WEBVTT - Is the U.S. Bankruptcy Code Racist? 0:00:00.480 --> 0:00:12.000 You're listening to Bloomberg Law with June Grasso from Bloomberg Radio. 0:00:15.480 --> 0:00:19.880 And the protests of racial inequality have been heard from Kenosha, 0:00:19.920 --> 0:00:24.319 Wisconsin to Rochester, New York. And the economic impacts of 0:00:24.400 --> 0:00:29.400 COVID nineteen, from job losses to business closures, have disproportionately 0:00:29.440 --> 0:00:33.400 affected Black Americans as much as the virus itself has. 0:00:33.800 --> 0:00:37.599 Even the last resort, the lifeline of bankruptcy, may not 0:00:37.680 --> 0:00:41.040 be equipped to give black debtors a fresh start. My 0:00:41.159 --> 0:00:44.400 guest is Michelle Dickerson, a professor at the University of 0:00:44.440 --> 0:00:48.080 Texas at Austin Law School and an early researcher on 0:00:48.240 --> 0:00:52.800 race and bankruptcy. Michelle, dozens of academic studies show that 0:00:52.920 --> 0:00:56.600 Blacks file for bankruptcy more than any other racial group, 0:00:57.000 --> 0:01:02.440 yet get less permanent relief. Can you explore there are 0:01:03.000 --> 0:01:06.399 a number of reasons why that may be happening. The 0:01:06.440 --> 0:01:08.760 reason I phrase the answer that way is because the 0:01:08.840 --> 0:01:14.160 studies themselves weren't able to pinpoint exactly why that is occurring. 0:01:14.800 --> 0:01:19.160 But one thing that we're seeing painfully during COVID right 0:01:19.160 --> 0:01:23.480 now is that Blacks in this country for a whole 0:01:23.520 --> 0:01:28.800 host of reasons, meaning because of systemic racism, profile worth 0:01:29.160 --> 0:01:36.199 financially lower savings rates, lower household income, higher students loans rates, 0:01:36.240 --> 0:01:41.160 so it's not terribly surprising that blacks would have higher 0:01:41.280 --> 0:01:44.240 filing rates. One of the academic studies a few years 0:01:44.240 --> 0:01:51.720 ago suggested that blacks were being steered into Chapter thirteen, 0:01:52.080 --> 0:01:55.480 which is a bankruptcy plan where you repay your bills 0:01:55.600 --> 0:01:58.160 or like some of your bills over a five year period, 0:01:58.600 --> 0:02:02.240 as opposed to Chapter seven, which is a much quicker 0:02:02.280 --> 0:02:06.440 and easier process, so to the extent that blacks profile 0:02:07.080 --> 0:02:11.239 as more financially fragile, and then they pushed into chapter 0:02:11.320 --> 0:02:15.239 thirteen and told try to repay your bills. That would explain, 0:02:15.480 --> 0:02:18.800 at least for me, why you have more blacks filings 0:02:18.800 --> 0:02:22.840 but fewer blacks actually getting the release that bankruptcy is 0:02:22.880 --> 0:02:26.000 in series supposed to provide. Why do you think blacks 0:02:26.000 --> 0:02:30.760 are being steered to chapter thirteen if chapter seven would 0:02:30.800 --> 0:02:34.440 work better for them? Again, I'll say that the studies 0:02:34.520 --> 0:02:38.679 were not able to say why. Lots of theories, and 0:02:38.720 --> 0:02:42.959 again they're just series. One theory could be that the 0:02:43.560 --> 0:02:49.000 bankruptcy professionals, whether we're talking about lawyers or trustees or judges, 0:02:49.600 --> 0:02:54.360 may have concluded that somehow chapter thirteen is better for 0:02:54.520 --> 0:02:58.440 blacks the chapter seven. That makes no sense because, at 0:02:58.480 --> 0:03:00.919 least for the academic studies, the one that was done 0:03:00.919 --> 0:03:04.079 about five or six years ago actually probably closer to ten. Now, 0:03:04.480 --> 0:03:09.200 it certainly seemed as if whites were being steered away 0:03:09.280 --> 0:03:13.520 from chapter thirteen and two chapter seven, whereas blacks were 0:03:13.560 --> 0:03:17.560 being steered two chapter thirteen and away from chapter seven. 0:03:18.200 --> 0:03:22.520 Whether racial biases are playing a role, we don't know, 0:03:22.560 --> 0:03:25.320 at least we don't know from the studies, but it 0:03:25.480 --> 0:03:29.320 is hard to imagine why it would be deemed better 0:03:29.400 --> 0:03:32.920 for blacks to attempt to repay their bills but not 0:03:33.320 --> 0:03:37.120 for whites to attempt to repay their bills. So, for 0:03:37.160 --> 0:03:39.680 those who are not in the know, would you explain 0:03:39.760 --> 0:03:43.440 a little more about the differences between chapter thirteen and 0:03:43.560 --> 0:03:48.120 chapter seven and why more people actually get out of 0:03:48.160 --> 0:03:53.440 bankruptcy with chapter seven. Yeah, chapter seven is a much 0:03:53.680 --> 0:03:57.840 quicker process to sort of, you know, phrase the colloquially. 