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Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.

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Speaker 1: Elon Musk has been trying to get rid of his

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Speaker 1: Twitter sitter for years, even though he agreed to have

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Speaker 1: a lawyer preapprove his Tesla tweets as part of a

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Speaker 1: settlement with the SEC in twenty eighteen, although it's unclear

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Speaker 1: exactly who is watching over his social media posts and

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Speaker 1: how much watching they're actually doing. In an interview on

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Speaker 1: sixty Minutes at the time, the billionaire didn't seem too

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Speaker 1: concerned about getting that supervision. The only tweets that would

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Speaker 1: have to be say, reviewed, would be if a tweet

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Speaker 1: had a probability of causing improvement in.

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Speaker 2: The stock and that's it.

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Speaker 1: Yeah, I mean, otherwise it's hello. First Amendment, like creatio,

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Speaker 1: speech is fundamental. Freedom of speech is a fundamental constitutional right.

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Speaker 1: But that argument did not convince the courts to throw

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Speaker 1: out his Twitter sitter agreement, and this week the Supreme

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Speaker 1: Court refused to let his legal battle go any further,

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Speaker 1: turning down Musk's appeal without any comment. Joining me is

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Speaker 1: business law expert Eric Tally, a professor at Columbia Law School.

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Speaker 1: Elon Musk has battled the SEC over his social media

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Speaker 1: posts since he tweeted in August twenty eighteen he had

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Speaker 1: funding secured to take Tesla private.

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Speaker 2: Well, this was yet another example of mister Musk's penchant

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Speaker 2: for firing things up onto Twitter or x, you know,

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Speaker 2: sort of at the spur of the moment. And yeah,

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Speaker 2: this was an example. Back in twenty eighteen, mister Musk

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Speaker 2: dropped the tweets that basically said funding secured for you know,

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Speaker 2: buying out Twitter at four hundred twenty dollars a share.

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Speaker 2: And you know that number of the four to twenty

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Speaker 2: name is a very popular one for mister Musks used

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Speaker 2: to be all over the place of him. Well, people

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Speaker 2: took seriously this idea that funding was secured, and if

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Speaker 2: you looked into the backstory, the funding sources were not

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Speaker 2: nearly as secure as he signaled that they were at

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Speaker 2: the time. So that ended up eliciting two different legal

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Speaker 2: actions won by the SEC. And then there was also

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Speaker 2: a class action lawsuit, and he won the class action lawsuit,

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Speaker 2: but the SEC moved first and said that was misleading.

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Speaker 2: You didn't have the funding secured. We are going to

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Speaker 2: push our own regulatory action against you, and the matter

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Speaker 2: quickly settled, and it probably settled in part because the

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Speaker 2: SEC has a lot of heft when it comes to sanctions.

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Speaker 2: They can basically force someone not to be an officer

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Speaker 2: and director of a company for many, many years if

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Speaker 2: they chose to do so. So, the terms of the

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Speaker 2: settlement that mister Musk reached with the SEC included some

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Speaker 2: monetary fines that he had to pay, which was tens

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Speaker 2: of millions of dollars but kind of pocket change for him.

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Speaker 2: And in addition, he had to step down as chairman

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Speaker 2: of the board to keep his board position and CEO position.

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Speaker 2: But then the final thing is that he needed a

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Speaker 2: Twitter babysitter. He needed to consult with a lawyer before

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Speaker 2: he put things up on Twitter, so the lawyer could

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Speaker 2: sort of sound the alarm bells if what he was

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Speaker 2: about to do had a bearing on things like, oh,

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Speaker 2: I don't know, securities, fraud. And so that's effectively what

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Speaker 2: he had agreed to do in this settlement. And you know,

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Speaker 2: he is a guy that tends not to like being,

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Speaker 2: you know, overseen by lawyers or anyone else. And you know,

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Speaker 2: within a couple of years grew quite tired of the

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Speaker 2: fact that he couldn't just post whenever he wanted. He

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Speaker 2: combined that then with you know, all kinds of negative

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Speaker 2: comments about the SEC. Generally. This action clearly left a

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Speaker 2: very bad taste in his mouth, and continued to put

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Speaker 2: things on Twitter that you know, were even sort of

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Speaker 2: vulgar insults of the SEC. And at some point decided

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Speaker 2: he was going to try to get out of the settlement.

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Speaker 2: So he had petitioned lower courts to let him out

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Speaker 2: of this Twitter babysitter settlement provision, saying that it violated

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Speaker 2: his First Amendment rights, there was a prior restraint on

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Speaker 2: what he was allowed to say in the public forum.

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Speaker 2: The courts that heard it below they were having nothing

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Speaker 2: to do with it. It said, look, this is a

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Speaker 2: settlement that you entered into. This is in fact a

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Speaker 2: restriction that every other executive at TESLA has. They can't

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Speaker 2: post anything they want. They have to have it cleared

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Speaker 2: with in house counsel. And that's the same thing with

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Speaker 2: you right now. So no, you made your bed and

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Speaker 2: you're going to sleep in.

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Speaker 1: And one of those lower courts was the Second Circuit

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Speaker 1: Court of Appeals here in Manhattan. It said that if

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Speaker 1: Trump had wanted to preserve his right to tweet without

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Speaker 1: any oversight. He could have litigated it or negotiated a

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Speaker 1: different agreement.

