Good morning. RTX has set aside $1.24 billion to resolve a series of government investigations into its business practices, including a bribery probe sparked by allegations of corrupt dealings with a member of Qatar’s ruling royal family, Risk & Compliance Journal's Dylan Tokar reports.

• Major step: The $1.24 billion figure is a significant step up from RTX’s prior estimates of the potential costs associated with its continuing legal matters. The company previously set aside around $300 million, including for a separate Justice Department probe into claims that it misled officials on pricing in connection with certain government contracts.
   
• Monitor coming: The settlements come with some additional restrictions for RTX. As part of each settlement, the company will be required to hire an independent monitor to oversee its compliance with the agreement.
   
• Continued cooperation: “While the financial impact of these items is above what we had previously reserved, we believe the provisions we have taken put these issues behind us financially, and we will continue to cooperate with the government and external monitors as we move forward,” Neil Mitchill Jr., RTX’s chief financial officer, said on an earnings call.

Merit, excellence and intelligence: an anti-DEI approach catches on.

From tech to tractors, companies are dialing back diversity, equity and inclusion efforts. Instead, a DEI alternative endorsed by Elon Musk could alter the fate of your next job application.

It’s known as MEI, short for merit, excellence and intelligence. The embrace of MEI by some prominent business leaders—including Coinbase CEO Brian Armstrong and Sequoia Capital partner Shaun Maguire—reflects frustration with corporate diversity initiatives.

Maersk Line agrees to U.S. settlement over whistleblower’s firing.

Maersk Line has agreed to a settlement with the U.S. Labor Department after the shipping company allegedly fired a seaman on a containership for reporting potential safety concerns such as broken gear and crew members possibly drinking alcohol onboard.

Maersk has agreed it won’t require its workers to raise concerns to the company before bringing them to the U.S. Coast Guard and won’t retaliate against employees reporting problems, the Labor Department said Thursday.

• Uber Technologies, Lyft and other companies that depend on gig workers scored a victory with California’s top court, affirming their independent-contractor model in the state, a decision that caps a yearslong legal battle over how their drivers should be classified.
   
• Kroger and Albertsons agreed to temporarily put their $20 billion deal on hold while antitrust enforcers pursue lawsuits to block it.
   
• Canadian grocery giant Loblaw Cos. and its parent company agreed to pay 500 million Canadian dollars, the equivalent of about U.S.$362 million, for their role in a decades-old bread price-fixing arrangement.
   
• The U.K.’s financial regulator fined an arm of Coinbase, saying the unit had enabled crypto trading by risky clients totaling hundreds of millions of dollars, stoking concerns about potential money laundering.

Insurers brace for claims from global tech outage.

As companies scrambled to recover from Friday’s global tech outage, their first call was to cybersecurity and tech staff. The next was to their insurers. 

Midsize companies without a big tech staff, and companies that have been acutely disrupted by delays such as airlines, are likely to feel the financial brunt of the impact from the weekend’s outages, insurers warn. Even so, some say they are confident that they can shoulder the costs.

• Russian and Chinese warplanes were intercepted off the coast of Alaska by U.S. and Canadian fighters Wednesday, marking the first time strategic bombers from the two U.S. adversaries have operated together near North America, a U.S. official said.
   
• Inflation has become a hard-to-shake feature of Russia’s war economy. Even as price rises have moderated across much of the developed world, Russia’s struggles with price stability are getting worse.
   
• Samsung employees strike and U.S. unions gear up to organize as semiconductors enjoy growth.
   
• Sentiment among German companies fell back this month, according to a survey, furthering signs that the eurozone’s most important economy is struggling to get back on track.

• The CrowdStrike global outage shows critical infrastructure is at the mercy of tech vendors doing everything right. That’s not a good bet. Here’s what tech leaders can do to reduce risks.
   
• Votes from the weakest talc claims against Johnson & Johnson could help the company end the mass cancer lawsuits it faces in bankruptcy court.
   
• The move to start disclosing payments from drug and medical-device companies to physicians a decade ago hasn’t curtailed corporate influence over doctors.
   
• AI has a seemingly insatiable appetite for energy, but some tech leaders say innovations could help offset rising energy demand and keep AI’s footprint in check.
   

🎧 Listen to PepsiCo’s sustainability chief detail the beverage and food giant’s regenerative agriculture investment and the journey to make its Lays chips sustainable from end to end.

• Southwest Airlines will soon assign seats on flights and sell some with extra legroom, making sweeping changes in a bid to broaden its appeal to passengers and boost revenue.
   
• Kamala Harris and Donald Trump escalated attacks on each other, setting up a brutal election campaign with either side painting the other as a threat to the country’s future.
   
• Members of Team USA, in Paris for the Olympics, are now discovering what generations of American tourists have encountered on their European vacations: When you ask for A/C in France, you’re more likely to receive a giant Gallic shrug.
   
• France’s rail network was the target of a major act of sabotage Friday, the day of the opening ceremony of the Olympic Games, officials said, bringing service on several high-speed rail lines to a halt in disruptions that are expected to last for days.
   
• Wooden pallets keep global supply chains humming, carrying everything from soda cans to washing machines. Yet millions of these portable platforms go missing every month, either lost, stolen or broken. Enter the “pallet detectives.”
   
• California Gov. Gavin Newsom issued a directive calling for cities to take down homeless encampments after the Supreme Court expanded the authority of municipalities to dismantle the camps.

Follow us on X at @WSJRisk. Follow Risk & Compliance editor David Smagalla @DSmagalla_DJ and reporters Mengqi Sun @_MengqiSun, Dylan Tokar @dgtokar and Richard Vanderford @VanderfordRich.

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