0:03:57.880 --> 0:04:00.720 This is not what the bankruptcy Code says, but essentially 0:04:00.720 --> 0:04:05.000 the debtor says, Look, I don't have much property that 0:04:05.080 --> 0:04:07.760 I'm trying to keep. I want this to be a 0:04:07.840 --> 0:04:12.680 quick and simple process. Here's the little property that you 0:04:12.760 --> 0:04:15.920 are allowed to get as creditors that the code says 0:04:15.960 --> 0:04:18.479 I don't get to keep. Take a little amount that 0:04:18.560 --> 0:04:23.000 you're allowed to get creditors, and discharge my debt. So 0:04:23.040 --> 0:04:28.800 it's a quick process. In contrast, Chapter thirteen, even if 0:04:28.839 --> 0:04:32.320 it is successful and the success rates are not great 0:04:32.320 --> 0:04:34.719 in terms of the number of people that actually make 0:04:34.800 --> 0:04:37.679 all of the payments over five year periods. But Chapter 0:04:37.760 --> 0:04:41.320 thirteen can last for up to five years. That's a 0:04:41.560 --> 0:04:46.360 very different process and a very different thing also psychologically, 0:04:46.880 --> 0:04:50.440 because effectively, in Chapter thirteen, you have to be able 0:04:50.480 --> 0:04:54.280 to get I am going to be able to repay 0:04:54.320 --> 0:04:58.960 a certain percentage of my bill over up five year period, 0:04:59.760 --> 0:05:02.080 not knowing that am I going to have the same 0:05:02.160 --> 0:05:05.240 jobs in five years? I mean, imagine if people had 0:05:05.360 --> 0:05:10.240 entered into a Chapter thirteen plan in November of nineteen 0:05:10.480 --> 0:05:13.440 only to have COVID hit and they lose their jobs. Well, 0:05:13.440 --> 0:05:16.440 COVID obviously is sort of the once in a lifetime 0:05:16.960 --> 0:05:21.080 at least we cope economic and health pandemic. But for 0:05:21.440 --> 0:05:25.680 lots of people blacks and other sort of middle income, 0:05:25.760 --> 0:05:29.960 lower income workers, there isn't great stability in terms of 0:05:30.000 --> 0:05:33.760 their employment So the notion that you can commit right 0:05:33.800 --> 0:05:36.320 now that you know you're going to be able to 0:05:36.360 --> 0:05:39.919 make a certain amount of plan payments over the next 0:05:39.960 --> 0:05:45.920 five years is given our current economic climate, an unrealistic expectations. 0:05:46.720 --> 0:05:49.839 There's been a lot of talk about systemic racism in 0:05:49.880 --> 0:05:54.160 the justice system. Is there a racist element in the 0:05:54.279 --> 0:06:00.200 US Bankruptcy Code? Intentional? No, But if you look at 0:06:00.240 --> 0:06:04.880 the way the code is structured for human beings that 0:06:04.960 --> 0:06:09.960 follow for bankruptcy, there are clear biases, and it's just 0:06:10.120 --> 0:06:15.039 so happens that those biases favor a certain profile, which 0:06:15.080 --> 0:06:18.240 I have called in the past the ideal debtor. So, 0:06:18.480 --> 0:06:21.440 if you are a homeowner and you want to be 0:06:21.520 --> 0:06:26.000 able to restructure your debts to keep your home, bankruptcy 0:06:26.080 --> 0:06:28.480 is a good thing. Well, when you look at the 0:06:28.560 --> 0:06:33.560 differences in the home ownership rate for white, blacks and Latinos, 0:06:33.560 --> 0:06:37.200 that favors white because white are more likely to own 0:06:37.240 --> 0:06:40.920 homes than blacks and Latinos. If you look at other 0:06:41.040 --> 0:06:44.839 things like the type of property that you're allowed to keep, 0:06:45.600 --> 0:06:49.960 intangible property like a retirement of pension, well, if you 0:06:50.040 --> 0:06:56.080 look at the pension participation rates, Whites are disproportionately likely 0:06:56.160 --> 0:07:00.560 to have both an employer provided pension and also private 0:07:00.600 --> 0:07:05.080 saving through an i RA. So the code has this 0:07:05.240 --> 0:07:09.280 model of who they think the debtor is