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Speaker 2: Yeah, the second circuit basically treated this like almost any

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Speaker 2: other settlement, which is, you know, it is a contract

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Speaker 2: that you end up reaching with a governmental regulator or

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Speaker 2: a governmental enforcer that says they will call off the

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Speaker 2: dog if you agree to various types of measures that

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Speaker 2: you are with your eyes wide open, agreeing to do.

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Speaker 2: Sometimes these are prophylactic measures to try to keep you

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Speaker 2: out of harm's way. Sometimes they're paying regulatory fees. Sometimes

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Speaker 2: their behavioral promises, And this one was essentially, you know,

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Speaker 2: kind of in many ways, all three of them, but

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Speaker 2: the behavioral part of it was, you know, he said, okay,

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Speaker 2: I am willing to have you know, sort of an

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Speaker 2: overseer approved or a chaperone approve my tweeting activity. There

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Speaker 2: didn't seem to be any sense that he was unaware

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Speaker 2: of this as a part of the settlement. In fact,

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Speaker 2: his lawyers and evidently he is himself had significant input

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Speaker 2: in bargaining for it. And so the second circut said, look,

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Speaker 2: that's what these sorts of settlement agreements are is that

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Speaker 2: you voluntarily agree to give away a particular freedom that

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Speaker 2: you might otherwise have in return for having a government

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Speaker 2: drop the rest of the charges and not speak the

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Speaker 2: sanctions that they might have sought. You got the ladder, right,

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Speaker 2: do you agree to the settlement term? And the sec

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Speaker 2: kind of closed the case and didn't try to go

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Speaker 2: after you for more to try to exclude you from

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Speaker 2: being an officer or a director of any public company

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Speaker 2: for the next five years. And now one of the

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Speaker 2: things that you were giving up, you want to mullig it,

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Speaker 2: you want to take it back, And that's just not

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Speaker 2: the way these things work. And when you think about it,

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Speaker 2: the fact of the matter is that settlements only work

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Speaker 2: from both sides perspective of any legal proceeding. If both

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Speaker 2: sides say, yeah, what the other side is promising up

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Speaker 2: is credible. If at some point one of the sides

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Speaker 2: or both of the sides end up being kind of

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Speaker 2: like Lucy with the football saying, oh, I promise Charlie Brown,

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Speaker 2: I'm not going to pull it away. There's nothing that

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Speaker 2: keeps them from doing it, then you kind of almost

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Speaker 2: lost the institution of settlement.

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Speaker 1: Was it surprising at all that the Supreme Court turned

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Speaker 1: this down?

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Speaker 2: So this was not you know, my sense it was

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Speaker 2: not a particularly hard decision for the Second Circuit to make,

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Speaker 2: and my sense is the Supreme Court, notwithstanding if i'd

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Speaker 2: they seem to disagree about everything these days, they also

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Speaker 2: seemed largely to agree with the way that this matter

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Speaker 2: was handled below. Mister Musk had you know, basically made

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Speaker 2: his bed, maybe bade his cyber truck bed, and now

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Speaker 2: he was going to sleep in it. They don't issue

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Speaker 2: opinions usually, and that was not the case here either.

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Speaker 2: But it clearly did not command enough attention of fitting

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Speaker 2: justice for them to want to get involved in this determination.

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Speaker 2: And on some level that actually is probably good for

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Speaker 2: settlement generally, right, even for Elon Musk settling things in

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Speaker 2: the future. You know, the fact that settlement promises are

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Speaker 2: credible matters, and you know, for him to win in

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Speaker 2: this case was going to pretty much require him to say,

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Speaker 2: there are certain types of speech restrictions that we should

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Speaker 2: not even allow anyone to agree to, such as this

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Speaker 2: Twitter babysitter at speech restriction. But the problem is this

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Speaker 2: is the form of commercial speech. The type of oversight

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Speaker 2: was really a procedural type of oversight, and so you know,

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Speaker 2: I don't think anyone thought this amount to an especially

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Speaker 2: strong case. I guess when you've got a little bit

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Speaker 2: extra cash floating around, I guess you could take a

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Speaker 2: flyer on something, and that's probably what he did here.

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Speaker 1: He certainly has that extra cash floating around. Let's talk

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Speaker 1: now about the Twitter sitter. There have been some instances

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Speaker 1: where you wonder where the Twitter sitter is. For example,

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Speaker 1: in twenty twenty one, he posted a Twitter poll asking

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Speaker 1: whether he should sell ten percent of his stock, and

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Speaker 1: the SEC sent out subpoenas to him and Tesla. He

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Speaker 1: had a Twitter sitter then, supposedly, I mean, does he

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Speaker 1: really have a Twitter sitter?

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Speaker 2: Well, this has been a big issue that the SEC

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Speaker 2: has continued to try to ask him about. One of

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Speaker 2: the problems that the SEC can't seem to get him

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Speaker 2: show up for his depositions, so they've had a really

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Speaker 2: hard time dealing with him. I think he's been borderline

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Speaker 2: sort of contemptuous of the SEC, at least in some moments.

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Speaker 2: I think he's calmed down a little bit more recently.

