WEBVTT - Inside a Landmark Antitrust Case 0:00:03.200 --> 0:00:08.719 This is Bloomberg Law with June Brusso from Bloomberg Radio. 0:00:09.920 --> 0:00:14.240 The United States versus Google, the first trial pitting the 0:00:14.280 --> 0:00:18.200 federal government against a US technology company in more than 0:00:18.239 --> 0:00:22.079 two decades, began in a DC federal court on Tuesday. 0:00:22.360 --> 0:00:26.479 The Justice Department and state attorneys general alleged that Google 0:00:26.640 --> 0:00:30.960 illegally monopolized the online search market by paying billions of 0:00:31.040 --> 0:00:35.839 dollars to tech rival smartphone makers and wireless providers in 0:00:35.920 --> 0:00:39.479 exchange for being the default search engine on browsers and 0:00:39.560 --> 0:00:44.280 mobile devices. But Google's top lawyer, Kent Walker, told CBS 0:00:44.280 --> 0:00:48.199 News that consumers use the search engine because it's helpful 0:00:48.320 --> 0:00:51.199 and it's easy to switch to another search engine. It 0:00:51.280 --> 0:00:53.559 really couldn't be easier. You can sit at home on 0:00:53.600 --> 0:00:56.639 your couch and change what search engine you're using. It's 0:00:56.640 --> 0:00:59.560 as easy as changing your shoes. My guest is antitrust 0:00:59.640 --> 0:01:03.800 expert Harry First, a professor at YU Law School. Harry, 0:01:03.880 --> 0:01:05.639 just how important is this case? 0:01:06.280 --> 0:01:10.160 This is an important case, at least symbolically and maybe 0:01:10.200 --> 0:01:14.240 practically so symbolically, it's important. It is the first case 0:01:14.560 --> 0:01:19.480 in more than two decades to challenge a durable, high 0:01:19.560 --> 0:01:22.520 tech monopoly. So the last case was brought in May 0:01:22.560 --> 0:01:25.520 of nineteen ninety eight, so that's a quarter of a 0:01:25.600 --> 0:01:28.360 century since the last one, and that was against Microsoft, 0:01:28.720 --> 0:01:34.640 and since that time nothing. So it is symbolically important 0:01:34.680 --> 0:01:38.320 because it shows the federal government and the state any 0:01:38.319 --> 0:01:43.080 trust enforces turning their attention to big power in our economy. 0:01:43.680 --> 0:01:46.880 Does it focus on the company paying more than ten 0:01:46.920 --> 0:01:52.200 billion dollars a year for exclusive agreements with smartphonemakers, web 0:01:52.240 --> 0:01:57.320 browsers and wireless providers in exchange for it being you know, 0:01:57.360 --> 0:02:01.440 the pre selected option, the default on mobile phones and browsers. 0:02:01.520 --> 0:02:03.280 Is that the focus of the government's case. 0:02:04.120 --> 0:02:06.920 Yeah, So it was a mixture of things with the 0:02:06.920 --> 0:02:13.359 mobile distribution channel the Android OEMs like Samsung. It started 0:02:13.400 --> 0:02:19.720 out as a licensing agreement, the mobile Application distribution agreement MADA. 0:02:20.000 --> 0:02:22.639 I guess you get mad or MATA. I don't know. 0:02:22.960 --> 0:02:27.760 If the handset manufacturer wanted to download any of the 0:02:27.919 --> 0:02:32.840 Android apps, Google Maps, Chrome Browser, they had to download 0:02:32.880 --> 0:02:35.560 all of them, and they had to put the Google 0:02:35.840 --> 0:02:39.840 Search widget on the home screen. So that originally was 0:02:39.919 --> 0:02:43.040 not for money. It was if you want to use 0:02:43.080 --> 0:02:46.280 the Android system, you have to take this basically. It 0:02:46.360 --> 0:02:51.519 later changed into some sort of revenue share agreement where 0:02:51.639 --> 0:02:55.840 you know, if you had Google Search on exclusively, then 0:02:56.000 --> 0:02:59.880 you would share advertising revenues that Google got from that. 0:03:00.160 --> 0:03:02.800 So those were those payments. The other side was the 0:03:02.880 --> 0:03:08.639 browser with Apple and Safari, and those agreements were pretty confidential. 0:03:08.680 --> 0:03:12.120 I'm not sure the exact number has come out or 0:03:12.120 --> 0:03:15.359 how much will come out, but they basically paid for 0:03:15.480 --> 0:03:20.600 the default position on Safari browser and then you know, 0:03:20.720 --> 0:03:24.760 on a few other browsers to be the default search engine. 