that is 0:07:09.640 --> 0:07:14.200 deserving of protection in bankruptcy, and when they created the 0:07:14.280 --> 0:07:19.000 provisions to protect certain types of debtors, a certain debtor 0:07:19.200 --> 0:07:22.480 was in mind, and that debtor is not a typical 0:07:22.640 --> 0:07:26.840 Black or Latino America. There's been a lot of news 0:07:26.960 --> 0:07:32.080 about how COVID nineteen has disproportionately hit the black community 0:07:32.080 --> 0:07:35.120 as far as number of cases, but it's also hit 0:07:35.200 --> 0:07:40.440 the black community more harshly than whites economically. So during 0:07:40.440 --> 0:07:45.160 the pandemic, of black owned business is closed compared to 0:07:45.240 --> 0:07:48.520 seventeen percent of white owned businesses. How do you account 0:07:48.520 --> 0:07:52.120 for that that's a huge difference. Well, one thing, and 0:07:52.120 --> 0:07:55.160 this isn't sort of a bankruptcy results, but one thing 0:07:55.200 --> 0:07:58.680 that happened is when at the very beginning of the 0:07:58.680 --> 0:08:02.160 p P P Blane program, there were lots of problems 0:08:02.160 --> 0:08:06.200 as we all painfully saw a play out, certainly in 0:08:06.240 --> 0:08:10.520 the media. And if you're a small um sort of 0:08:10.560 --> 0:08:14.440 mom and pop are so propriet to black business and 0:08:14.560 --> 0:08:18.840 you don't and you didn't have a longstanding relationship with 0:08:18.920 --> 0:08:21.520 the lender, it was highly unlikely that you were going 0:08:21.560 --> 0:08:24.960 to get one of those loans. They tried to fix 0:08:25.160 --> 0:08:28.720 some of those problems in the second waves of the 0:08:28.800 --> 0:08:31.920 p PP loans, but the simple reality is that if 0:08:32.000 --> 0:08:36.280 you are someone that isn't being favored by a lender, 0:08:36.400 --> 0:08:39.400 and you weren't favored by a lender pre COVID, then 0:08:39.400 --> 0:08:41.280 it was going to be hard for you to get 0:08:41.320 --> 0:08:46.199 those loans. And also, uh, there there are some studies 0:08:46.240 --> 0:08:51.240 out there that indicate that black businesses in general, notwithstanding 0:08:51.280 --> 0:08:54.680 all of the anti discrimination laws, have a harder time 0:08:55.080 --> 0:09:01.520 getting access to capital and particularly to low interest rate blows. 0:09:03.440 --> 0:09:07.960 So I was surprised to learn that personal bankruptcy filings 0:09:07.960 --> 0:09:12.040 have dropped rather than spiked during the pandemic. A big 0:09:12.120 --> 0:09:17.280 drop of is that because people aren't getting to their 0:09:17.360 --> 0:09:20.920 lawyer's offices or is there you know a reason why 0:09:21.200 --> 0:09:24.559 bankruptcy filings would have dropped? Will There would be a 0:09:25.480 --> 0:09:28.280 host of reasons, and again I'm somewhat speculating. First, you 0:09:28.320 --> 0:09:31.439 can't get to your lawyer's office. Second, your lawyer's offices 0:09:31.600 --> 0:09:35.920 or lawyer's offices are backed up um But third, to 0:09:36.040 --> 0:09:39.800 the extent that someone is going to fill for Chapter 0:09:39.960 --> 0:09:43.480 thirteen and they have no income. There's really no reason 0:09:43.520 --> 0:09:46.720 to propose a plan when you know that you don't 0:09:46.800 --> 0:09:49.640 have a job and you won't be able to propose 0:09:50.400 --> 0:09:52.760 any planned payments. So, I mean, it could be a 0:09:52.800 --> 0:09:57.160 sort of a whole range of reasons why people haven't filed. 0:09:57.600 --> 0:10:00.920 It doesn't mean, of course, that there is not economic 0:10:01.000 --> 0:10:04.480 desperation that's out there. Um. And the other thing I 0:10:04.480 --> 0:10:07.800 would add is for some of those folks, that could 0:10:07.840 --> 0:10:11.200 also be that they have filed in the last few 0:10:11.280 --> 0:10:14.960 years and therefore they're not eligible to refile. But it 0:10:15.120 --> 0:10:18.360 is sort of a bit um. It seems to be 0:10:18.360 --> 0:10:21.720 a bit of a disconnect that we're in this horrendous 0:10:21.760 --> 0:10:25.199 economic crisis and yet bankruptcy filings are down. I will 0:10:25.240 --> 0:10:28.280 be surprised if they remain low, but it is a 0:10:28.280 --> 0:10:31.120 bit shocking that they're still long now. There was