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Speaker 2: But yeah, so a house lawyer or security lawyer would

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Speaker 2: look at that type of a tweet and say, yeah,

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Speaker 2: that's a potential problem to be basically sending out cooy

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Speaker 2: signals of a significant transaction that would likely be a

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Speaker 2: market moving transaction. People are going to rely on that,

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Speaker 2: and when they do, that can have an effect of

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Speaker 2: manipulating the market or causing people to incorrectly rely on

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Speaker 2: something that you didn't actually mean. And so that's the

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Speaker 2: type of communication that you know, a reasonable investor out

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Speaker 2: there might start relying on this as a statement of

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Speaker 2: his intent in a way that's going to materially move

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Speaker 2: the market. Those are a lot of the ingredients of

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Speaker 2: another Securities brought problem, and so I think it caused

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Speaker 2: a lot of people that were casual observers and then

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Speaker 2: the not so casual observers at the SEC to say,

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Speaker 2: is this Twitter sitter asleep on the job or is

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Speaker 2: he basically locked himself in his room and the Twitter

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Speaker 2: sitter can't get in and he's just tweeting the way

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Speaker 2: And you know, I don't know sure soon, but you know,

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Speaker 2: one could safely surmise that that's at least not a

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Speaker 2: long shot story that he's been tweeting on the fly

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Speaker 2: as well.

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Speaker 1: Let's alto talk. He's still involved in the SEC's investigation

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Speaker 1: of his acquisition of Twitter now X.

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Speaker 2: There are some complaints that sort of came around actually

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Speaker 2: from early on processes in his potential acquisition of Twitter

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Speaker 2: that then became an acquisition of Twitter. Remember, he was

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Speaker 2: tweeting early on in this process about you know, tender

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Speaker 2: offers and his other forms of intent. The question of

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Speaker 2: when he actually became someone who's interested in taking over

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Speaker 2: the company, which would require a different type of federal filings,

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Speaker 2: that did he violate federal law in terms of what

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Speaker 2: kinds of filings he was supposed to make at any

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Speaker 2: given time. These are things that can hang around for

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Speaker 2: a long period of time, you know. Ultimately, my sense

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Speaker 2: is that those are going to be irritating. But the

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Speaker 2: fact of the matter is he did end up closing

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Speaker 2: this deal with Twitter. He ended up sort of pulling

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Speaker 2: it off on pretty much precise of the terms that

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Speaker 2: he was starting to advertise early on. And so my

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Speaker 2: sense is there's still there's still some give to play

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Speaker 2: out in this in this particular scenario, but that's probably

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Speaker 2: not going to be the type of outcome that's going

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Speaker 2: to place any seriously material restrictions on him of the

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Speaker 2: type of you have to have a Twitter babysitter and

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Speaker 2: you know, that's still a real thing. And so my

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Speaker 2: sense is that's probably the thing that has really stuck

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Speaker 2: in mister Musk's craws. Yeah, maybe in part because I

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Speaker 2: think he has long viewed himself, as many others have

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Speaker 2: viewed him, as an iconoclast who has kind of gotten

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Speaker 2: where he's gotten because he's, you know, sort of defied

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Speaker 2: the common wisdom and has been willing to make bold

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Speaker 2: positions and bold statements, and so you know, some people

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Speaker 2: think that's his secret sauce and pinning a babysitter on

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Speaker 2: him for his Twitter post is antithetical to the very

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Speaker 2: formula that he created.

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Speaker 1: What's the betting line on what Tesla's shareholders will do

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Speaker 1: about his fifty six billion dollar payout and the reincorporation

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Speaker 1: in Texas.

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Speaker 2: Yeah, time is the enemy of all and it may

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Speaker 2: end up being the enemy of Elon Musk.

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Speaker 3: Here.

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Speaker 2: So the company now has basically made a proposal to

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Speaker 2: its stockholders for the upcoming shareholder meeting for them to

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Speaker 2: vote on two proposals. One is to reincorporate from Delaware

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Speaker 2: into Texas, and the second is to have the stockholders

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Speaker 2: vote yet again to approve mister Musk's twenty eighteen compensation package,

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Speaker 2: which has since been invalidated by the Delaware Chancery Court.

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Speaker 2: These are clearly related to one another. He was not

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Speaker 2: talking seriously about moving to Texas until he had his

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Speaker 2: compensation package invalidated. The question of whether the stockholders actually

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Speaker 2: are going to be allowed to do it all over

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Speaker 2: again the first process was defective is actually kind of

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Speaker 2: an open question in law. Mister Musk and his team

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Speaker 2: have taken a relatively aggressive legal position in essentially saying

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Speaker 2: that a fairly obscure statute in Delaware allows them to

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Speaker 2: have them all again on the stockholder vote, and they're

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Speaker 2: going to just do it again, and if they could

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Speaker 2: do it again, then that would give him more protection,

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Speaker 2: and that the case needs to be reversed on that.

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Speaker 2: On that ground, it's a long shot of a claim,

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Speaker 2: but that's how they've sort of set it up. The

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Speaker 2: reincorporation to Texas maybe a little bit less of a

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Speaker 2: long shot of the claim. But you know, most of

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Speaker 2: the people who you know, know and practice corporate law

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Speaker 2: find it to be a bit of a head scratch

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Speaker 2: to have a company of this size migrates to Texas

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Speaker 2: out of what is essentially you know, kind of a

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Speaker 2: temper tantrum because the fact of the matter is, Delaware

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Speaker 2: has long ruled the roost of incorporation, and that's in

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Speaker 2: part because the law is so well developed and the

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Speaker 2: judges are actually relatively predictable. And one could make an

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Speaker 2: argument that you know, most of these cases, you can

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Speaker 2: probably quipple with bits and pieces of some of these opinions,

