settle criminal charges and a civil action stemming from its widespread mistreatment of customers in its community bank over a 14-year period, the Justice Department announced on Friday.

From 2002 to 2016, employees used fraud to meet impossible sales goals. They opened millions of accounts in customers’ names without their knowledge, signed unwitting account holders up for credit cards and bill payment programs, created fake personal identification numbers, forged signatures and even secretly transferred customers’ money.

In court papers, prosecutors described a pressure-cooker environment at the bank, where low-level employees were squeezed tighter and tighter each year by sales goals that senior executives methodically raised, ignoring signs that they were unrealistic. The few employees and managers who did meet sales goals — by any means — were held up as examples for the rest of the work force to follow.

“This case illustrates a complete failure of leadership at multiple levels within the bank,” Nick Hanna, U.S. attorney for the Central District of California, said in a statement. “Wells Fargo traded its hard-earned reputation for short-term profits, and harmed untold numbers of customers along the way.”

Now the bank is grappling with the lingering consequences. Part of Friday’s deal, which includes a $500 million fine by the Securities and Exchange Commission, is a deferred prosecution agreement, a pact with prosecutors that could expose the bank to charges if it engages in new criminal activity.

“We are committing all necessary resources to ensure that nothing like this happens again,” Wells Fargo’s chief executive, Charles W. Scharf, said in a statement on Friday.

The penalty, while large, is not record breaking. In 2015, a judge ordered BNP Paribas to pay nearly $9 billion for sanctions violations. Friday’s fine is not even the largest against Wells Fargo. In 2012, when the country’s five largest banks paid a total of $26 billion to state and federal authorities to settle investigations into their mortgage lending practices in the years leading up to the 2008 financial crisis, Wells Fargo’s portion was $5.35 billion. Including Friday’s penalty, the bank has paid more than $18 billion in fines for misconduct since the financial crisis.

Wells Fargo’s profits last year totaled nearly $20 billion.

Senior Justice Department officials told journalists in a briefing on Friday that the bank’s payments to other authorities, including $1 billion in fines to the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau in 2018, were a mitigating factor in determining how much it would owe in the current settlement.

The practices for which Wells Fargo is being punished in the current deal — which includes an admission by the bank that it falsified banking records — are not the only misbehavior the bank has revealed since 2016. Since they came to light in a settlement with California authorities and the Consumer Financial Protection Bureau, the bank has also admitted it charged mortgage customers unnecessary fees and forced auto loan borrowers to buy insurance they did not need.

Those matters are not part of Friday’s deal, and Justice Department officials declined to comment on whether they intended to take more action against the bank.

Wells Fargo is still under investigation by the consumer bureau over its practice of abruptly closing customers’ accounts, and has said in regulatory filings that the authorities are looking into improper fees it charged wealth management customers.

Friday’s deal is also unrelated to a continuing criminal investigation of former Wells Fargo executives’ individual roles in the sales practices scandal. On Jan. 23, the Office of the Comptroller of the Currency fined former top executives millions of dollars each for overseeing the bank while it abused customers. A former Wells Fargo chief executive, John G. Stumpf, agreed to pay $17.5 million, while others are fighting the cases brought by the regulator. One of them, Carrie L. Tolstedt, Wells Fargo’s former head of retail banking, faces a $25 million fine.

Justice Department officials said the settlement also did not include similar conduct that fell outside the 14-year period.

In early 2018, the Federal Reserve imposed growth restrictions on Wells Fargo that will be lifted only after the bank has shown its regulators that it has made significant changes to prevent bad behavior like the fake account scandal. Since taking over in October, Mr. Scharf has not offered any hints about when that goal might be accomplished.

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At Walgreens, Complaints of Medication Errors Go Missing

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Pharmacy employees at Walgreens told consultants late last year that high levels of stress and “unreasonable” expectations had led them to make mistakes while filling prescriptions and to ignore some safety procedures.

But when the consultants presented their findings at Walgreens’s corporate offices this month, there was no reference to the errors and little mention of other concerns the employees had raised.

That’s because senior leaders at Walgreens had directed the consultants to remove some damaging findings after seeing a draft of their presentation, a review of internal emails, chat logs and two versions of the report shows.

In one instance, Amy Bixler, the director of pharmacy and retail operations at Walgreens, told them to delete a bullet point last month that mentioned how employees “sometimes skirted or completely ignored” proper procedures to meet corporate metrics, according to the chat logs and the draft report.

A slide detailing “errors resulting from stress” was also removed. The consultants, a group from Tata Consultancy Services that was examining the company’s computer system for filling prescriptions, had included the slide among their “high level findings.”