some 0:10:31.240 --> 0:10:36.319 relief for those already in Chapter thirteen from the Cares Act. 0:10:37.080 --> 0:10:40.800 They allowed you to modify your plans, extend the time 0:10:40.840 --> 0:10:44.640 of your Chapter thirteen bankruptcy things like that. Was there 0:10:44.760 --> 0:10:48.040 enough relief so to the extent that you're going to 0:10:48.200 --> 0:10:52.360 extend and you have no income, the extension really doesn't 0:10:52.360 --> 0:10:55.560 help you and also one of the things that I 0:10:55.600 --> 0:11:00.640 have said repeatedly is bankruptcy works. Well, if you have 0:11:00.880 --> 0:11:03.560 sort of a one off problem, you know, you have 0:11:03.679 --> 0:11:08.240 an unexpected financial catastrophe and you can't afford to pay it, 0:11:08.320 --> 0:11:10.920 you file for bankruptcy, you're able to get that discharge. 0:11:11.200 --> 0:11:15.280 The problem that we're seeing now with America, certainly the 0:11:15.320 --> 0:11:18.400 middle class and also to some extent our lower income 0:11:18.440 --> 0:11:22.880 workers as well, is there is instability. And so even 0:11:22.920 --> 0:11:25.600 if you get an extension or if you're told you 0:11:25.600 --> 0:11:28.560 can file for bankruptcy, if you don't know that you 0:11:28.600 --> 0:11:32.600 are going to have any income to repay any bills 0:11:32.679 --> 0:11:36.720 Interchapter thirteen plans, there's no reason to file. And again, 0:11:36.720 --> 0:11:39.559 as I said earlier, the extension doesn't help you if 0:11:39.600 --> 0:11:43.160 you have no income to pay. Are there any solutions 0:11:43.200 --> 0:11:47.840 to help make bankruptcy a better prospect for black debtors. Well, 0:11:47.960 --> 0:11:50.720 I've been on a pair for the last couple of years. 0:11:50.960 --> 0:11:53.240 One of the things that we don't know in bankruptcy 0:11:53.320 --> 0:11:56.880 is anything about race because they're not required to collect 0:11:56.920 --> 0:12:00.000 that data. And so the academic studies have been terrific, 0:12:00.160 --> 0:12:04.240 but these are professors who went about to collect the data. 0:12:04.320 --> 0:12:08.920 There's absolutely no reason that the Administrative office can't say 0:12:08.960 --> 0:12:12.920 that bankruptcy courts, you know, as part of filing for bankruptcy, 0:12:13.240 --> 0:12:16.720 we need to have information about race because it's hard 0:12:16.920 --> 0:12:20.920 to figure out exactly what's going on in bankruptcy. If 0:12:20.960 --> 0:12:24.520 we're not keeping track of what's going on in bankruptcy, 0:12:24.800 --> 0:12:27.280 and so we want to know what's going on with 0:12:27.360 --> 0:12:30.760 respect to race, then we need to count it. And 0:12:30.840 --> 0:12:33.760 for example, if we then see that, you know, blacks 0:12:33.760 --> 0:12:36.880 are disproportionately you know, three times, it's like that I'm 0:12:36.920 --> 0:12:39.240 just making up a number here three times, it's likely 0:12:39.480 --> 0:12:43.680 to be pushed into a more expensive, longer term Chapter 0:12:43.760 --> 0:12:48.480 thirteen than to be pushed into a shorter, cheaper Chapter seven. 0:12:49.120 --> 0:12:53.040 We can then go about asking the trustees officers, to judges, 0:12:53.559 --> 0:12:56.240 the lawyers, why are you doing this? But one of 0:12:56.240 --> 0:12:58.440 the problems that we have right now is we don't 0:12:58.480 --> 0:13:02.880 have comprehensive data. That was another surprise, because it seems 0:13:02.920 --> 0:13:06.600 like every form you fill out, any official form, they 0:13:06.679 --> 0:13:09.679 ask about your race or ethnicity. So it's kind of 0:13:09.679 --> 0:13:12.199 odd that they don't ask that in the bankruptcy court. 0:13:13.080 --> 0:13:16.360 You can say, odd, I hope it is not intentional, 0:13:16.720 --> 0:13:19.560 but certainly when we see what's going on now with 0:13:19.720 --> 0:13:23.400 the census, and you know, ending things early in the 0:13:23.440 --> 0:13:27.760 potential of an undercount. One wonders if no one wants 0:13:27.800 --> 0:13:31.720 to see the data. But there's absolutely no reason. You're right. 