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Speaker 2: but that predictability has kind of been playing a role

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Speaker 2: here as well. And you know, I think that is

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Speaker 2: in some ways kind of the headline story. The backstory

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Speaker 2: here on both of these things, I think is that

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Speaker 2: you know, these are definitely turbulent waters that Tesla now

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Speaker 2: finds itself in. It is not the same as what

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Speaker 2: was going on in twenty eighteen when the company was

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Speaker 2: just doing gangbusters and growing like crazy. This is clearly

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Speaker 2: a point of contraction of the company. You know, the

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Speaker 2: problems with the cyber truck that have that have come

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Speaker 2: out of made a lot of stockholders feel a little

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Speaker 2: bit queasy about Tesla. You know, mister Musk has kind

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Speaker 2: of continued with episodically, you know, brilliant and then a

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Speaker 2: little bit crazy sounding tweets, and so I do you

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Speaker 2: wonder to what extent the current stockholder base at Tesla

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Speaker 2: is willing to you know, sort of blindly follow mister Musk,

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Speaker 2: or is now going to be more inclined to kick

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Speaker 2: the tires. And if it's the latter, then it may

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Speaker 2: be a close call as to whether either of these

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Speaker 2: things gets over the hump in terms of getting stockholder

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Speaker 2: approval at the upcoming meeting.

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Speaker 1: And how does the average stockholder react to Elon Musk

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Speaker 1: wanting his full pay package when he's laying off more

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Speaker 1: than ten percent of the people at Tesla.

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Speaker 2: They are in a very tight situation. I mean, he's

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Speaker 2: basically letting go entire teams inside Tesla, you know, including

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Speaker 2: most recently I guess you know everyone who's running the

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Speaker 2: Tesla supercharger network, right, which has been seen as one

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Speaker 2: of the key sources of value inside Tesla. But he

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Speaker 2: is clearly cinching down the belts of every mid level

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Speaker 2: manager inside that company is a way to improve margins,

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Speaker 2: and you know, possibly as a way to deliver on

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Speaker 2: his representations that you know, electric vehicle prices aren't going

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Speaker 2: to plummet. So this is a company that has got

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Speaker 2: far less sort of fat to play around with than

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Speaker 2: it did, you know, even two years ago. And you know,

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Speaker 2: that's kind kind of why one of the things you

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Speaker 2: might start to worry a little bit about is, hey,

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Speaker 2: you know, we kind of got this gift from this

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Speaker 2: Delaware chance Re Court judge. It is really upset mister musk.

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Speaker 2: But you know, hey, fifty billion dollars is fifty billion

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Speaker 2: dollars that do we want to vote to hand that

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Speaker 2: back over to him? Maybe if he can deliver, But

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Speaker 2: what's the current track record on his ability to deliver?

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Speaker 2: And I think that that is going to be, you know,

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Speaker 2: possibly something that makes this this shareholder vote, you know

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Speaker 2: a little bit more of a nail binder than I

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Speaker 2: think people would have expected even six months ago.

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Speaker 1: Always a pleasure, Eric and always illuminating best Professor Eric

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Speaker 1: Talley of Columbia Law School, turning out of other legal news.

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Speaker 1: Republicans stated attorneys general are piling on to challenge the

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Speaker 1: Biden administration's new Title nine rules that expand protections to

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Speaker 1: LGBTQ plus students and add new safeguards for victims of

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Speaker 1: sexual assault. The number has now grown to fifteen states

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Speaker 1: suing over what they say is an illegal rewriting of

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Speaker 1: the landmark nineteen seventy two law Title nine forbids discrimination

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Speaker 1: based on sex and education. Under the new rules, it

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Speaker 1: will also protect against discrimination based on sexual orientation or

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Speaker 1: gender identity, and will reverse some trump eraror changes to

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Speaker 1: Title nine. Joining me is Rick Rosay, a professor at

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Speaker 1: Cuny Law School. What's the general intention of the Biden

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Speaker 1: administration in issuing these new Title nine rules.

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Speaker 3: The administration is attempting to meet many of the schools

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Speaker 3: f way in terms of the issues that they have raised,

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Speaker 3: but also to include among the protected categories new areas

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Speaker 3: that have not been covered in the past. So, for instance,

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Speaker 3: and this of course is already controversial, the new rules

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Speaker 3: are going to include as sex discrimination, suture orientation, and

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Speaker 3: gender identity. And in addition to that, it clarifies that

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Speaker 3: pregnancy related protections and the inclusion of lactation issues are

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Speaker 3: also now protected through Title nine. So certainly that would

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Speaker 3: greatly impact in the post secondary schools, but even in

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Speaker 3: some of the high schools. The other area that I

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Speaker 3: think is very interesting is the area of decision making

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Speaker 3: and investigation that in the past there was a lot

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Speaker 3: of controversy around the lack of due process in the

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Speaker 3: twenty twenty the Trump administration made the hearing very much

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Speaker 3: almost like criminal court, but certainly very different from the

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Speaker 3: Obama regulations. But now there's a lot of flexibility.

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Speaker 1: What seems to be one of the most controversial parts

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Speaker 1: of this is the new recognition that Title nine protects

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Speaker 1: LGBTQ students. Explain that how it's expanding, Well.

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Speaker 3: First of all, as you know, Title nine prohibits discrimination

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Speaker 3: because of person's sex, So sex is now expanded to

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Speaker 3: include a person's gender identity, and you know, sex based stereotypes.

