Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
Speaker 1: Elon Musk has been trying to get rid of his
Speaker 1: Twitter sitter for years, even though he agreed to have
Speaker 1: a lawyer preapprove his Tesla tweets as part of a
Speaker 1: settlement with the SEC in twenty eighteen, although it's unclear
Speaker 1: exactly who is watching over his social media posts and
Speaker 1: how much watching they're actually doing. In an interview on
Speaker 1: sixty Minutes at the time, the billionaire didn't seem too
Speaker 1: concerned about getting that supervision. The only tweets that would
Speaker 1: have to be say, reviewed, would be if a tweet
Speaker 1: had a probability of causing improvement in.
Speaker 2: The stock and that's it.
Speaker 1: Yeah, I mean, otherwise it's hello. First Amendment, like creatio,
Speaker 1: speech is fundamental. Freedom of speech is a fundamental constitutional right.
Speaker 1: But that argument did not convince the courts to throw
Speaker 1: out his Twitter sitter agreement, and this week the Supreme
Speaker 1: Court refused to let his legal battle go any further,
Speaker 1: turning down Musk's appeal without any comment. Joining me is
Speaker 1: business law expert Eric Tally, a professor at Columbia Law School.
Speaker 1: Elon Musk has battled the SEC over his social media
Speaker 1: posts since he tweeted in August twenty eighteen he had
Speaker 1: funding secured to take Tesla private.
Speaker 2: Well, this was yet another example of mister Musk's penchant
Speaker 2: for firing things up onto Twitter or x, you know,
Speaker 2: sort of at the spur of the moment. And yeah,
Speaker 2: this was an example. Back in twenty eighteen, mister Musk
Speaker 2: dropped the tweets that basically said funding secured for you know,
Speaker 2: buying out Twitter at four hundred twenty dollars a share.
Speaker 2: And you know that number of the four to twenty
Speaker 2: name is a very popular one for mister Musks used
Speaker 2: to be all over the place of him. Well, people
Speaker 2: took seriously this idea that funding was secured, and if
Speaker 2: you looked into the backstory, the funding sources were not
Speaker 2: nearly as secure as he signaled that they were at
Speaker 2: the time. So that ended up eliciting two different legal
Speaker 2: actions won by the SEC. And then there was also
Speaker 2: a class action lawsuit, and he won the class action lawsuit,
Speaker 2: but the SEC moved first and said that was misleading.
Speaker 2: You didn't have the funding secured. We are going to
Speaker 2: push our own regulatory action against you, and the matter
Speaker 2: quickly settled, and it probably settled in part because the
Speaker 2: SEC has a lot of heft when it comes to sanctions.
Speaker 2: They can basically force someone not to be an officer
Speaker 2: and director of a company for many, many years if
Speaker 2: they chose to do so. So, the terms of the
Speaker 2: settlement that mister Musk reached with the SEC included some
Speaker 2: monetary fines that he had to pay, which was tens
Speaker 2: of millions of dollars but kind of pocket change for him.
Speaker 2: And in addition, he had to step down as chairman
Speaker 2: of the board to keep his board position and CEO position.
Speaker 2: But then the final thing is that he needed a
Speaker 2: Twitter babysitter. He needed to consult with a lawyer before
Speaker 2: he put things up on Twitter, so the lawyer could
Speaker 2: sort of sound the alarm bells if what he was
Speaker 2: about to do had a bearing on things like, oh,
Speaker 2: I don't know, securities, fraud. And so that's effectively what
Speaker 2: he had agreed to do in this settlement. And you know,
Speaker 2: he is a guy that tends not to like being,
Speaker 2: you know, overseen by lawyers or anyone else. And you know,
Speaker 2: within a couple of years grew quite tired of the
Speaker 2: fact that he couldn't just post whenever he wanted. He
Speaker 2: combined that then with you know, all kinds of negative
Speaker 2: comments about the SEC. Generally. This action clearly left a
Speaker 2: very bad taste in his mouth, and continued to put
Speaker 2: things on Twitter that you know, were even sort of
Speaker 2: vulgar insults of the SEC. And at some point decided
Speaker 2: he was going to try to get out of the settlement.