0:13:31.880 --> 0:13:33.760 I mean every time we see out of perform about 0:13:33.760 --> 0:13:38.160 almost anything there as you know what, gender, which race, 0:13:38.520 --> 0:13:41.280 but not in bankruptcy. Thanks for being on the Bloomberg 0:13:41.360 --> 0:13:45.120 Laws shell. Michelle. That's Michelle Dickerson, a professor of bankruptcy 0:13:45.240 --> 0:13:48.199 law at the University of Texas at Austin Law School. 0:13:49.880 --> 0:13:53.240 What would a president Biden mean for employers and employees, 0:13:53.440 --> 0:13:56.360 at least according to his policy initiatives, Well, if you 0:13:56.400 --> 0:13:59.320 live in California, you may already have a notion of 0:13:59.360 --> 0:14:02.720 what the legal landscape is likely to be. Joining me 0:14:02.800 --> 0:14:06.000 is employment law expert Amphony on c, a partner at 0:14:06.040 --> 0:14:10.719 Proscouer Rose give us an overview. Will change as in 0:14:10.840 --> 0:14:16.679 the Biden administration in employment laws benefit employers or employees? 0:14:17.559 --> 0:14:22.360 I think the changes that are proposed will overwhelmingly benefit 0:14:22.400 --> 0:14:28.520 employees and in particular labor unions. Many of the proposals 0:14:28.760 --> 0:14:32.560 fulfill a wish list that organized labor has had for 0:14:32.880 --> 0:14:36.080 many years. Indeed, in some cases decades, all of which 0:14:36.320 --> 0:14:40.920 are addressed in some way or another by the Biden proposals. 0:14:41.000 --> 0:14:45.760 So I guess by indirect association, employees will be benefited 0:14:45.760 --> 0:14:49.840 by that, but principally labor unions will be assisted and 0:14:50.240 --> 0:14:53.400 aided by much of the legislation that is proposed by 0:14:53.440 --> 0:14:59.040 the prospective Biden administration. Unions have been losing power for years, 0:14:59.400 --> 0:15:02.680 even as if freeing court has added to their woes. 0:15:03.120 --> 0:15:06.800 Is it even possible to dial that back? Well, that's 0:15:06.920 --> 0:15:10.080 really what much of this legislation looks like. It appears 0:15:10.080 --> 0:15:12.720 to be a rearguard action on the part of labor 0:15:12.880 --> 0:15:16.440 unions to try to at least hold on to the 0:15:16.480 --> 0:15:20.920 percentage of the workforce that they currently represent, and perhaps 0:15:20.920 --> 0:15:24.040 even reverse the trend that has been going on since 0:15:24.200 --> 0:15:29.520 nineteen fifties, which has seen consistent reductions in the number 0:15:29.680 --> 0:15:34.080 and percentage of employees that are represented by labor unions. 0:15:34.160 --> 0:15:37.560 We are in a situation today in the United States 0:15:37.640 --> 0:15:43.960 where approximately ten percent of the workforce is unionized. That's 0:15:44.000 --> 0:15:49.520 down from over in the and if you break down 0:15:49.520 --> 0:15:53.560 that ten percent that exists today, that's only about six 0:15:54.640 --> 0:15:58.280 of the private sector and approximately a third of the 0:15:58.320 --> 0:16:02.480 public sector. So public employe unions are really quite robust 0:16:02.600 --> 0:16:06.640 still in today's environment. But where unions have really lost 0:16:06.760 --> 0:16:11.320 ground is among private sector employers. What do you see 0:16:11.320 --> 0:16:15.160 as some of the most important changes that would directly 0:16:15.200 --> 0:16:19.080 affect unions? Sort of job one, if you will. The 0:16:19.160 --> 0:16:21.920 unions have been in effect. This was true in the 0:16:21.960 --> 0:16:24.200 early years of the Obama administration. To try to get 0:16:24.240 --> 0:16:27.720 this pass as well, something known as card check. The 0:16:27.760 --> 0:16:32.880 proposed legislation sometimes goes by the acronym f E f 0:16:33.000 --> 0:16:36.000 C A, which stands for the Employee Free Choice Act. 0:16:36.720 --> 0:16:38.920 It's somewhat of an ironic name for it because really 0:16:38.960 --> 0:16:43.120 what it does is it eliminates the need for elections 0:16:43.240 --> 0:16:46.920 in unionization campaigns. Today, what we have is, if you 0:16:47.000 --> 0:16:52.760 have a non unionized workforce, the union needs to qualify 0:16:52.880 --> 0:16:57.680 to have an election, which is federally supervised and by 0:16:57.680 --> 0:17:00.680 the National Relations Board, And of course a union wins 0:17:00.720 --> 0:17:04.800 that election, the employer and the employees have union then 0:17:04.840 --> 0:17:07.560 collect the bargaining takes place. The Employee Free Choice Act 0:17:07.760 --> 0:17:13.040 approaches the situation somewhat differently. It allows union officials organizers 0:17:13.080 --> 0:17:18.760 to get employees to sign cards without there being any election, 0:17:18.840 --> 0:17:22.800 without there being any campaign and if the union can 0:17:22.840 --> 0:17:27.240 get enough cards the majority of the workforce to sign 0:17:27.320 --> 0:17:30.240 these cards. UH. And of course it's very difficult to 0:17:30.240 --> 0:17:34.480 tell what the circumstance center which UH those cards are signed. 