0:03:24.880 --> 0:03:27.280 So I keep wanting to say Netscape, but of course 0:03:27.600 --> 0:03:33.920 nextscape right, so it would just be the default but 0:03:34.080 --> 0:03:38.000 for which Google is willing to pay apparently quite large 0:03:38.000 --> 0:03:38.880 sums of money. 0:03:39.400 --> 0:03:42.000 Is there anything wrong with that? With the company saying 0:03:42.040 --> 0:03:44.920 I'll pay you if you do this and we both benefit. 0:03:45.200 --> 0:03:47.960 Well, the definition of an agreement is we both benefit. 0:03:48.200 --> 0:03:53.760 So the question is whether these agreements helped to maintain 0:03:53.960 --> 0:03:58.600 Google's monopoly position. So firms entered into lots of agreements 0:03:58.600 --> 0:04:02.440 across the economy, of course, and most of them are lawful, 0:04:02.680 --> 0:04:06.240 But when it comes to monopoly firms, firms that have 0:04:06.280 --> 0:04:13.000 a monopoly position, they can't use agreements to unreasonably exclude 0:04:13.120 --> 0:04:17.720 competitors and that's what the government plaintiffs are arguing that 0:04:17.800 --> 0:04:24.640 these agreements unreasonably excluded good competitors who were foreclosed from 0:04:25.240 --> 0:04:29.240 getting their search engines in front of consumers so they 0:04:29.240 --> 0:04:32.760 could use them, and so that they could get more 0:04:32.800 --> 0:04:36.840 and more searches done on them and continuously do what 0:04:36.960 --> 0:04:40.000 Google had been able to do, and they were monopolists 0:04:40.040 --> 0:04:43.040 more and more data, more and more data, and so 0:04:43.480 --> 0:04:46.680 get better results, have a better search engine. So the 0:04:46.800 --> 0:04:51.000 argument is that they excluded competitors through these agreements. 0:04:51.600 --> 0:04:54.320 Does the Justice Department have to prove that there was 0:04:54.839 --> 0:04:56.800 harm to consumers or to the. 0:04:56.839 --> 0:05:03.800 Market, So the answer is no, yes. How's that? So 0:05:04.120 --> 0:05:09.440 technically the government plaintiffs don't have to prove injury. Private plaintiffs, 0:05:09.480 --> 0:05:11.520 if they want to collect money, have to prove they've 0:05:11.560 --> 0:05:14.760 been harmed and by how much. Government plaintiffs just have 0:05:14.839 --> 0:05:18.280 to prove harm to competition, which is a rather more 0:05:18.360 --> 0:05:22.480 abstract thing than you know, proving an exact dollar figure something. 0:05:22.839 --> 0:05:25.480 So this is why I say no, they don't have 0:05:25.560 --> 0:05:29.080 to have some clear proof that this caused you know, 0:05:29.240 --> 0:05:32.120 prices to go off things like that, but they do 0:05:32.200 --> 0:05:35.520 have to have an argument for why competition was restricted, 0:05:35.560 --> 0:05:39.839 why sort of the normal rivalry in the marketplace was impeded, 0:05:40.120 --> 0:05:42.920 and they will make an argument that that harm consumers 0:05:43.040 --> 0:05:45.560 and deprive them of certain things. So they may make 0:05:45.600 --> 0:05:49.080 an argument that prices were higher, maybe not saved by 0:05:49.160 --> 0:05:53.239 exactly how much, but advertising prices were higher. Apparently they're 0:05:53.320 --> 0:05:55.920 going to make some sort of argument like that. They'll 0:05:56.040 --> 0:06:01.240 argue that competitors were unable to innovate and provide maybe 0:06:01.279 --> 0:06:05.599 different kinds of or better searches, or push Google to 0:06:05.720 --> 0:06:09.839 be more innovative, and that consumers were harmed because by 0:06:09.880 --> 0:06:14.599 preventing competition you have less innovation. So that will be 0:06:14.640 --> 0:06:18.960 the rough argument for why consumers were injured, simply beyond 0:06:19.400 --> 0:06:23.000 you know, having only one choice the monopolist. 0:06:23.640 --> 0:06:28.599 In the opening statements, Google's lawyer argued that consumers don't 0:06:28.720 --> 0:06:32.039 use Google because they have to. They use it because 0:06:32.160 --> 0:06:34.960 they want to, and if they want to switch, it's 0:06:35.000 --> 0:06:36.400 easy enough, right. 