Speaker 2: So he had petitioned lower courts to let him out
Speaker 2: of this Twitter babysitter settlement provision, saying that it violated
Speaker 2: his First Amendment rights, there was a prior restraint on
Speaker 2: what he was allowed to say in the public forum.
Speaker 2: The courts that heard it below they were having nothing
Speaker 2: to do with it. It said, look, this is a
Speaker 2: settlement that you entered into. This is in fact a
Speaker 2: restriction that every other executive at TESLA has. They can't
Speaker 2: post anything they want. They have to have it cleared
Speaker 2: with in house counsel. And that's the same thing with
Speaker 2: you right now. So no, you made your bed and
Speaker 2: you're going to sleep in.
Speaker 1: And one of those lower courts was the Second Circuit
Speaker 1: Court of Appeals here in Manhattan. It said that if
Speaker 1: Trump had wanted to preserve his right to tweet without
Speaker 1: any oversight. He could have litigated it or negotiated a
Speaker 1: different agreement.
Speaker 2: Yeah, the second circuit basically treated this like almost any
Speaker 2: other settlement, which is, you know, it is a contract
Speaker 2: that you end up reaching with a governmental regulator or
Speaker 2: a governmental enforcer that says they will call off the
Speaker 2: dog if you agree to various types of measures that
Speaker 2: you are with your eyes wide open, agreeing to do.
Speaker 2: Sometimes these are prophylactic measures to try to keep you
Speaker 2: out of harm's way. Sometimes they're paying regulatory fees. Sometimes
Speaker 2: their behavioral promises, And this one was essentially, you know,
Speaker 2: kind of in many ways, all three of them, but
Speaker 2: the behavioral part of it was, you know, he said, okay,
Speaker 2: I am willing to have you know, sort of an
Speaker 2: overseer approved or a chaperone approve my tweeting activity. There
Speaker 2: didn't seem to be any sense that he was unaware
Speaker 2: of this as a part of the settlement. In fact,
Speaker 2: his lawyers and evidently he is himself had significant input
Speaker 2: in bargaining for it. And so the second circut said, look,
Speaker 2: that's what these sorts of settlement agreements are is that
Speaker 2: you voluntarily agree to give away a particular freedom that
Speaker 2: you might otherwise have in return for having a government
Speaker 2: drop the rest of the charges and not speak the
Speaker 2: sanctions that they might have sought. You got the ladder, right,
Speaker 2: do you agree to the settlement term? And the sec
Speaker 2: kind of closed the case and didn't try to go
Speaker 2: after you for more to try to exclude you from
Speaker 2: being an officer or a director of any public company
Speaker 2: for the next five years. And now one of the
Speaker 2: things that you were giving up, you want to mullig it,
Speaker 2: you want to take it back, And that's just not
Speaker 2: the way these things work. And when you think about it,
Speaker 2: the fact of the matter is that settlements only work
Speaker 2: from both sides perspective of any legal proceeding. If both
Speaker 2: sides say, yeah, what the other side is promising up
Speaker 2: is credible. If at some point one of the sides
Speaker 2: or both of the sides end up being kind of
Speaker 2: like Lucy with the football saying, oh, I promise Charlie Brown,
Speaker 2: I'm not going to pull it away. There's nothing that
Speaker 2: keeps them from doing it, then you kind of almost
Speaker 2: lost the institution of settlement.
Speaker 1: Was it surprising at all that the Supreme Court turned
Speaker 1: this down?
Speaker 2: So this was not you know, my sense it was
Speaker 2: not a particularly hard decision for the Second Circuit to make,
Speaker 2: and my sense is the Supreme Court, notwithstanding if i'd
Speaker 2: they seem to disagree about everything these days, they also
Speaker 2: seemed largely to agree with the way that this matter
Speaker 2: was handled below. Mister Musk had you know, basically made
Speaker 2: his bed, maybe bade his cyber truck bed, and now
Speaker 2: he was going to sleep in it. They don't issue
Speaker 2: opinions usually, and that was not the case here either.
Speaker 2: But it clearly did not command enough attention of fitting
Speaker 2: justice for them to want to get involved in this determination.