0:17:34.720 --> 0:17:36.639 That there could be threats, there could be promises that 0:17:36.800 --> 0:17:40.679 are unmonitored by the government, unmonitored by the employer. But 0:17:40.720 --> 0:17:44.800 if if the union shows up with plus one of 0:17:44.920 --> 0:17:48.440 those cards, the union exists at the union will then 0:17:48.480 --> 0:17:52.720 be subject to collective bargaining with the employer and there 0:17:52.720 --> 0:17:55.040 will be no election. So, although it's called the Employee 0:17:55.040 --> 0:17:58.520 Free Choice Act BAC, employees will be deprived of the 0:17:58.680 --> 0:18:01.159 right to have an election in the event that the 0:18:01.280 --> 0:18:05.879 percent plus one cards are gotten by the union behind 0:18:05.880 --> 0:18:10.480 the scenes. Usually, what about right to work? States? Will 0:18:10.520 --> 0:18:17.600 that sept interfere. Most union policy involving collective bargaining rights, etcetera. 0:18:18.080 --> 0:18:23.480 Exists on the federal level, but as a result of 0:18:24.480 --> 0:18:27.240 along of the Taft partly Acts was passed in the 0:18:27.280 --> 0:18:32.400 nineteen fifties. UH. There is the right for and has 0:18:32.520 --> 0:18:36.640 been amended. There's the right for states to regulate some 0:18:36.840 --> 0:18:41.119 of the aspects of this, and approximately twenty seven states 0:18:41.119 --> 0:18:43.560 in the United States have what are called right to 0:18:43.600 --> 0:18:48.280 work laws, and essentially what they do is they prohibit 0:18:48.640 --> 0:18:53.040 so called union security clauses. Union security clauses say that 0:18:53.119 --> 0:18:56.720 anybody who works and gets a job in this workplace, 0:18:56.720 --> 0:18:59.560 whether they belong to union or not, must pay union dudes. 0:19:00.200 --> 0:19:03.120 And in those states seven or so that have these 0:19:03.200 --> 0:19:05.960 right to work laws, that kind of provision is illegal. 0:19:06.200 --> 0:19:09.320 One of the proposals in the Biden Plan is to 0:19:09.760 --> 0:19:13.639 make it illegal for states to have right to work laws, 0:19:13.680 --> 0:19:17.679 meaning that these union security clauses will once again return 0:19:17.720 --> 0:19:20.400 to all states, and that no state will be able 0:19:20.400 --> 0:19:24.879 to have a different policy with respect to not recognizing 0:19:25.400 --> 0:19:28.399 the obligation of an employee, whether he or she is 0:19:28.440 --> 0:19:31.080 a member of the union or not, she who pay 0:19:31.240 --> 0:19:34.080 union dues. And that will be obviously a significant impact, 0:19:34.359 --> 0:19:37.359 primarily in the Midwest and in many southern states that 0:19:37.400 --> 0:19:40.119 have these right to work laws. Diversity and inclusion in 0:19:40.160 --> 0:19:43.720 the workplace have been issues for some time now. How 0:19:43.760 --> 0:19:48.560 would a Biden administration promote those policies. It's interesting I 0:19:49.000 --> 0:19:53.159 practice in California, and many of the proposals in the 0:19:53.200 --> 0:19:57.600 Biden Plans come almost directly from the laws and the 0:19:57.720 --> 0:20:01.000 policies that exist here in California. For that are or worse. 