Pharmacists in dozens of states have accused Walgreens, CVS and other major drugstore chains of putting the public at risk of medication errors because of understaffed and chaotic workplaces, The New York Times reported last month.

In letters to state pharmacy boards and in interviews with The Times, pharmacists said they struggled to keep up with an increasing number of tasks — filling prescriptions, giving flu shots, answering phones and tending the drive-through, to name a few — while racing to meet corporate performance metrics they characterized as excessive and unsafe.

The pharmacy chains have pushed back on the complaints, saying staffing was sufficient and errors were rare. Walgreens told The Times that its pharmacists knew “they should never work beyond what they believe is advisable.”

But the consultants heard similar complaints in interviews with workers at eight Walgreens pharmacies last year. Both versions of the consultants’ report noted “a widespread perception that there is not enough time to respond to all pharmacy tasks.”

In the deleted slide on stress-related errors, the consultants wrote, “We were told that pill bottles had been found to contain more than one medication.”

They said they “heard multiple reports of improper behavior” that was “largely attributed to the desire” to meet a corporate metric known as “promise time,” which ensures that patients get prescriptions filled within a set amount of time.

The Times reported last month that such metrics often factor into employee bonuses and performance reviews.

The final presentation was delivered about two weeks ago at the drugstore chain’s corporate campus in Deerfield, Ill. The consultants had been seeking approval of the research report from various departments at Walgreens. They have since moved to the next step in the project — improving the pharmacy’s computer system.

A Walgreens spokesman, Jim Cohn, said the Tata consultants had been helping the company get a “better understanding” of how employees used the computer system.

The draft report, he said, included “information gathered through informal engagement with staff at a handful of stores.” Changes reflected in the final version were intended “to help ensure that the report appropriately focused on the most relevant aspects of the technology and user experience,” he said.

Mr. Cohn added that Walgreens took “any concerns seriously to ensure the appropriate parties are aware and working to address them.”

A spokesman for Tata Consultancy Services, a major information technology firm based in India, declined to comment. The company recently announced it had signed a $1.5 billion deal to run Walgreens’ technology operations.

Like Walgreens, CVS — the country’s largest pharmacy chain — has disputed assertions from some employees and state boards that its drugstores are understaffed and overburdened.

In a statement posted on its website last month, CVS said, “We fundamentally disagree with the recent assertion in The New York Times that patient safety is at risk in America’s pharmacies.”

Since then, the Oklahoma State Board of Pharmacy released a complaint against a CVS pharmacy in Owasso, a suburb north of Tulsa, regarding a medication error made last year. The board took the rare step of citing the pharmacy in addition to the pharmacist involved in the error.

The Oklahoma board cited inadequate staffing in its investigation of the mistake, which involved a young man who received only one-fourth of his prescribed dose of anticonvulsant medication, according to the complaint.

The patient’s father discovered the error, but only after the young man had taken the incorrect dose for about 18 days, during which his seizures became more frequent and more violent, according to the complaint. His mother reported that during one seizure, he fell and gashed his forehead.

After the mistake was reported to the pharmacy board, an investigator for the state checked 200 prescriptions at the Owasso pharmacy for accuracy and found a 9.5 percent error rate, according to the complaint. Some errors were minor — like portions of directions that were missing — but others were more significant. A patient was told to take the wrong dose, for instance: one tablet instead of one-half.

The board wrote in the complaint that it had received “several letters of concern from various CVS employees regarding the lack of adequate staffing” at the company’s pharmacies.

Across the country, pharmacists who work at CVS and elsewhere have reported that their corporate offices have cut the hours of technicians who help behind the counter, and have pared back or eliminated shifts with overlapping pharmacists.

The Oklahoma investigator, who was at the Owasso CVS for three and a half hours, noted that the phone rang “almost constantly, with rarely a five minute break in between calls and several instances of more than one line ringing at a time,” according to the complaint.

The investigator also observed “almost constant foot traffic” in the store and a routinely packed drive-through.

The complaint states that on the day of the error involving the anticonvulsant medication, the pharmacist on duty was responsible for checking 194 prescriptions in a six-hour shift — about one every two minutes.

The store’s lead pharmacist told the state board that he had no control over staffing. He had complained about staffing to his district leader, but the district leader also had no power to make changes, according to the complaint.

He said that CVS had “almost completely eliminated pharmacist overlap” — meaning that only one is on duty at a time — and that pharmacists at his store worked about 20 to 30 hours per week unpaid so their colleagues were “not left in an impossible situation.”

He also said that internal reports for less severe errors were sometimes not completed because of a lack of time created by staffing issues.