Speaker 2: And on some level that actually is probably good for
Speaker 2: settlement generally, right, even for Elon Musk settling things in
Speaker 2: the future. You know, the fact that settlement promises are
Speaker 2: credible matters, and you know, for him to win in
Speaker 2: this case was going to pretty much require him to say,
Speaker 2: there are certain types of speech restrictions that we should
Speaker 2: not even allow anyone to agree to, such as this
Speaker 2: Twitter babysitter at speech restriction. But the problem is this
Speaker 2: is the form of commercial speech. The type of oversight
Speaker 2: was really a procedural type of oversight, and so you know,
Speaker 2: I don't think anyone thought this amount to an especially
Speaker 2: strong case. I guess when you've got a little bit
Speaker 2: extra cash floating around, I guess you could take a
Speaker 2: flyer on something, and that's probably what he did here.
Speaker 1: He certainly has that extra cash floating around. Let's talk
Speaker 1: now about the Twitter sitter. There have been some instances
Speaker 1: where you wonder where the Twitter sitter is. For example,
Speaker 1: in twenty twenty one, he posted a Twitter poll asking
Speaker 1: whether he should sell ten percent of his stock, and
Speaker 1: the SEC sent out subpoenas to him and Tesla. He
Speaker 1: had a Twitter sitter then, supposedly, I mean, does he
Speaker 1: really have a Twitter sitter?
Speaker 2: Well, this has been a big issue that the SEC
Speaker 2: has continued to try to ask him about. One of
Speaker 2: the problems that the SEC can't seem to get him
Speaker 2: show up for his depositions, so they've had a really
Speaker 2: hard time dealing with him. I think he's been borderline
Speaker 2: sort of contemptuous of the SEC, at least in some moments.
Speaker 2: I think he's calmed down a little bit more recently.
Speaker 2: But yeah, so a house lawyer or security lawyer would
Speaker 2: look at that type of a tweet and say, yeah,
Speaker 2: that's a potential problem to be basically sending out cooy
Speaker 2: signals of a significant transaction that would likely be a
Speaker 2: market moving transaction. People are going to rely on that,
Speaker 2: and when they do, that can have an effect of
Speaker 2: manipulating the market or causing people to incorrectly rely on
Speaker 2: something that you didn't actually mean. And so that's the
Speaker 2: type of communication that you know, a reasonable investor out
Speaker 2: there might start relying on this as a statement of
Speaker 2: his intent in a way that's going to materially move
Speaker 2: the market. Those are a lot of the ingredients of
Speaker 2: another Securities brought problem, and so I think it caused
Speaker 2: a lot of people that were casual observers and then
Speaker 2: the not so casual observers at the SEC to say,
Speaker 2: is this Twitter sitter asleep on the job or is
Speaker 2: he basically locked himself in his room and the Twitter
Speaker 2: sitter can't get in and he's just tweeting the way
Speaker 2: And you know, I don't know sure soon, but you know,
Speaker 2: one could safely surmise that that's at least not a
Speaker 2: long shot story that he's been tweeting on the fly
Speaker 2: as well.
Speaker 1: Let's alto talk. He's still involved in the SEC's investigation
Speaker 1: of his acquisition of Twitter now X.
Speaker 2: There are some complaints that sort of came around actually
Speaker 2: from early on processes in his potential acquisition of Twitter
Speaker 2: that then became an acquisition of Twitter. Remember, he was
Speaker 2: tweeting early on in this process about you know, tender
Speaker 2: offers and his other forms of intent. The question of
Speaker 2: when he actually became someone who's interested in taking over
Speaker 2: the company, which would require a different type of federal filings,
Speaker 2: that did he violate federal law in terms of what
Speaker 2: kinds of filings he was supposed to make at any
Speaker 2: given time. These are things that can hang around for
Speaker 2: a long period of time, you know. Ultimately, my sense
Speaker 2: is that those are going to be irritating. But the
Speaker 2: fact of the matter is he did end up closing
Speaker 2: this deal with Twitter. He ended up sort of pulling
Speaker 2: it off on pretty much precise of the terms that
Speaker 2: he was starting to advertise early on. And so my
Speaker 2: sense is there's still there's still some give to play
Speaker 2: out in this in this particular scenario, but that's probably
Speaker 2: not going to be the type of outcome that's going
Speaker 2: to place any seriously material restrictions on him of the
Speaker 2: type of you have to have a Twitter babysitter and
Speaker 2: you know, that's still a real thing. And so my
Speaker 2: sense is that's probably the thing that has really stuck
Speaker 2: in mister Musk's craws. Yeah, maybe in part because I
Speaker 2: think he has long viewed himself, as many others have
Speaker 2: viewed him, as an iconoclast who has kind of gotten
Speaker 2: where he's gotten because he's, you know, sort of defied
Speaker 2: the common wisdom and has been willing to make bold
Speaker 2: positions and bold statements, and so you know, some people
Speaker 2: think that's his secret sauce and pinning a babysitter on
Speaker 2: him for his Twitter post is antithetical to the very
Speaker 2: formula that he created.