0:06:36.560 --> 0:06:40.839 So that is a factual argument in essence, but it's 0:06:40.880 --> 0:06:44.280 also an appeal to framing the case in a way 0:06:44.320 --> 0:06:47.280 favorable to Google and in a way that they hope 0:06:47.279 --> 0:06:50.880 will appeal to the judge. So Google's basic argument is, 0:06:51.160 --> 0:06:53.760 are you kidding me? This is the greatest product ever. 0:06:54.120 --> 0:06:56.960 Why do people use it? You know, nobody's holding a 0:06:56.960 --> 0:07:00.560 gun to their head. They use it because it's darn good. 0:07:00.680 --> 0:07:04.839 And you know, nothing is stopping consumers from changing those 0:07:04.880 --> 0:07:07.760 the falls. They could do it. You know, it's easy 0:07:07.839 --> 0:07:10.400 enough to do. So tell me why they don't do it. 0:07:10.480 --> 0:07:12.520 I'll tell you why they don't do it. They don't 0:07:12.520 --> 0:07:15.640 do it because they get a great product and they're 0:07:15.640 --> 0:07:18.280 happy with it. And in the end, Google says, and 0:07:18.400 --> 0:07:21.680 this is true. The purpose of the any trust laws 0:07:21.800 --> 0:07:25.480 is to serve consumers. That's what markets are for, and 0:07:25.560 --> 0:07:28.440 consumers are being very well served. So why are you 0:07:28.480 --> 0:07:29.560 bringing this case government? 0:07:30.120 --> 0:07:32.680 Is that the only argument you think they're going to make. 0:07:32.960 --> 0:07:36.000 Well, there are lots of legal arguments along the way. 0:07:36.640 --> 0:07:40.800 They may argue that search actually isn't a product because 0:07:40.840 --> 0:07:43.960 it's on price free. You know, you can't raise its price. 0:07:44.000 --> 0:07:46.480 You can't lower its price the product if there's a 0:07:46.480 --> 0:07:49.440 product involved as advertising, you know, and then what's the 0:07:49.520 --> 0:07:53.760 advertising market? They'll argue that, okay, if search is a product, 0:07:54.000 --> 0:07:57.040 you know, there are lots of ways to search for information, 0:07:57.480 --> 0:07:59.360 even on the Internet. There are lots of ways to 0:07:59.400 --> 0:08:03.440 search for in so, for example, you know, people search 0:08:03.520 --> 0:08:07.640 for information on TikTok. Maybe not you or me, but 0:08:07.880 --> 0:08:13.160 younger people do. People search for information on Amazon, you know, 0:08:13.200 --> 0:08:15.480 if they are looking for a product, lots of people 0:08:15.760 --> 0:08:17.080 just go right to Amazon and. 0:08:16.960 --> 0:08:17.400 Look for it. 0:08:17.440 --> 0:08:19.520 They don't look for it on Google. So there are 0:08:19.560 --> 0:08:22.320 lots of different ways to search for things. And so 0:08:22.440 --> 0:08:26.040 Google is if search is a product. Google doesn't control it. 0:08:26.560 --> 0:08:30.840 Consumers control it. They sit those keyboards and make their choices. 0:08:30.840 --> 0:08:34.400 The judge asked Google's lawyer to respond to the Justice 0:08:34.400 --> 0:08:38.480 Department's allegation that quote, what you say are competition for 0:08:38.600 --> 0:08:42.960 defaults are not really competition at all. That really only 0:08:43.080 --> 0:08:46.200 Google can be selected for the default. Do you know 0:08:46.240 --> 0:08:47.920 what he meant by that? 0:08:48.760 --> 0:08:52.760 So Google was selected for the default because they paid 0:08:52.800 --> 0:08:55.160 for it in one way or another, either through the 0:08:55.240 --> 0:08:58.000 revenue share or for saying, you know, if you want 0:08:58.160 --> 0:09:00.560 all these apps, you've got to make it the fault, 0:09:00.679 --> 0:09:04.280 or they paid Apple large sums of money. The question 0:09:04.520 --> 0:09:08.000 is more, what does a fault mean? The fault is 0:09:08.200 --> 0:09:11.880 an exclusivity. It's just a start. It's where things start. 