CVS faces up to $75,000 in fines and possible suspension or revocation of the Owasso pharmacy’s license. The matter is scheduled for review at the pharmacy board’s meeting in May.

A CVS spokesman said the company looked “forward to addressing the allegations” at the upcoming hearing, adding that “our record of patient safety is outstanding and we are committed to continuous improvement.” CVS and other chains have declined to provide their error rates.

In a letter to employees after The Times’s article last month, Larry Merlo, the chief executive of CVS Health, said he was “deeply disappointed by the article’s portrayal of our company and industry.”

But this week, a company spokesman said that in response to the article, CVS planned to examine its metrics, both the quantity and how they are used to assess pharmacists.

A group called Pharmacist Moms, which says it represents 32,000 female pharmacists, also responded to the article, posting a letter on its website and social media accounts that said, “We feel strongly that patient safety may be compromised due to the overly stressful working conditions at chain pharmacies.”

The group’s founder, Suzanne Soliman, said in the letter, “Pharmacists work in difficult and demanding conditions and are often unable to voice concerns over patient safety.”

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FreshDirect, After Broken Eggs and Angry Customers, Stages a Comeback

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About a year and a half ago, longtime patrons of the pioneering grocery delivery service FreshDirect started complaining that orders were arriving hours late. There were broken eggs and spoiled fruit. One customer reported that she had paid $200 for groceries — only to receive nothing but seltzer and a loaf of bread.

The source of the problems was FreshDirect’s multimillion-dollar headquarters in the Bronx, a distribution center with nine miles of conveyor belts that the company opened in the summer of 2018 after moving out of a smaller facility in the Long Island City section of Queens. A complex automated system was creating confusion on the floor of the new warehouse, resulting in canceled orders, missing items and long waits.

At the height of the crisis, FreshDirect’s chief executive, Jason Ackerman, stepped down and was replaced by David McInerney, who had helped run the company since the early 2000s. Over the next months, FreshDirect made logistical fixes that gradually eliminated the distribution problems. But plenty of damage had been done.

“We had so much trust, we could’ve built a bank of trust,” Mr. McInerney said in a recent interview. “Over time, that trust was eroded.”

Something else also eroded as FreshDirect struggled: its hold over the grocery delivery industry in New York. Over two decades, FreshDirect had accumulated a loyal following of well-to-do Manhattanites as one of the first companies in the country to execute a successful grocery delivery operation. Now, however, it faces an increasingly wide array of rivals, including Amazon, which owns Whole Foods and won over a number of FreshDirect’s customers during the chaotic transition to the Bronx.

“When FreshDirect first started, they didn’t have the competition that they have now,” said Phil Lempert, a retail and grocery analyst. “They have 100 things working against them.”

While it remains the most popular online grocery service in New York, FreshDirect’s share of the market dropped to 46 percent at the end of last year, from roughly 66 percent in 2017, according to the research firm Second Measure. Over the same period, Amazon’s share nearly tripled to around 22 percent, from a little under 8 percent. Rivals like Instacart and Stop & Shop’s Peapod brand also made up ground.

“Amazon will take more and more of FreshDirect’s sales,” said Burt P. Flickinger III, a retail and supermarket consultant. “It’s the proverbial David versus Goliath story.”

On some level, FreshDirect’s struggles are a normal evolution: A start-up pioneers a new business, before well-funded imitators gradually overtake it. But the company’s future also represents a test of whether Amazon, with its deep pockets and vast logistical infrastructure, can dominate fresh food, a market in which regional companies like FreshDirect have historically thrived.

Last month, the supermarket chain Fairway, another New York institution, filed for bankruptcy for the second time in five years, blaming the increased competition from national retailers like Amazon and Trader Joe’s. In the fall, the asset-management arm of JPMorgan Chase, which led a $189 million investment in FreshDirect in 2016, discussed selling its stake with a handful of regional and national grocery chains, according to Mr. Flickinger, who said he had discussed the matter with some of the chains that JPMorgan approached. (He declined to name the chains; the talks were previously reported by The New York Post.)

Still, Mr. McInerney insists he is not worried about FreshDirect’s competitors. The company has been profitable in the past, though a spokeswoman declined to reveal any details about its current financial performance, except to say it is “showing double-digit revenue growth.” In 2017, FreshDirect generated $600 million to $700 million in sales, according to news reports.

FreshDirect did not dispute that JPMorgan had discussed selling its stake, though Mr. McInerney said the company had no “immediate plans” to be acquired by a competitor. (JPMorgan’s asset-management branch declined to comment.) At the moment, FreshDirect delivers to New York, New Jersey and Washington, D.C., as well as some parts of Connecticut, Pennsylvania and Delaware. But Mr. McInerney, a loquacious and energetic former chef, has an expansive vision for the company’s future — a delivery empire stretching from Washington to Boston.