Speaker 1: What's the betting line on what Tesla's shareholders will do
Speaker 1: about his fifty six billion dollar payout and the reincorporation
Speaker 1: in Texas.
Speaker 2: Yeah, time is the enemy of all and it may
Speaker 2: end up being the enemy of Elon Musk.
Speaker 3: Here.
Speaker 2: So the company now has basically made a proposal to
Speaker 2: its stockholders for the upcoming shareholder meeting for them to
Speaker 2: vote on two proposals. One is to reincorporate from Delaware
Speaker 2: into Texas, and the second is to have the stockholders
Speaker 2: vote yet again to approve mister Musk's twenty eighteen compensation package,
Speaker 2: which has since been invalidated by the Delaware Chancery Court.
Speaker 2: These are clearly related to one another. He was not
Speaker 2: talking seriously about moving to Texas until he had his
Speaker 2: compensation package invalidated. The question of whether the stockholders actually
Speaker 2: are going to be allowed to do it all over
Speaker 2: again the first process was defective is actually kind of
Speaker 2: an open question in law. Mister Musk and his team
Speaker 2: have taken a relatively aggressive legal position in essentially saying
Speaker 2: that a fairly obscure statute in Delaware allows them to
Speaker 2: have them all again on the stockholder vote, and they're
Speaker 2: going to just do it again, and if they could
Speaker 2: do it again, then that would give him more protection,
Speaker 2: and that the case needs to be reversed on that.
Speaker 2: On that ground, it's a long shot of a claim,
Speaker 2: but that's how they've sort of set it up. The
Speaker 2: reincorporation to Texas maybe a little bit less of a
Speaker 2: long shot of the claim. But you know, most of
Speaker 2: the people who you know, know and practice corporate law
Speaker 2: find it to be a bit of a head scratch
Speaker 2: to have a company of this size migrates to Texas
Speaker 2: out of what is essentially you know, kind of a
Speaker 2: temper tantrum because the fact of the matter is, Delaware
Speaker 2: has long ruled the roost of incorporation, and that's in
Speaker 2: part because the law is so well developed and the
Speaker 2: judges are actually relatively predictable. And one could make an
Speaker 2: argument that you know, most of these cases, you can
Speaker 2: probably quipple with bits and pieces of some of these opinions,
Speaker 2: but that predictability has kind of been playing a role
Speaker 2: here as well. And you know, I think that is
Speaker 2: in some ways kind of the headline story. The backstory
Speaker 2: here on both of these things, I think is that
Speaker 2: you know, these are definitely turbulent waters that Tesla now
Speaker 2: finds itself in. It is not the same as what
Speaker 2: was going on in twenty eighteen when the company was
Speaker 2: just doing gangbusters and growing like crazy. This is clearly
Speaker 2: a point of contraction of the company. You know, the
Speaker 2: problems with the cyber truck that have that have come
Speaker 2: out of made a lot of stockholders feel a little
Speaker 2: bit queasy about Tesla. You know, mister Musk has kind
Speaker 2: of continued with episodically, you know, brilliant and then a
Speaker 2: little bit crazy sounding tweets, and so I do you
Speaker 2: wonder to what extent the current stockholder base at Tesla
Speaker 2: is willing to you know, sort of blindly follow mister Musk,
Speaker 2: or is now going to be more inclined to kick
Speaker 2: the tires. And if it's the latter, then it may
Speaker 2: be a close call as to whether either of these
Speaker 2: things gets over the hump in terms of getting stockholder
Speaker 2: approval at the upcoming meeting.