0:09:11.920 --> 0:09:15.360 It's the fault. So you know, Google wants to say 0:09:15.520 --> 0:09:19.080 there's still plenty of consumer choice. So Google isn't controlling it, 0:09:19.440 --> 0:09:22.520 consumers are controlling it. I think the judge has already 0:09:22.559 --> 0:09:27.120 shown a little skepticism about an argument that the faults 0:09:27.160 --> 0:09:30.520 don't matter, which is I think what Google wants to say, 0:09:31.040 --> 0:09:33.520 you know, it don't matter because they're changeable, and I think, 0:09:33.640 --> 0:09:37.240 you know, the judge is my recollection was pressing Google's 0:09:37.240 --> 0:09:40.280 counsel already for saying, well, give me some examples to 0:09:40.760 --> 0:09:41.720 consumers changing. 0:09:42.320 --> 0:09:44.920 Harry, as a lawyer, which side would you rather be on, 0:09:45.160 --> 0:09:46.600 the governments or Googles. 0:09:47.400 --> 0:09:50.720 I think the government's case is strong. Actually, now I 0:09:50.760 --> 0:09:53.560 say that in part because there's been a test run 0:09:53.640 --> 0:09:58.040 in a way, the European Commission already found a lot 0:09:58.080 --> 0:10:03.040 of this stuff to be in European competitional abusive dominance, 0:10:03.320 --> 0:10:07.920 the agreements relating to mobile distribution, not the browser part. 0:10:08.480 --> 0:10:11.960 And you know, one good reasoning and that doesn't compel 0:10:12.040 --> 0:10:15.559 the same results in the United States, but it's pretty similar. 0:10:15.600 --> 0:10:18.319 It's similar to arguments that were made in the Microsoft 0:10:18.360 --> 0:10:25.040 case about contracts that were exclusive and effectively excluded Netscape 0:10:25.160 --> 0:10:28.040 the browser, even though you know you could still get 0:10:28.040 --> 0:10:32.000 a browser in different ways. Now you may remember, I remember, 0:10:32.240 --> 0:10:34.640 you know it used to be, well, if you couldn't 0:10:34.640 --> 0:10:38.440 get the browser pre installed on the LPC, they came 0:10:38.480 --> 0:10:42.320 in the mail, right, you could mail them. You know, 0:10:42.400 --> 0:10:44.320 I still have some of those discs in my office. 0:10:44.360 --> 0:10:45.840 Get rid of them, right. 0:10:45.920 --> 0:10:49.400 So, Hey, there's plenty of distribution in the courts that 0:10:49.640 --> 0:10:53.160 they're you know, it doesn't have to completely foreclose you, 0:10:53.200 --> 0:10:56.679 but it's it just shuts off basically the easiest part 0:10:56.840 --> 0:11:01.280 of the most efficient way of distribution. And in that 0:11:01.440 --> 0:11:05.240 old day, the OEMs, the Dells of the world compacts 0:11:05.360 --> 0:11:08.079 didn't want to put a second browser on because of cost, 0:11:08.240 --> 0:11:11.600 and here they get that same default, even though they 0:11:11.640 --> 0:11:15.160 technically don't call it exclusive, it's the same sort of thing. 0:11:15.440 --> 0:11:19.120 So I think the government has a strong case. Obviously, 0:11:19.120 --> 0:11:21.920 it's not a lay down case. I haven't heard any 0:11:21.960 --> 0:11:27.160 talk of settlement. So Google presumably feels that it might 0:11:27.200 --> 0:11:30.600 be able to win a trial. And there's a long 0:11:31.120 --> 0:11:35.040 time between here and there, as they say, before there's 0:11:35.040 --> 0:11:38.360 some resolution of this case, because this is really we're 0:11:38.480 --> 0:11:40.040 just at the beginning of it. 0:11:41.160 --> 0:11:44.960 In its lawsuit against Google, the Justice Department pointed to 0:11:45.000 --> 0:11:48.520 that Microsoft case and said that Google deploys the same 0:11:48.559 --> 0:11:54.119 playbook as Microsoft. Did How much does this case borrow 0:11:54.760 --> 0:11:58.559 from the Microsoft case or echo the Microsoft case? 0:11:59.240 --> 0:12:01.520 I think there are there are a lot of similarities. 0:12:01.600 --> 0:12:04.440 You know, Microsoft, a lot of the exclusionary work was 0:12:04.480 --> 0:12:08.840 done by exclusive contracts that they had with Internet service providers, 0:12:08.840 --> 0:12:12.640 with AOL so forth. They paid the money, So there 0:12:12.640 --> 0:12:15.520 are a lot of factual similarities. I don't think there's 0:12:15.600 --> 0:12:19.920 the same sort of technological effort of tying Google Search 0:12:20.040 --> 0:12:24.120 to something, which is what Microsoft did with the Internet 0:12:24.160 --> 0:12:28.520 Explorer browser, but it's quite similar. And the District Court 0:12:28.520 --> 0:12:31.840 has already followed the legal playbook as well. I mean, 0:12:32.040 --> 0:12:34.199 the government, I think has tried to say, hey, this 0:12:34.280 --> 0:12:37.760 is Microsoft, and you know how that came out, and legally, 0:12:37.960 --> 0:12:42.000 the District Court judges already followed the way the Court 0:12:42.040 --> 0:12:45.760 of Appeals set out the structure for analyzing the problem. 