“Our goal is really to control the Northeast corridor,” he said. “If I were to look into the future, there could be a bifurcation of shopping, where people are buying packaged goods in one place and fresh food in another.”

That’s an argument grocers across the United States make with increasing regularity, hoping that culinary expertise and locally sourced supply chains will allow them to compete with the logistical superiority of Amazon. In November, Kroger changed its slogan to “fresh for everyone” — a branding move that experts say was intended to emphasize its advantages over online rivals that have less experience supplying fresh food.

“A lot of the big supermarkets are making sure that they have higher-quality fruits and vegetables, higher-quality prepared food, higher-quality deli counters,” said Judah Frommer, a grocery industry analyst at Credit Suisse. “That’s a lot of the way that local grocers are combating Amazon.”

FreshDirect, of course, has no retail stores. Its carefully selected meats, cheeses and produce are delivered from distribution centers like the warehouse in the Bronx and a separate facility in Prince George’s County in Maryland.

Over the last 18 months, the company has made a series of adjustments to regain the trust of customers who felt burned by the delivery issues in 2018. In the past, customers who reported missing items received store credit and an apology. Now, FreshDirect offers to deliver missing items immediately, at no extra cost. And first-time customers get their groceries in a different color bag than a regular delivery, so FreshDirect’s drivers know to be especially careful.

But most of all, FreshDirect has staked its future on providing high-quality fresh food from around the world. On a recent afternoon, Mr. McInerney bounded through the Bronx warehouse, grabbing passing colleagues by the shoulders and enthusiastically shaking their hands. Then he stopped next to a box of unusually large blueberries.

Before becoming chief executive, Mr. McInerney served as FreshDirect’s “chief food adventurer,” traveling widely with a team of food merchants to scout new products. On one trip, he said, he visited FreshDirect’s blueberry supplier, David Jackson, at his farm in California. In a shed where blueberries were being packed into boxes, Mr. McInerney noticed that some berries were larger than others.

“I said, ‘Dave, could you sort out just the biggest ones for me?’” he recalled. And so FreshDirect’s signature “jumbo blueberries” were born.

“It was only because we had boots on the ground that we saw that, something the farmer may not think of on their own,” Mr. McInerney said.

Mr. McInerney tells a similar origin story about FreshDirect’s eggs — except, in that case, he picked out an unusually small, especially flavorful variety.

But no matter how flavorful, eggs have to arrive intact for customers to continue ordering them. And after the switch to the Bronx, such basic requirements became challenging for FreshDirect. Food was out of stock. Orders arrived late or went missing. Customers were furious.

The logistical chaos was largely the result of insufficient planning and a rushed transition to the new facility, which was much larger and more complex than the Long Island City headquarters, according to six people familiar with FreshDirect, including several current and former employees.

It was also in line with a broader lack of organization across the company. For years, former employees said, FreshDirect’s website had been unwieldy, making it difficult and time-consuming to post updates.

After the initial issues at the new headquarters, FreshDirect become better organized and more streamlined, with the help of a consultant at AlixPartners, Holly Etlin. For one thing, meetings became more efficient, according to a former employee. Ms. Etlin was a stickler for punctuality and barred employees from having laptops out during meetings she attended. (Ms. Etlin declined to comment.)

“Like many businesses facing a transition, we had enlisted internal and external expertise to make sure we emerged in an even better position to grow,” said Sabrina Strauss, a spokeswoman for FreshDirect. “They helped us on an interim basis to support our business and keep us on a positive trajectory.”

Now FreshDirect is looking to move past its problems in the Bronx. Mr. McInerney professes to be more interested in fresh fish and poultry than potential acquisitions or competition from Amazon.

“What we do is focus on what we do well,” Mr. McInerney said. “Which is fresh food.”

In a storage room in the Bronx headquarters, he took out a box containing a large halibut, digging through a layer of ice crystals until the glistening scales emerged.

“That’s a gorgeous fish,” he exclaimed, lifting it out of the box. “Look at how beautiful that is. This fish came out of the water yesterday.”

He put it back down.

“Pretty cool, right?”

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What Happened Between E. Jean Carroll and Elle Magazine?

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In the fall of 2017, when Nina Garcia, the fashion editor and “Project Runway” judge, became the editor in chief of Elle magazine, E. Jean Carroll felt she needed to fight for her job.