0:20:01.400 --> 0:20:06.159 One of the primary tenets of the Biden Plan is 0:20:06.200 --> 0:20:09.919 something called the Paychecks Fairness Act, which would enact on 0:20:10.000 --> 0:20:12.800 the federal level for therefore would apply to all states, 0:20:13.040 --> 0:20:18.200 a sort of supercharge bill that would address wage disparity 0:20:18.280 --> 0:20:21.320 on the basis of sex. Both California and New York 0:20:21.359 --> 0:20:26.159 already have fairly robust laws with respect to this issue, 0:20:26.880 --> 0:20:29.240 and this would again federalize that so that it would 0:20:29.280 --> 0:20:33.240 apply in all jurisdictions. What it would do, among other things, 0:20:33.400 --> 0:20:38.800 is narrow the employer defenses that would exist for explaining 0:20:38.880 --> 0:20:43.359 or trying to defend against who wage disparity claims. UH. 0:20:43.400 --> 0:20:48.479 It would also restrict employers from preventing employees who might 0:20:48.520 --> 0:20:51.840 otherwise discuss wage information. There are already our provisions about 0:20:51.840 --> 0:20:55.119 that in some statutes, but this would elevate that so 0:20:55.160 --> 0:20:58.480 that employees could discuss wage information among themselves. It would 0:20:58.520 --> 0:21:02.679 increase civil penalties or employers that violate the provisions, and 0:21:02.800 --> 0:21:06.040 also importantly, it would require employers to provide compensation data 0:21:06.080 --> 0:21:08.639 to the e o C, which is the federal anti 0:21:08.640 --> 0:21:13.760 discrimination agency. Employers would have to break down employee populations 0:21:13.760 --> 0:21:16.800 by race, sex, and national origin. Again, many of the 0:21:16.920 --> 0:21:20.640 aspects of that already exist in California and New York. 0:21:20.960 --> 0:21:26.800 Another really major and important anti discrimination civil rights provision 0:21:26.880 --> 0:21:28.879 is going to be called the Equality Act. And what 0:21:29.000 --> 0:21:31.000 this would do with prohibit discrimination on the base of 0:21:31.040 --> 0:21:35.720 sexual orientation or gender identity on the federal level. Now, 0:21:36.080 --> 0:21:39.439 by the way, there is no statutory formulation on that topic. 0:21:39.520 --> 0:21:43.520 Many many states already have anti discrimination provisions that touch 0:21:43.680 --> 0:21:47.080 on sexual orientation and gender identity. But to some extent, 0:21:47.480 --> 0:21:51.680 this proposed Act has been overtaken by events because we 0:21:51.800 --> 0:21:54.960 know you've reported in past shows of the United States 0:21:54.960 --> 0:21:58.520 Supreme Court in June decided a case called bow Stock 0:21:58.920 --> 0:22:02.560 versus Clayton County, Georgia. And in that case, the United 0:22:02.560 --> 0:22:08.160 States Supreme Court decided by interpreting the existing statutory language 0:22:08.160 --> 0:22:12.520 from titled Southern to include anti discrimination provisions that aren't 0:22:12.640 --> 0:22:16.440 expressly stated in the statute. So, to some extent, the 0:22:16.480 --> 0:22:19.879 Equality Act has become less of a major priority because 0:22:19.920 --> 0:22:21.879 the Supreme Court has done a happy lifting on that 0:22:22.000 --> 0:22:27.120 already by interpreting existing law to include anti discrimination provisions 0:22:27.160 --> 0:22:32.639 based on sexual orientation and gender identity. Despite the CARES Act, 0:22:32.960 --> 0:22:36.400 a lot of employees right now are having trouble with 0:22:36.600 --> 0:22:40.320 paid sick and family leave during COVID nineteen, and there 0:22:40.320 --> 0:22:42.840 have been a lot of lawsuits filed. How would the 0:22:42.880 --> 0:22:47.720 Biden administration deal with those on a more permanent level. 0:22:48.440 --> 0:22:52.320 There is another proposed piece of legislation called the Healthy 0:22:52.400 --> 0:22:57.080 Families Act that would require employers to provide paid sickly, 0:22:57.520 --> 0:23:00.560 which again is already mandatory and telep barn in many 0:23:00.560 --> 0:23:03.880 other major cities in some other states. Specifically, the bill 0:23:03.920 --> 0:23:08.080 would require that employers for fifteen or more employees would 0:23:08.119 --> 0:23:11.560 need to provide paidsickly for employees to use for themselves 0:23:11.560 --> 0:23:14.159 in their families, and they will earn it at a 0:23:14.240 --> 0:23:16.879 rate of one hour of paid sickly for every thirty 0:23:16.880 --> 0:23:20.919 hours worked. People require employers with fewer than fifteen employees 0:23:21.320 --> 0:23:25.000 to write either that rate of paidsickly or at least 0:23:25.040 --> 0:23:28.680 fifty six hours of unpaid sickly. So again, this would 0:23:28.760 --> 