0:12:46.000 --> 0:12:49.720 The District Court has already chosen that in an earlier 0:12:49.800 --> 0:12:53.240 decision that made the case. So Microsoft is going to 0:12:53.240 --> 0:12:56.120 be very important in this case. But you know, in 0:12:56.200 --> 0:12:59.160 the end, facts are very important. So we'll see yet 0:12:59.200 --> 0:13:02.840 how the judge about the arguments on default and how 0:13:02.920 --> 0:13:06.080 much of the market was really foreclosed by this or 0:13:06.360 --> 0:13:09.480 you know, how you figure that out. So that's yet 0:13:09.520 --> 0:13:10.040 to be seen. 0:13:10.480 --> 0:13:14.200 If Google loses, there'll be a second stage of the 0:13:14.280 --> 0:13:19.640 trial to determine the remedy. Is a breakup likely or unlikely? 0:13:19.880 --> 0:13:23.040 I mean, so I'll take the other side of the 0:13:23.120 --> 0:13:27.000 coin of Google lair enough, not not of the company, 0:13:27.040 --> 0:13:30.800 but of the case. So the Microsoft case on whether 0:13:30.920 --> 0:13:35.600 Microsoft violated the Sherman Act, the Court of Appeals that 0:13:35.679 --> 0:13:41.480 ultimately decided the case unanimously basically decided in favor of 0:13:41.559 --> 0:13:46.480 the government on the monopolization arguments and a very important 0:13:46.480 --> 0:13:49.480 and strong decision. On the other hand, when it came 0:13:49.559 --> 0:13:52.880 to remedy, the Court of Appeals was not so gong 0:13:53.000 --> 0:13:57.400 ho and the key line I think is their view 0:13:57.480 --> 0:14:00.360 that the remedy had to be tailored to fit the wrong. 0:14:00.920 --> 0:14:07.320 So although the Court of Appeals never directly opined on 0:14:07.520 --> 0:14:12.520 whether a breakup would be allowed, because eventually there was 0:14:12.559 --> 0:14:15.120 a settlement, it was pretty clear that they were not 0:14:15.320 --> 0:14:18.960 clined to a breakup would have not been inclined in Microsoft. 0:14:19.560 --> 0:14:23.320 So for this case, the government is going to have 0:14:23.400 --> 0:14:29.800 to show some sort of systemic approach to how Google operates. 0:14:30.400 --> 0:14:34.200 That requires that is, you know, they are so deeply 0:14:34.280 --> 0:14:37.520 into maintaining their monopoly. That the only way to deal 0:14:37.560 --> 0:14:42.440 with this is somehow to restructure the company. That's a 0:14:42.480 --> 0:14:45.520 heavy lift. And it will depend on how the government 0:14:45.560 --> 0:14:49.600 presents its case. If its focuses, as it seems to be, 0:14:49.920 --> 0:14:53.640 on the specifics of these contracts, well then it seems 0:14:53.680 --> 0:14:56.160 to me the remedy is likely to be let's do 0:14:56.240 --> 0:15:01.600 something about the contracts. So breaking up Google? Are we 0:15:01.640 --> 0:15:07.239 going to see goog as Google? I think it's pretty unlikely. 0:15:07.400 --> 0:15:10.280 But you know, again that's going to depend on the 0:15:10.400 --> 0:15:13.680 kind of case the government presents, I think, even before 0:15:13.720 --> 0:15:17.360 the remedies trial, but at the trial and liability, what 0:15:17.360 --> 0:15:21.040 do they do wrong? Because remedy remedies the wrong. 0:15:22.280 --> 0:15:24.320 Thanks so much, Harry has always it's a pleasure to 0:15:24.360 --> 0:15:27.680 have you on the show. That's NYU law professor Harry. 0:15:27.760 --> 0:15:33.360 First, the money is there, the cause is righteous, the 0:15:33.400 --> 0:15:38.120 world is watching in the UAW is ready to stand up. 0:15:38.600 --> 0:15:40.120 This is our defining moment. 