Ms. Garcia was remaking the staff and was scaling back on lucrative contracts the magazine offered freelance contributors like Ms. Carroll, who had written the Ask E. Jean advice column since 1993.

But rather than dash off a pleading email, as many writers might, Ms. Carroll did something more in line with her outsize personality: She showed up at the offices of Hearst Magazines, the publisher of Elle, with a stack of hula hoops. “I said, ‘Here’s some hula hoops, let’s get it going girl!’” she recalled in a phone interview.

Ms. Garcia appeared to love it.

“Oh, my God, I adore E. Jean!” she said in a 2018 interview, about a year after taking over. “She’s just so perfect for this generation. Her voice is so modern, quirky, and cheeky. While everybody on Twitter thinks they could be the E. Jean, she is the E. Jean!”

The same month that the interview ran, Ms. Garcia agreed to provide a blurb for Ms. Carroll’s forthcoming memoir, “What Do We Need Men For?,” praising her work at Elle. At that point, Ms. Carroll had shared the book’s contents with very few people, and Ms. Garcia had not read it.

“E. Jean Carroll is a force of nature, whose natural vibrancy has held readers in rapture for decades,” read Ms. Garcia’s blurb, which was printed on the back cover.

In the book, which recounts stories from her life, Ms. Carroll accuses Donald Trump of raping her in a department store dressing room in the mid-1990s. The details were revealed in an excerpt in New York magazine in June of 2019, just before the book was published, and quickly picked up by news outlets around the world.

Mr. Trump denied ever meeting Ms. Carroll, calling her a liar. (“She’s not my type,” he told The Hill.) Several months later, she filed a defamation suit against him. She argued he had damaged her reputation and her career by denying that her story was true, and by saying that she took money from his political opponents to fabricate the allegation.

Elle covered the story, reporting on her book’s revelations and the reaction to them on its website. It also ran a column in print (but not online) last fall in which Ms. Carroll explained why she had decided to come forward at last.

But by December 2019, Elle’s regard for its columnist had changed. Ms. Carroll, 76, was contacted by a Hearst editor, Erin Hobday, who asked if she was free for a call; Ms. Carroll thought she was being invited to the company holiday party.

Instead, she was informed that her contract, which was supposed to go through July of this year, was being terminated. She was asked to invoice for the remaining four columns, which would not be published and for which Ms. Carroll said she still has not been paid.

“We and your readers so appreciate your many years of work for the magazine, and the wonderful columns you contributed to our publication,” Ms. Hobday wrote in an email, adding: “We will miss you tremendously.”

On Feb. 18, Ms. Carroll wrote on Twitter: “Because Trump ridiculed my reputation, laughed at my looks, & dragged me through the mud, after 26 years, ELLE fired me. I don’t blame Elle. It was the great honor of my life writing ‘Ask E. Jean.’ I blame @realdonaldtrump.”

Earlier that day, her lawyers had disclosed in a court filing in connection to her defamation suit against Mr. Trump that Elle had killed the Ask E. Jean column, which had been published virtually every month for 26 years.

In response to a list of questions sent by The New York Times, a Hearst spokeswoman emailed a statement. “E. Jean Carroll was long a beloved voice in the pages of Elle, the decision not to renew her contract was a business decision and had nothing to do with politics,” it said.

Even if Ms. Carroll did not blame Elle, others did, and were quick to say so. Soon, the hashtag #BoycottElleMagazine began appearing on Twitter.

“Extremely disappointing from the woman’s mag that historically has done more hard hitting reporting and taken stands than most,” Clara Jeffrey, the editor of Mother Jones magazine, wrote on Twitter.

“If you ever wondered whether women’s magazines are really on the side of women, I think this says all we need to know,” said Nancy Jo Sales, a magazine writer.

Many editors who have worked with Ms. Carroll say Elle has lost an important voice. “E. Jean is an American original and to many, an icon,” said Robbie Myers, the longtime editor of Elle, before Ms. Garcia.

“E. Jean was just so beloved,” said Maggie Bullock, a former deputy editor at Elle. “It seems really sad that a women’s publication that had the chance to align itself with a woman who was speaking her truth — and speaking truth to power — in a time like this, chose not to. What a shortsighted thing to do.”

But inside the Hearst building in Midtown Manhattan this week, some journalists quietly fumed at what they saw as an inaccurate portrayal.

More than a dozen current and former Hearst employees, who spoke to The Times anonymously for fear they would face repercussions in their jobs, attributed Ms. Carroll’s contract termination, at least in part, to a steep paycheck and a break in convention: Ms. Carroll had given away the news-breaking excerpt from her book to New York magazine — not Elle. (The New York cover story, “Hideous Men,” was edited by Laurie Abraham, one of Ms. Carroll’s former editors at Elle. Ms. Abraham now works at The Atlantic.)