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Speaker 3: But certainly LGBTQ, and so a trans student can raise

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Speaker 3: that they are being treated differently because maybe their pronouns

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Speaker 3: are not being used that might be a cause of

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Speaker 3: action under this, or that they're being denied access to

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Speaker 3: their preferred bathroom. So that is greatly expanded now. Certainly

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Speaker 3: some of these federal courts have already expanded that and

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Speaker 3: through some litigation holding a violation of the Constitution when

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Speaker 3: public institutions denied those rights.

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Speaker 1: Many Republican control states in the last few years have

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Speaker 1: adopted laws restricting the rights of transgender children, including banning

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Speaker 1: gender affirming medical care for minors and ban them from

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Speaker 1: using facilities that align with their gender identity. So right now,

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Speaker 1: with this update to the rules, schools can no longer

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Speaker 1: prohibit transgender students from going into the bathroom that aligns

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Speaker 1: with their gender identity.

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Speaker 3: Yes, I believe that's the intent of the Department of

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Speaker 3: Educations or for the Civil Rights and these regulations.

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Speaker 1: The Supreme Court declined to consider whether transgender students have

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Speaker 1: a legal right to use school bathrooms that match their

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Speaker 1: gender identity. Does that have any implications for these new rules?

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Speaker 3: Not really. I mean, the Supreme Court might decide to

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Speaker 3: take another case in the future. But there are certainly

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Speaker 3: lower courts of appeals which have upheld the rights of

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Speaker 3: transgender students to use the bathrooms. There are certainly a

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Speaker 3: lot of lower courts, the federal district courts that have

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Speaker 3: gone the other way upholding the school denial. So this

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Speaker 3: is an issue that will be contentious and will be

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Speaker 3: probably before the Supreme Court sometime in the future.

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Speaker 1: The administration had originally intended to include a policy forbidding

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Speaker 1: schools from enacting outright bans on transgender athletes, but that

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Speaker 1: provision was put on hold. Do you think it's on

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Speaker 1: hold for political reasons? With the election coming up and

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Speaker 1: Republicans rallying around bans on transgender athletes in girls' sports.

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Speaker 3: I certainly don't know for sure, but I would think

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Speaker 3: that it's not for political reasons. I think they probably

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Speaker 3: made it determination that they were not certain that they

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Speaker 3: would be able to prevail under the law, But I

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Speaker 3: have no reason to say that's even the reason that

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Speaker 3: they did not include it At this point.

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Speaker 1: The Department of Education said in a statement that it

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Speaker 1: was applying the reasoning of the Supreme Court's ruling in

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Speaker 1: the Bostock case, which found that Title seven bars workplace

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Speaker 1: discrimination based on sexual orientation. Do you think that the

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Speaker 1: Department of Education is on solid ground because this expands

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Speaker 1: it from workplace to the schools.

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Speaker 3: Yes, absolutely. I mean, that was a closely decided case,

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Speaker 3: and of course Judge Gorsuch was a member of the

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Speaker 3: majority of that case, and that's really important going forward.

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Speaker 3: But I think, first of all, Title six was part

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Speaker 3: of the nineteen sixty four Civil Rights Act, which also

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Speaker 3: included Title seven, and I think that Bostic decision has

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Speaker 3: been utilized in a number of different areas now and

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Speaker 3: has a firm foundation in the war and analysis of

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Speaker 3: that law to allow these Department of Education included in

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Speaker 3: Title nine because a lot of the sexual harassment principles

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Speaker 3: came out of Title seven originally.

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Speaker 1: You mentioned this. Part of this rule is reversing Trump

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Speaker 1: era changes to Title nine that required schools to host

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Speaker 1: live hearings and allowed those accused of sexual misconduct to

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Speaker 1: cross examine students in this live hearing. So how does

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Speaker 1: it change that?

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Speaker 3: Okay, so this is very interesting because it does change it,

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Speaker 3: but it still allows some of the Trump era provisions

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Speaker 3: to go into effect. So it gives much more flexibility

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Speaker 3: to the schools, particularly the larger schools, to choose how

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Speaker 3: they're going to do it. So, if a live hearing

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Speaker 3: is being held and the school allows for fuss examination

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Speaker 3: in other reevans procedures within the universities, they can allow

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Speaker 3: full force examines as it might be in a civil

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Speaker 3: or criminal trial. On the other hand, it doesn't require

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Speaker 3: it as the Trump administration of Regulations required. It allows

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Speaker 3: schools to be flexible and to determine their own process.

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Speaker 1: Coming up next, an expansion of the definition of sexual harassment.

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Speaker 1: You're listening to Bloomberg. Republican states are piling on to

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Speaker 1: challenge the Biden administration's new Title nine rules, which expand

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Speaker 1: protections to LGBTQ plus students and add new safeguards for

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Speaker 1: victims of sexual assault. I've been talking to Professor Rick

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Speaker 1: Rosaying of the Qunity School of Law. Rick before the break,

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Speaker 1: we were talking about the policy changes over house schools

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Speaker 1: and colleges handle complaints of sexual assault. The hearings they

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Speaker 1: have allow schools.