0:15:40.960 --> 0:15:45.000 It certainly was an unprecedented moment, as the United Auto 0:15:45.040 --> 0:15:49.320 Workers went on strike Friday against all three Detroit automakers, 0:15:49.560 --> 0:15:53.600 a strategy announced by its president Sean Fain. Of course, 0:15:53.720 --> 0:15:57.440 TESLA doesn't have to worry about strikes it's the only 0:15:57.560 --> 0:16:02.200 major US auto manufacturer not represented by a union. The 0:16:02.240 --> 0:16:06.640 electric car makers' legal disputes over union organizing are no secret, 0:16:07.000 --> 0:16:10.440 and the legal fight over Tesla's ban on workers wearing 0:16:10.600 --> 0:16:14.120 union shirts on its electric car production line has reached 0:16:14.120 --> 0:16:17.040 the Fifth Circuit Court of Appeals. Joining me is labor 0:16:17.120 --> 0:16:20.840 law expert Kate Andreas, a professor at Columbia Law School. 0:16:21.400 --> 0:16:23.520 Kate tell us about this Tesla ban. 0:16:24.040 --> 0:16:28.720 So Tesla banned union shirts, it required workers in the 0:16:28.760 --> 0:16:33.040 plant to only wear Tesla's shirt black shirts in particular 0:16:33.360 --> 0:16:36.440 or with supervisors permission. I think they were also able 0:16:36.520 --> 0:16:39.000 to wear plain black shirts. What the workers did is 0:16:39.040 --> 0:16:41.800 they wanted to wear UAW shirts that were also black, 0:16:41.880 --> 0:16:44.120 that looks basically the same as the Tesla shirts, but 0:16:44.160 --> 0:16:47.000 instead of having the Tesla logo on them, they had 0:16:47.040 --> 0:16:48.080 the UAW logo. 0:16:48.760 --> 0:16:51.920 Is that an unusual kind of ban? I mean, don't 0:16:51.920 --> 0:16:53.560 a lot of places have uniforms. 0:16:54.120 --> 0:16:58.520 So since the nineteen forties, the NLRB has held, with 0:16:58.640 --> 0:17:04.160 Supreme Court approval, that workers are allowed to wear union insignia, 0:17:04.240 --> 0:17:08.520 including union T shirts, unless there's a special business reason 0:17:08.680 --> 0:17:10.840 for an employer to prohibit it. So it is the 0:17:10.880 --> 0:17:14.240 case that a lot of employers have uniform requirements, but 0:17:14.359 --> 0:17:19.520 they have to permit workers to wear union buttons, union stickers, 0:17:19.600 --> 0:17:22.960 union shirts unless there's some business reason why doing so 0:17:23.920 --> 0:17:27.399 is detrimental to the business. The reason for that is 0:17:27.440 --> 0:17:31.040 the board has recognized that showing your support for the 0:17:31.160 --> 0:17:34.280 union is an important part of how workers organized unions, 0:17:34.320 --> 0:17:37.920 and it's an important part of workers' right to accession 0:17:38.040 --> 0:17:40.439 at work right. It's their right to communicate their support 0:17:40.520 --> 0:17:43.800 for the union, and that is protected by the MLRA. 0:17:44.680 --> 0:17:50.240 The NLRB made a decision against the Tesla Band last year. 0:17:50.320 --> 0:17:51.200 Tell us about that. 0:17:52.160 --> 0:17:55.960 So the board's decision was consistent with the doctrine going 0:17:55.960 --> 0:17:58.360 all the way back to nineteen forty five really old 0:17:58.359 --> 0:18:02.120 case called Republic aviation. In that case held that workers 0:18:02.160 --> 0:18:06.560 can wear union insignia on their shirts, on buttons, things 0:18:06.600 --> 0:18:10.120 like that, as long as it's not causing a problem 0:18:10.160 --> 0:18:12.959 for the business. So the presumption is that it's okay 0:18:12.960 --> 0:18:16.320 to wear union insignia, the business has to show. The 0:18:16.359 --> 0:18:19.320 employer has to show that there's a specific business reason 0:18:19.800 --> 0:18:25.320 why wearing union messages is impermissible is damaging to the business, 0:18:25.400 --> 0:18:27.640 And in this case, the boardsound that Tesla wasn't able 0:18:27.680 --> 0:18:30.159 to do that. It wasn't able to show why wearing 0:18:30.240 --> 0:18:33.320 a UAW logo and a black shirt versus a Tesla 0:18:33.359 --> 0:18:36.360 logo on a black shirt caused any problem for the business. 0:18:36.840 --> 0:18:40.720 Did it factor in at all that Tesla adopted this 0:18:40.840 --> 0:18:45.200 policy in twenty seventeen during a campaign by the UAW 0:18:45.400 --> 0:18:47.160 to organize production workers. 