Some said that Ms. Carroll’s contention that Mr. Trump’s insults cost her the columnist job was self-serving, since her defamation lawsuit against him will require her to prove she has been damaged by his remarks.

Ms. Carroll dismissed those comments. “The lawsuit is for all women who have been harassed, who cannot speak up and don’t have the money to sue,” Ms. Carroll said. “I am speaking out now for the women who have spoken out and have met their doom. Sometimes you speak out against a man in power and you lose your job.”

Ms. Carroll has been credited with helping to shape the advice column genre and voice, inspiring modern-day iterations like Ask Polly, published by New York magazine, and “Dear Sugars” an advice column turned podcast.

“She didn’t just toss off a bunch of fluff — she used research, referenced current events and politics, interviewed experts and actually gave real advice that often was as much about helping get a woman’s career on track as a relationship,” said Ms. Bullock, the former Elle editor, now a freelance writer. “Early on, Jean was inclusive and, you could argue, ‘woke.’”

But the days of lucrative magazine contracts are largely a thing of the past. When Ms. Garcia took over Elle, Ms. Carroll was being paid $120,000 a year for 12 columns of about 1,800 words each. (At about $5.50 per word, that was more than twice the $2 per word usually paid to Elle’s freelance writers for the print magazine.)

When Ms. Carroll’s contract came up for renewal during Ms. Garcia’s first year, editors went to bat for Ms. Carroll, arguing that her column had become synonymous with the Elle brand.

Ms. Garcia gave Ms. Carroll a new contract: $60,000 per year for 12 columns of 900 words.

The changes at Elle, many of them in response to the economic challenges of the magazine industry, reflect big shifts at its parent company, Hearst, which is also facing tension with employees who recently unionized.

In 2018, David Carey, the president of Hearst Magazines for eight years, stepped down. Troy Young, who had previously overseen the company’s digital efforts, succeeded him. Since then, most of the high-profile editors who served under Mr. Carey have left. (In 2019, Mr. Carey was named by Hearst Corporation as senior vice president of public affairs and communications.)

Ms. Garcia has worked to put her own stamp on Elle. She has made the magazine more visual, and amped up its social media presence. She has dedicated less space to political features, which had been a hallmark of Elle under its previous editors. Its annual women-in-Washington “Power List” magazine feature and awards dinner was canceled under Ms. Garcia.

She has also worked hard to avoid ruffling feathers, according to some current and former employees. In a 2017 article about Whitney Wolfe, the founder of the dating app Bumble, several paragraphs detailing her perspective on feminism were removed from the digital version of the article after Ms. Wolfe complained that the quotes were taken out of context, according to four former staffers who were aware of the discussions. (Later, Hearst worked with Bumble to start Bumble Mag.)

Last winter, a profile of Dr. Jen Gunter, the ob-gyn (and New York Times columnist) who has been a critic of Gwyneth Paltrow and Goop, was killed after top editors expressed concern that it might upset Ms. Paltrow and her publicist Stephen Huvane, who represents a variety of celebrity clients, according to three former staffers. (Ms. Paltrow appeared on a November 2019 cover of Elle.)

Sources also said a profile of Lara Trump, the president’s daughter-in-law, was published in the print magazine but not on the Elle website because of fear it would stoke rage online.

After sending the statement about Ms. Carroll, Hearst did not respond to questions about these editorial decisions.

By the time Ms. Carroll was deciding where to excerpt her book — and publish her accusation that the sitting president had raped her years before — Ms. Carroll didn’t consider Elle.

“Under Nina, Elle has been less into politics or news,” Ms. Carroll said. “Nina’s Elle is a fashion magazine. So I went with New York magazine, which knows how to break news.”

That decision was revealed to Elle editors over drinks at the Russian Tea Room last spring, where Ms. Carroll and a few of the editors had gone to celebrate the upcoming publication of her book. It was there that she told the editors what the book was about — including what she had written about Mr. Trump — and that an excerpt containing this revelation would be running in New York magazine.

“They were extremely disappointed,” Ms. Carroll said of the Elle editors.

They told Ms. Carroll that they were shocked, both by what she said had happened to her and by the fact that she had not given Elle first dibs on the excerpt.

By the terms of her contract, Ms. Carroll was not required to offer her story to Elle. But she agreed to help facilitate a phone call between Elle editors, her agent and a representative of her book publisher.

The excerpt still was published by New York.

When it came time to make budget cuts this past December, Hearst employees said, few felt lingering loyalty to Ms. Carroll. That’s when Ms. Hobday told her she had been cut loose.