0:23:31.600 federalize an initiative that already exists on a number of 0:23:31.760 --> 0:23:35.439 statute books in the state and local levels. Changes in 0:23:35.560 --> 0:23:39.720 technology will continue to eliminate jobs for many workers. You 0:23:39.720 --> 0:23:43.000 don't want to stop progress, So how would Biden deal 0:23:43.080 --> 0:23:46.800 with those kinds of changes? Among other things? If the 0:23:46.920 --> 0:23:49.840 laws that are proposed and the policies that are proposed 0:23:49.840 --> 0:23:53.840 by the potential by administration get passed. It would require 0:23:54.280 --> 0:23:57.959 employers that receive federal funds to give employees notice of 0:23:57.960 --> 0:24:02.040 technology changes in automation that might affect them. Biden would 0:24:02.080 --> 0:24:05.840 also seek to claw back certain tax benefits and public 0:24:05.960 --> 0:24:10.320 funding from companies that would offshore American jobs. Some of 0:24:10.320 --> 0:24:12.280 these is not a great deal specificity about, but that 0:24:12.400 --> 0:24:16.640 is something that clearly is contemplated as well. How much 0:24:16.680 --> 0:24:23.120 are these proposals like what California already has in law, Well, 0:24:23.160 --> 0:24:25.919 it's interesting. Some of them are provisions that have been 0:24:25.960 --> 0:24:28.240 tried in that have failed for one reason or another. 0:24:28.280 --> 0:24:33.040 For example, one of the important Democratic backed provisions, which 0:24:33.080 --> 0:24:37.639 isn't specifically stated in the Biden proposals, but which he 0:24:37.720 --> 0:24:43.000 presumably would be receptive to, involved the outlawing essentially of 0:24:43.320 --> 0:24:47.320 arbitration agreements in the employment setting, as well as those 0:24:47.320 --> 0:24:50.600 stuttings in some other contexts as well. But with respect 0:24:50.640 --> 0:24:54.800 to employment, this means that employers and employees would no 0:24:54.880 --> 0:24:58.959 longer be able to lawfully enter into arbitration agreements by 0:24:59.040 --> 0:25:02.560 which beute that might be heard now in front of 0:25:02.560 --> 0:25:06.600 an arbitrator involving discrimination, harassment, wrongful termination, or whatever it 0:25:06.640 --> 0:25:09.280 may be, would have to be heard by a jury, 0:25:09.320 --> 0:25:12.320 and of course that would result in a huge number 0:25:12.440 --> 0:25:15.560 of increased claims being brought in front of juries all 0:25:15.560 --> 0:25:18.679 over the country. I think that would significantly clawed courts. 0:25:18.880 --> 0:25:20.679 But this has been again on the wish list, not 0:25:20.800 --> 0:25:22.960 of unions in this case, but on the part of 0:25:22.960 --> 0:25:26.680 the trial lawyers that represent employees, because they obviously would 0:25:26.760 --> 0:25:29.000 much prefer to be in front of a jury in 0:25:29.080 --> 0:25:31.960 most of these cases rather than in front of a 0:25:32.000 --> 0:25:37.720 retired judge or senior employment law practitioner who typically populates 0:25:37.760 --> 0:25:41.000 the arbitration ranks. And so one of the statutes that 0:25:41.080 --> 0:25:45.760 has already passed the House and has support among Democrats 0:25:45.760 --> 0:25:50.040 in the Senators something called the Forced Arbitration Injustice Repeal Act, 0:25:50.600 --> 0:25:53.240 the Fair Act, And what that would do would make 0:25:53.400 --> 0:25:57.360 pre dispute arbitration agreements illegal in California and everywhere else. 0:25:57.400 --> 0:26:00.840 I say California, because we did pass a law a 0:26:00.920 --> 0:26:03.560 year or so ago, as in New York, to do 0:26:03.680 --> 0:26:07.640 the same thing to outlaw arbitration, but those provisions came 0:26:07.720 --> 0:26:11.119 up against the federal law. The Federal Arbitration Act, and 0:26:11.160 --> 0:26:14.439 in both instances, federal courts struck down those state laws. 0:26:14.760 --> 0:26:18.359 So what this would do would federalize that rule, which 0:26:18.400 --> 0:26:20.640 is that there would no longer be any arbitration between 0:26:20.680 --> 0:26:24.199 employers and employees in these cases. Another major aspect of 0:26:24.320 --> 0:26:27.600 what some travelers have been advocating for a long time 0:26:27.760 --> 0:26:32.359