0:18:47.720 --> 0:18:51.440 The Tesla's position was that ad adopted the ban because 0:18:51.480 --> 0:18:56.679 there were problems with production, that Tesla vehicles were getting 0:18:56.720 --> 0:18:59.240 harmed in some way in production, so it tightened up 0:18:59.280 --> 0:19:02.800 this uniform rules. But what the board said was, well, 0:19:03.200 --> 0:19:06.440 if you had, for example, made a proguson on wearing 0:19:06.560 --> 0:19:09.600 sharp implements, that would be understandable, right because you might 0:19:09.880 --> 0:19:13.120 rip a our seed if you're wearing a sharp implement. 0:19:13.600 --> 0:19:16.119 But what you can't do is adopt a rule that 0:19:16.240 --> 0:19:19.080 really doesn't in any way. There's no special business reason 0:19:19.160 --> 0:19:21.800 for it, and you certainly can't do it if there's 0:19:21.840 --> 0:19:24.800 the possibility that you're doing it in order to coerce 0:19:24.840 --> 0:19:28.159 workers and exercise of their union organizing rights, that you're 0:19:28.160 --> 0:19:32.119 trying to discriminate against union activity. So it is especially 0:19:32.160 --> 0:19:36.280 illegal if it's adopted in order to retaliate against union activity. 0:19:36.480 --> 0:19:38.800 But even if it's not right, even if it's adopted 0:19:38.840 --> 0:19:43.480 for other reasons, it's not permissible unless the employer can 0:19:43.520 --> 0:19:45.040 show that there's a need for it. And there are 0:19:45.080 --> 0:19:47.800 lots of cases where the board has held that a 0:19:47.840 --> 0:19:51.400 band is permissible because there's a special business need. For example, 0:19:51.600 --> 0:19:53.960 hospitals can tell our nurses they have to wear a 0:19:53.960 --> 0:19:59.040 scrups right. Grocery stores can tell workers who are cashier workers, 0:19:59.280 --> 0:20:01.560 you know, who are pub facing workers, that they have 0:20:01.640 --> 0:20:05.040 to wear a particular uniform. Nursing homes can tell workers 0:20:05.040 --> 0:20:07.360 that they have to wear uniforms and patient care areas. 0:20:07.640 --> 0:20:10.280 But this is really different. These are workers who are working, 0:20:10.840 --> 0:20:13.600 not facing the public in a plant, and there was 0:20:13.640 --> 0:20:16.439 no business reason why they couldn't wear a UAW logo 0:20:16.560 --> 0:20:18.919 instead of a Tesla logo on their shirt, and so 0:20:18.960 --> 0:20:22.040 the board said that violates their right to organize. 0:20:22.280 --> 0:20:26.360 But it seemed like the Fifth Circuit judges were concentrating 0:20:26.680 --> 0:20:31.480 on the difference between dress codes that don't allow any 0:20:31.560 --> 0:20:35.639 expression of union support and those like Tesla's that permit 0:20:36.000 --> 0:20:39.680 workers to wear union stickers and the like on their 0:20:39.680 --> 0:20:43.840 company's shirt. One of the judges said, a sticker says, 0:20:43.920 --> 0:20:47.440 go union union is good or whatever. In what way 0:20:47.520 --> 0:20:51.800 is that an insufficient means of communication? So were these 0:20:51.880 --> 0:20:55.640 judges ignoring that precedent you just told us about. 0:20:55.720 --> 0:20:57.639 Right, So one of the judges seemed to be saying, 0:20:58.200 --> 0:21:01.840 if the employer give workers some way to communicate their support, 0:21:02.040 --> 0:21:06.720 that's enough that the employer gets to decide how workers 0:21:06.720 --> 0:21:09.320 can communicate their support for the union. That is not 0:21:09.440 --> 0:21:13.119 what the president has held since nineteen forty five, with 0:21:13.200 --> 0:21:15.440 the exception of a very brief period during the Trump 0:21:15.480 --> 0:21:19.520 administration when the board kind of clamped down on workers' 0:21:19.520 --> 0:21:22.520 ability to express themselves. But other than that brief perio 0:21:22.600 --> 0:21:26.080 during the Trump administration, since nineteen forty five, the Board 0:21:26.080 --> 0:21:29.199 has said the employer doesn't get to decide that it 0:21:29.240 --> 0:21:31.959 doesn't like union shirts or it doesn't like union buttons 0:21:32.040 --> 0:21:36.040 unless there's a business reason for that. So if this 0:21:36.200 --> 0:21:39.439 circuit ends up adopting the reasoning that was suggested in 0:21:39.600 --> 0:21:43.440 oral argument, that would be a real retrenchment of where workers' 0:21:43.480 --> 0:21:45.399 rights have been for a long time. 0:21:45.800 --> 0:21:49.000 And the opinion you were referring to was a Supreme 0:21:49.040 --> 0:21:49.720 Court opinion. 