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Speaker 3: To be flexible and to determine their own process. So

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Speaker 3: it allows schools to hold a hearing where the decision

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Speaker 3: maker or the hearing officer will do the questioning, and

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Speaker 3: question would have to be put to the hearing officer,

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Speaker 3: and the hearing officer would decide whether to put that

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Speaker 3: to the complainant, to the person who complained that the

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Speaker 3: sex discrimination of sexual rations of sexual assault, and so

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Speaker 3: it would be in a way a barrier direct cross

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Speaker 3: examination where the accused or the accused lawyer under the

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Speaker 3: Trumpet guidelines would be able to directly question the complainant. Now,

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Speaker 3: that could still occur if the university has such a proceeding,

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Speaker 3: but it will allow universities to have a hybrid. It

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Speaker 3: will also allow universities to allow the investigator to also

439
00:25:58,200 --> 00:26:02,680
Speaker 3: be the decision maker and allow the investigator splash decision

440
00:26:02,760 --> 00:26:06,800
Speaker 3: maker to actually do the coross examination herself.

441
00:26:07,359 --> 00:26:11,680
Speaker 1: There is also a wider definition of sexual harassment.

442
00:26:11,440 --> 00:26:14,119
Speaker 3: And most of that comes from Title seven. A sexual

443
00:26:14,119 --> 00:26:18,240
Speaker 3: harassment is going to include clearly what we call quid

444
00:26:18,320 --> 00:26:23,440
Speaker 3: pro quo harassment, which is someone with power over either

445
00:26:23,480 --> 00:26:27,080
Speaker 3: an employee or a student who requires some type of

446
00:26:27,080 --> 00:26:30,399
Speaker 3: sexual favors. It could be if you don't sleep with me,

447
00:26:31,000 --> 00:26:32,600
Speaker 3: you're not going to get an a in the course,

448
00:26:32,720 --> 00:26:35,200
Speaker 3: or you're not going to get the promotion as an employee.

449
00:26:35,480 --> 00:26:39,240
Speaker 3: That clearly is going to be unlawful under these set

450
00:26:39,280 --> 00:26:43,000
Speaker 3: of regulations. And then, of course the hostile work environment,

451
00:26:43,119 --> 00:26:46,520
Speaker 3: which is conduct which is of a sexual nature, but

452
00:26:46,680 --> 00:26:49,800
Speaker 3: it may not be actually requiring sex, but it can

453
00:26:49,840 --> 00:26:52,200
Speaker 3: be demeaning and unwanted.

454
00:26:53,080 --> 00:26:55,560
Speaker 1: I know you want to give some more detail about

455
00:26:56,080 --> 00:26:58,360
Speaker 1: the rules affecting pregnancy.

456
00:26:59,080 --> 00:27:01,720
Speaker 3: I want to make it very clear that under Title

457
00:27:01,840 --> 00:27:06,920
Speaker 3: nine now it makes it unlawful sex discrimination to discriminate

458
00:27:07,040 --> 00:27:12,040
Speaker 3: against somebody based on pregnancy and related medical condition, and

459
00:27:12,119 --> 00:27:15,320
Speaker 3: that includes determination of a pregnancy. So that's going to

460
00:27:15,320 --> 00:27:19,199
Speaker 3: be very controversial. That means abortion, and as you know,

461
00:27:20,000 --> 00:27:23,359
Speaker 3: many states have outlawed abortion now and this is also

462
00:27:23,600 --> 00:27:26,679
Speaker 3: true with respect that there are two new laws in

463
00:27:26,720 --> 00:27:31,200
Speaker 3: the last year and a half, the Pregnancy Workers Fairness

464
00:27:31,240 --> 00:27:34,520
Speaker 3: Act and the so called pumpback. About a year ago,

465
00:27:34,680 --> 00:27:39,840
Speaker 3: the Pregnancy Worker's Fairness Act was enacted and it requires

466
00:27:40,040 --> 00:27:45,200
Speaker 3: players to make reasonable accommodations to people who are pregnant

467
00:27:45,520 --> 00:27:48,879
Speaker 3: if they can't form the job, but they could be

468
00:27:48,920 --> 00:27:52,280
Speaker 3: given some type of an accommodation that would be required.

469
00:27:52,400 --> 00:27:54,960
Speaker 3: So that was one law. And then there was an

470
00:27:55,040 --> 00:27:58,720
Speaker 3: older law which goes back to the Obama era, which

471
00:27:58,760 --> 00:28:03,159
Speaker 3: had to do with require ring employers to provide clean

472
00:28:03,320 --> 00:28:07,720
Speaker 3: spaces and spaces with electricity for people to be able

473
00:28:07,760 --> 00:28:11,960
Speaker 3: to lactate at the workplace so they can be able

474
00:28:12,000 --> 00:28:15,480
Speaker 3: to continue breastfeeding. And that now is going to be

475
00:28:15,520 --> 00:28:18,640
Speaker 3: included in the Title nine regulation. So all of this

476
00:28:18,680 --> 00:28:21,520
Speaker 3: is coming together both in the workplace and in the

477
00:28:21,600 --> 00:28:24,160
Speaker 3: school place, and of course the school place is also

478
00:28:24,240 --> 00:28:27,280
Speaker 3: a workplace for certain employees.

479
00:28:27,359 --> 00:28:31,000
Speaker 1: At this point, they are about fifteen Republican led states

480
00:28:31,119 --> 00:28:35,480
Speaker 1: challenging these new Title nine rules in several different lawsuits.

481
00:28:35,760 --> 00:28:38,520
Speaker 1: What can you tell us about the basic complaints in

482
00:28:38,560 --> 00:28:39,720
Speaker 1: those lawsuits?