In a statement, Ms. Garcia, said: “E. Jean and I have known each other for more than two decades and she will always be part of the Elle DNA. We applaud and support her for coming forward with telling her story. The response to her allegations were not a factor in not renewing her contract.”

Ms. Carroll is under no illusion that she was carrying the magazine into the next era. “I AM old, unhip and uncool, yes,” she wrote on Twitter. But she doesn’t believe Elle gave her the boot simply because it couldn’t afford her. “I would have taken a new contract for less money,” she said.

By Thursday, Ms. Carroll said she had received inquiries from four other publications asking if she would consider writing for them.

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Condé Nast to Limit the Use of NDAs

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Condé Nast, the publishing giant behind Vogue, The New Yorker and Vanity Fair, said on Friday that it would no longer use nondisclosure agreements for matters involving harassment and discrimination.

Stan Duncan, the company’s chief people officer, laid out Condé Nast’s new stance in a memo to employees that was shared with The New York Times.

“There are legitimate arguments in favor of NDAs in certain circumstances, which is why their use remains widespread — confidential settlements can spare both employees and employers the cost of litigation, and maintain privacy for all involved,” Mr. Duncan wrote. “However, given our company’s values and commitment to transparency, we have decided that going forward, we will no longer enter into NDAs that prevent an employee from making a disclosure of conduct they were subjected to that they believe, in good faith, constitutes harassment, discrimination, or retaliation. We also expect to release existing NDAs in these matters.”

The executive added that the company would release people from existing nondisclosure agreements related to those matters on a case-by-case basis.

The use of nondisclosure agreements across many companies for complaints of sexual harassment or discrimination has become a flash point in the wake of the #MeToo movement. The New Yorker has been at the forefront of the discussion: The magazine won a Pulitzer Prize in 2018 for Ronan Farrow’s investigation into decades of allegations of sexual misconduct by the film producer Harvey Weinstein, which involved the use of nondisclosure agreements to silence his accusers. (The Times reporters Jodi Kantor and Megan Twohey were also awarded the Pulitzer that year for their investigation into Mr. Weinstein.)

Mr. Weinstein is currently on trial, accused of rape, in Manhattan.

Nondisclosure agreements were a point of contention during the Democratic presidential primary debate in Las Vegas on Wednesday. Senator Elizabeth Warren criticized Michael R. Bloomberg for the use of nondisclosure agreements at his company, Bloomberg L.P. Mr. Bloomberg has refused to release some female former employees from agreements they signed after accusations of harassment and discrimination.

Condé Nast’s decision to step back from the use of nondisclosure agreements was first reported by The Daily Beast.

The News Guild of New York, which represents employees at the Condé Nast publications The New Yorker, Pitchfork and Ars Technica, said in a statement on Friday that its members applauded the announcement.

“NDAs represent a harmful practice that prevents journalists from holding accountable those who abuse their power — eroding a fundamental principle of journalism,” the statement said. “Thanks to tenacious reporting, we’re witnessing how the use of such agreements to conceal sexual harassment and discrimination creates unsafe workplaces.”

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Don’t Let the Wrong State Get Between You and Your Assets

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Gwyneth Paltrow, the actress who created the successful lifestyle brand Goop, said last summer that she and her new husband, Brad Falchuk, were living apart, on purpose. Although recently married, they had opted to maintain separate homes.

The practice, known as living apart together, dates at least to the 18th century, both among avant-garde artists bucking conformity and working people needing to sacrifice cohabitation for economic necessity.

In a recent interview in Harper’s Bazaar, Ms. Paltrow said they now live under the same roof. But the curiosity generated by her embrace of the practice gave lawyers and wealth advisers an opportunity to point to its risks. If a couple, wealthy or not, live in different legal jurisdictions, there can be a battle over which municipality’s or state’s laws prevail if they decide to divorce.

“The implications on a couple that is married and wants to dissolve the marriage, that’s where you’re seeing the ramifications of this,” said Michael Stutman, a founding partner of the law firm Stutman Stutman & Lichtenstein. He has represented clients in a living apart together arrangement who filed papers in the county or state that would grant them more favorable treatment in a divorce.

Divorce is not the only area where choosing one state over another can make a huge financial difference. For certain financial transactions, people can benefit from a state’s favorable laws without even living there.

It has gotten to the point where some states have begun promoting their ability to offer better protection than their rivals.

The competition has also had a leveling effect; “state shopping” is no longer a tactic of the megarich. Merely affluent people looking for a better financial deal for current or future assets now have multiple, cost-effective options.