0:21:50.240 --> 0:21:52.960 Yeah, so it's a Supreme Court opinion called Republic aviation, 0:21:53.440 --> 0:21:56.240 and it was the court in that case upholding what 0:21:56.320 --> 0:21:59.280 the board had decided. That's important too. So there's sort 0:21:59.320 --> 0:22:01.159 of two things that are worry some about what the 0:22:01.160 --> 0:22:05.240 Fifth Circuit judges are suggesting. One is that it suggests 0:22:05.280 --> 0:22:10.120 that there's at least some interest or possibility of narrowing workers' 0:22:10.200 --> 0:22:13.680 rights to express themselves in their effort to organize. But 0:22:13.720 --> 0:22:16.479 the other is a question of how much will court 0:22:16.880 --> 0:22:19.800 defer to the expertise of the board. And so in 0:22:19.840 --> 0:22:22.679 this nineteen forty five case from the Supreme Court, Supreme 0:22:22.720 --> 0:22:25.919 Court deferred to the board, and that the board is 0:22:25.960 --> 0:22:28.880 really the one that's expert in how workers organize unions. 0:22:29.240 --> 0:22:31.920 If the board thinks that it's appropriate to have this rule, 0:22:32.560 --> 0:22:34.040 we're going to defer to it. We think it's a 0:22:34.040 --> 0:22:37.600 reasonable interpretation of the statute. So this seems to suggest 0:22:37.720 --> 0:22:40.320 less different to the board than the Supreme Court was 0:22:40.320 --> 0:22:41.800 willing to give in this old precedent. 0:22:42.520 --> 0:22:46.399 Tell me your general impressions of the oral arguments or 0:22:46.440 --> 0:22:48.360 the concerns of the judges. 0:22:48.760 --> 0:22:51.280 Well, you never want to read too much into oral arguments. 0:22:51.440 --> 0:22:54.960 The judges, I know, read briefs carefully and take a 0:22:54.960 --> 0:22:58.479 close look at the law. However, based on the oral argument, 0:22:58.840 --> 0:23:02.320 I have some concern that the judges were misreading existing 0:23:02.359 --> 0:23:05.880 precedent and seemed to be suggesting that they were going 0:23:05.920 --> 0:23:10.880 to retail important expressive rights of workers in a way 0:23:10.880 --> 0:23:11.800 that's really troubling. 0:23:12.119 --> 0:23:16.360 What was Tesla's argument about why they should be allowed. 0:23:16.560 --> 0:23:18.800 So just basically had two arguments. One was that there 0:23:18.840 --> 0:23:22.960 has been a problem with damage to vehicles, for example, 0:23:23.400 --> 0:23:27.240 car seats ripping against in items, and as a result 0:23:27.280 --> 0:23:29.880 of that, they needed to adopt a stricter uniform policy 0:23:29.960 --> 0:23:33.600 that limited for example, metal on clothing. That's a legitimate 0:23:33.640 --> 0:23:36.600 business reason, right, they're worried about the quality of the cars. 0:23:36.760 --> 0:23:39.600 What was the board said was that reason doesn't connect 0:23:40.000 --> 0:23:42.800 to not wearing a black UAW shirt, so it's not 0:23:43.000 --> 0:23:45.760 enough of a reason. The second reason Tesla gave was 0:23:45.800 --> 0:23:49.000 that employers needed to have visual control, so they needed 0:23:49.040 --> 0:23:51.720 to be able to spot who's a worker, who's a manager, 0:23:52.080 --> 0:23:54.320 and all the workers had to wear black Tesla shirts 0:23:54.320 --> 0:23:56.679 in order to enable that kind of control over the 0:23:56.720 --> 0:24:01.160 production line. But there again the board said, that's fine, right, 0:24:01.200 --> 0:24:03.920 that's a legitimate business reason. But as long as they're 0:24:03.920 --> 0:24:07.159 wearing a BLACKAW shirt in the brief, there's pictures of 0:24:07.359 --> 0:24:09.399 shirts you know that essentially looks the same, it just 0:24:09.440 --> 0:24:12.320 has a different logo on it. Then again, the rule 0:24:12.440 --> 0:24:15.359