483
00:28:40,280 --> 00:28:43,200
Speaker 3: They're going after a number of the provisions, but primarily

484
00:28:43,280 --> 00:28:47,800
Speaker 3: they're going after the expansion into the gender identity the

485
00:28:48,200 --> 00:28:53,440
Speaker 3: LGBTQ area. That's their primary concern. I think they're also

486
00:28:53,520 --> 00:28:58,960
Speaker 3: trying to bring back a full cross examination requirement, but

487
00:28:59,120 --> 00:29:02,840
Speaker 3: I think they're focused is on the lgbt two area now,

488
00:29:02,960 --> 00:29:06,280
Speaker 3: just mentioning that to bring this up to date. In

489
00:29:06,400 --> 00:29:11,080
Speaker 3: terms of the Pregnancy Work of Fairness Act, those regulations

490
00:29:11,160 --> 00:29:14,600
Speaker 3: were just denounced and there are I think nineteen Attorney

491
00:29:14,720 --> 00:29:19,320
Speaker 3: generals who were challenging that also well. The complaint with

492
00:29:19,360 --> 00:29:22,880
Speaker 3: respect to the Pregnancy Workers Fairness to Act relates to

493
00:29:23,160 --> 00:29:26,920
Speaker 3: the United States Equal Law Deployment Opportunity and Commission. They're

494
00:29:26,920 --> 00:29:29,520
Speaker 3: saying they do not have the authority and the jurisdiction

495
00:29:29,960 --> 00:29:33,160
Speaker 3: to expand into that area. The Pregnancy Work of fair

496
00:29:33,520 --> 00:29:37,600
Speaker 3: Act is also involving the US Department of Labor.

497
00:29:38,120 --> 00:29:41,160
Speaker 1: The state superintendents from two of the states that sued,

498
00:29:41,280 --> 00:29:45,560
Speaker 1: Florida and South Carolina, joined other state leaders last week

499
00:29:45,800 --> 00:29:49,760
Speaker 1: in directing their local school districts to disregard the new

500
00:29:49,800 --> 00:29:54,480
Speaker 1: Title nine rule. In response, the Education Department said that

501
00:29:54,600 --> 00:29:58,320
Speaker 1: they have to comply with the final regulations in order

502
00:29:58,360 --> 00:30:01,160
Speaker 1: to receive federal funds. Who wins in this. I mean,

503
00:30:01,200 --> 00:30:04,560
Speaker 1: if there are lawsuits, is a judge likely to put

504
00:30:04,600 --> 00:30:07,960
Speaker 1: the rules on hold, you know, issue a preliminary injunction.

505
00:30:08,600 --> 00:30:11,880
Speaker 3: Well, they're two different avenues. One is that the attorney

506
00:30:11,920 --> 00:30:15,120
Speaker 3: generals have gone into federal court and so a federal

507
00:30:15,200 --> 00:30:18,800
Speaker 3: judge will make a determination. The other process where the

508
00:30:18,840 --> 00:30:22,680
Speaker 3: Department of Education has fled to those schools your in

509
00:30:22,800 --> 00:30:27,080
Speaker 3: violation a Title nine. That's first an administrative process. Will

510
00:30:27,160 --> 00:30:30,880
Speaker 3: They'll make an administrative determination that your in violation of

511
00:30:30,960 --> 00:30:34,560
Speaker 3: these rules. We're going to withhold the fund, and then

512
00:30:34,960 --> 00:30:38,920
Speaker 3: that will be challenged in federal court. So eventually a

513
00:30:38,960 --> 00:30:42,280
Speaker 3: federal judge and then the courts of appeals and possibly

514
00:30:42,360 --> 00:30:44,600
Speaker 3: the Supreme Court will make a final determination.

515
00:30:45,040 --> 00:30:46,760
Speaker 1: Is it going to be a long time before these

516
00:30:46,840 --> 00:30:49,200
Speaker 1: rules are solidly in place?

517
00:30:49,960 --> 00:30:52,960
Speaker 3: Let's put it this way. A lot of universities have

518
00:30:53,040 --> 00:30:56,400
Speaker 3: already announced and have apployed these by the administration for

519
00:30:56,520 --> 00:30:59,840
Speaker 3: these new rules, for giving them more flexibility, but also

520
00:31:00,560 --> 00:31:04,800
Speaker 3: for focusing on equity for all of their students, because

521
00:31:04,840 --> 00:31:07,840
Speaker 3: many of the universities recognize that this is a very

522
00:31:07,880 --> 00:31:11,880
Speaker 3: positive change. So there's going to be depending on the

523
00:31:12,080 --> 00:31:15,800
Speaker 3: geographic location, the state maybe even the city or town.

524
00:31:16,000 --> 00:31:18,960
Speaker 3: It's going to be very different. And so yes, we're

525
00:31:18,960 --> 00:31:22,440
Speaker 3: going to go through a period of challenge and decision

526
00:31:22,480 --> 00:31:23,400
Speaker 3: making by the court.