But not doing your due diligence can have unintended consequences. “State law makes a difference,” said Michael Roberts, president of Arden Trust Company in Atlanta. “If you have not planned, the state has a plan for you.”

Here are four areas where picking the right state matters as much as choosing the best financial plan.

When it comes to divorce, a couple with homes in two states, like California and New York, can face vastly different treatment of marital assets. California is a communal property state, where assets are split in half; New York is what is called an equitable distribution state, meaning there is more latitude in deciding who gets what.

Mr. Stutman recently represented a wealthy husband who was living and working in California while his wife lived in New York. When the marriage dissolved, Mr. Stutman said, he acted quickly to file the divorce papers in New York before the wife’s lawyer could file in California.

“It was a nine-figure pot of money, and the difference between the two states was eight figures,” he said. “It’s a bit of a race to the courthouse.”

The risk of living apart together exists for people in the same state but different counties. Mr. Stutman said a New York couple could file in any county in the state. Suffolk County, which encompasses the wealthy towns that make up the Hamptons, has traditionally been more favorable to the spouse who earned the money, particularly if the couple owned a home there.

Sometimes, the state will make decisions for a couple living apart together. In financial matters, for instance, most states will choose a sibling or a descendant over a partner living in a separate residence, Mr. Roberts said.

“If you’re living apart together and you want this person to be the beneficiary of your estate, then you need to have a will and spell this out,” he said. “If you don’t, it may end up with your brother that you can’t stand.”

States also have different views on being private and keeping secrets. Delaware allows for trusts to be set up so beneficiaries don’t know they exist until an age determined by the person creating the trust.

Other states require that beneficiaries be told of the trust on their 18th or 21st birthday. In Delaware, a person could be kept in the dark until 30 or 40 or later.

“Parents don’t want to tell someone at 18 that they have this multimillion-dollar trust if they can wait until their mid-20s or early 30s,” said Joshua S. Miller, senior wealth strategist and managing director at CIBC Private Wealth in Boston. “They want kids to get out of college, get a job, start working a bit, mature.”

Mr. Miller said he counseled clients not to let a trust be silent for too long. “A silent trust is a tool,” he said. “I feel strongly that values, legacy and stewardship are really important. I ask clients, ‘Are you able to talk openly about your wealth?’”

Long ago, people went to foreign jurisdictions, like Switzerland or the Cayman Islands, to protect their wealth from creditors. But states have long since caught up, with Delaware, Nevada, New Hampshire and South Dakota revamping their trust laws to compete for high-net-worth individuals who want to shield their assets.

No state allows money to be shuffled into a trust in response to a lawsuit, a practice called fraudulent conveyance. But several states allow the transfer of money into a trust that would be protected after a period of, say, 18 months. A legitimate use could be by doctors or contactors who might be sued in the course of their career.

The money, though, cannot be commingled with other assets, said Matthew Hochstetler, a trusts and estates lawyer at David J. Simmons & Associates who practices in Ohio and Florida. And the process needs to look reasonable. He said he would advise clients to move no more than 50 percent of their wealth into an asset protection trust.

Bankruptcy judges do not look kindly on people who have separated assets for protection in a state like Nevada and cannot pay their debts in the state where they live.

“Bankruptcy judges love to put you in jail and hold you in contempt,” said Jerome M. Hesch, a retired law professor who runs a tax and estate planning institute at the University of Notre Dame.

But this is where the courts pit state against state. Generally, exceptions are made in the cases of alimony or child support, but states that allow self-settled trusts — in which the people setting them up are also the beneficiaries — have been challenged for not validating those support exceptions, particularly when the beneficiary lives in a different state.

“If you happen to live in a state with special asset-protection laws, there is nothing stopping you from taking advantage of your own state’s laws,” said Justin Miller, national wealth strategist at BNY Mellon (and no relation to Joshua Miller). “The real question, though, is whether individuals can set up a trust for themselves in a state where they don’t live and still avoid their own state’s law. Will your state respect it?”

Moving from a high-tax state to a one with low or no income tax is a well-known strategy. Of course, it requires the taxpayer to move. But there are other ways to save on income tax and still stay home.

Pulling certain assets out of high-income tax states like California and putting them into trusts in states with no income tax can save a huge amount of money. The highest rate in California is 13.3 percent; the rate in New York State and New York City combined can go up to 11 percent. Not paying that tax can be an enormous boost to an investor’s portfolio gains.

“All income reported by a Nevada or Delaware trust pays federal income taxes but no state income tax,” Mr. Hesch said. “If the people don’t need the money, it accumulates for the future.”

The only caveat is that the losing state does not always take the loss gracefully.

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