527
00:31:23,800 --> 00:31:27,880
Speaker 1: So I mean this reflects this sort of political back

528
00:31:27,920 --> 00:31:34,800
Speaker 1: and forth as presidential administrations repeatedly rewrite the rules around

529
00:31:34,920 --> 00:31:38,880
Speaker 1: you know, campus sexual misconduct, where Obama had some rules,

530
00:31:38,920 --> 00:31:41,680
Speaker 1: then Trump came in and changed the rules, and now

531
00:31:41,720 --> 00:31:45,160
Speaker 1: Biden came in and changed the rules. I mean, it

532
00:31:45,240 --> 00:31:49,200
Speaker 1: must be frustrating to schools and you know, to students

533
00:31:49,200 --> 00:31:51,800
Speaker 1: to have this continual back and forth.

534
00:31:53,000 --> 00:31:55,880
Speaker 3: Yes, it is very frustrating. This is part of our

535
00:31:56,280 --> 00:32:01,920
Speaker 3: federal state system. However, I'm optimistic because I think at

536
00:32:01,920 --> 00:32:07,600
Speaker 3: some point, as our population ages out, if you look

537
00:32:07,640 --> 00:32:13,200
Speaker 3: at the pole, younger people are much more supportive of

538
00:32:13,320 --> 00:32:21,600
Speaker 3: the LGBTQ community, even among evangelical communities, and so I

539
00:32:21,640 --> 00:32:27,040
Speaker 3: think culturally, eventually the people will say, hey, enough of this,

540
00:32:27,280 --> 00:32:31,280
Speaker 3: and we want equity for all people and people should

541
00:32:31,280 --> 00:32:34,280
Speaker 3: be treated with respect and kindness.

542
00:32:34,560 --> 00:32:37,320
Speaker 1: Well, that would be lovely. Who can disagree with that?

543
00:32:38,480 --> 00:32:41,200
Speaker 1: Going back to the hearings for a moment, what's the

544
00:32:41,240 --> 00:32:42,600
Speaker 1: standard in these cases?

545
00:32:43,200 --> 00:32:45,479
Speaker 3: Well, I mean this is maybe getting a little bit

546
00:32:45,680 --> 00:32:50,280
Speaker 3: down into the weeds. But interestingly, there's going to be

547
00:32:50,520 --> 00:32:56,520
Speaker 3: some differences with respect to the standard for determining whether

548
00:32:56,640 --> 00:33:02,280
Speaker 3: somebody has in violation of title, whether somebody has committed

549
00:33:02,320 --> 00:33:07,560
Speaker 3: an act of sex discrimination or sexual harassment, because these

550
00:33:07,680 --> 00:33:12,560
Speaker 3: regulations will allow two different standards, with those schools and

551
00:33:12,640 --> 00:33:17,560
Speaker 3: particular universities that may apply what's called a clear and

552
00:33:17,640 --> 00:33:22,000
Speaker 3: consensing evidence standard, which is somewhere between what we call

553
00:33:22,040 --> 00:33:25,480
Speaker 3: a preponderance of evidence and of course the criminal standard,

554
00:33:25,480 --> 00:33:29,280
Speaker 3: which is beyond a reasonable doubt. But it's a higher

555
00:33:29,320 --> 00:33:34,440
Speaker 3: standard than the usual civil standard, which is the preponderance

556
00:33:34,520 --> 00:33:39,280
Speaker 3: of evidence. And what that means is it's just slightly

557
00:33:39,320 --> 00:33:41,840
Speaker 3: more than fifty percent, or if you think about the

558
00:33:42,000 --> 00:33:44,600
Speaker 3: scales of justice, all you need to do is tip

559
00:33:44,640 --> 00:33:47,800
Speaker 3: it slightly in the direction of one party and then

560
00:33:47,880 --> 00:33:51,960
Speaker 3: you have a decision. These new regulations allow for the

561
00:33:52,080 --> 00:33:56,280
Speaker 3: universities and the schools to make the decision which standard

562
00:33:56,280 --> 00:33:58,800
Speaker 3: they will apply, and so they're going to be different

563
00:33:58,880 --> 00:34:03,880
Speaker 3: standards in different universities and different states, and that's somewhat unusual.

564
00:34:04,240 --> 00:34:04,880
Speaker 3: It really is.

565
00:34:05,600 --> 00:34:09,239
Speaker 1: Thanks so much. Rick. That's Professor Rick Rossaine of the

566
00:34:09,320 --> 00:34:12,479
Speaker 1: QUNI School of Law. These new rules won't go into

567
00:34:12,520 --> 00:34:16,560
Speaker 1: effect until August and they were proposed nearly two years ago.

568
00:34:16,920 --> 00:34:20,080
Speaker 1: With the public comment period that drew two hundred and

569
00:34:20,080 --> 00:34:23,840
Speaker 1: forty thousand responses. That's a record for the Department of Education.

570
00:34:24,360 --> 00:34:26,720
Speaker 1: And that's it for this edition of The Bloomberg Law Show.

571
00:34:27,040 --> 00:34:29,360
Speaker 1: Remember you can always get the latest legal news on

572
00:34:29,440 --> 00:34:33,719
Speaker 1: our Bloomberg Law Podcast. You can find them on Apple Podcasts, Spotify,

573
00:34:33,880 --> 00:34:38,919
Speaker 1: and at www dot bloomberg dot com, slash podcast Slash Law,

574
00:34:39,320 --> 00:34:41,920
Speaker 1: and remember to tune into The Bloomberg Law Show every

575
00:34:41,960 --> 00:34:45,880
Speaker 1: weeknight at ten pm Wall Street Time. I'm June Grosso

576
00:34:46,000 --> 00:34:47,600
Speaker 1: and you're listening to Bloomberg