Speaker 1: And how does the average stockholder react to Elon Musk
Speaker 1: wanting his full pay package when he's laying off more
Speaker 1: than ten percent of the people at Tesla.
Speaker 2: They are in a very tight situation. I mean, he's
Speaker 2: basically letting go entire teams inside Tesla, you know, including
Speaker 2: most recently I guess you know everyone who's running the
Speaker 2: Tesla supercharger network, right, which has been seen as one
Speaker 2: of the key sources of value inside Tesla. But he
Speaker 2: is clearly cinching down the belts of every mid level
Speaker 2: manager inside that company is a way to improve margins,
Speaker 2: and you know, possibly as a way to deliver on
Speaker 2: his representations that you know, electric vehicle prices aren't going
Speaker 2: to plummet. So this is a company that has got
Speaker 2: far less sort of fat to play around with than
Speaker 2: it did, you know, even two years ago. And you know,
Speaker 2: that's kind kind of why one of the things you
Speaker 2: might start to worry a little bit about is, hey,
Speaker 2: you know, we kind of got this gift from this
Speaker 2: Delaware chance Re Court judge. It is really upset mister musk.
Speaker 2: But you know, hey, fifty billion dollars is fifty billion
Speaker 2: dollars that do we want to vote to hand that
Speaker 2: back over to him? Maybe if he can deliver, But
Speaker 2: what's the current track record on his ability to deliver?
Speaker 2: And I think that that is going to be, you know,
Speaker 2: possibly something that makes this this shareholder vote, you know
Speaker 2: a little bit more of a nail binder than I
Speaker 2: think people would have expected even six months ago.
Speaker 1: Always a pleasure, Eric and always illuminating best Professor Eric
Speaker 1: Talley of Columbia Law School, turning out of other legal news.
Speaker 1: Republicans stated attorneys general are piling on to challenge the
Speaker 1: Biden administration's new Title nine rules that expand protections to
Speaker 1: LGBTQ plus students and add new safeguards for victims of
Speaker 1: sexual assault. The number has now grown to fifteen states
Speaker 1: suing over what they say is an illegal rewriting of
Speaker 1: the landmark nineteen seventy two law Title nine forbids discrimination
Speaker 1: based on sex and education. Under the new rules, it
Speaker 1: will also protect against discrimination based on sexual orientation or
Speaker 1: gender identity, and will reverse some trump eraror changes to
Speaker 1: Title nine. Joining me is Rick Rosay, a professor at
Speaker 1: Cuny Law School. What's the general intention of the Biden
Speaker 1: administration in issuing these new Title nine rules.
Speaker 3: The administration is attempting to meet many of the schools
Speaker 3: f way in terms of the issues that they have raised,
Speaker 3: but also to include among the protected categories new areas
Speaker 3: that have not been covered in the past. So, for instance,
Speaker 3: and this of course is already controversial, the new rules
Speaker 3: are going to include as sex discrimination, suture orientation, and
Speaker 3: gender identity. And in addition to that, it clarifies that
Speaker 3: pregnancy related protections and the inclusion of lactation issues are
Speaker 3: also now protected through Title nine. So certainly that would
Speaker 3: greatly impact in the post secondary schools, but even in
Speaker 3: some of the high schools. The other area that I
Speaker 3: think is very interesting is the area of decision making
Speaker 3: and investigation that in the past there was a lot
Speaker 3: of controversy around the lack of due process in the
Speaker 3: twenty twenty the Trump administration made the hearing very much
Speaker 3: almost like criminal court, but certainly very different from the
Speaker 3: Obama regulations. But now there's a lot of flexibility.
Speaker 1: What seems to be one of the most controversial parts
Speaker 1: of this is the new recognition that Title nine protects
Speaker 1: LGBTQ students. Explain that how it's expanding, Well.
Speaker 3: First of all, as you know, Title nine prohibits discrimination
Speaker 3: because of person's sex, So sex is now expanded to
Speaker 3: include a person's gender identity, and you know, sex based stereotypes.
Speaker 3: But certainly LGBTQ, and so a trans student can raise
Speaker 3: that they are being treated differently because maybe their pronouns
Speaker 3: are not being used that might be a cause of
Speaker 3: action under this, or that they're being denied access to
Speaker 3: their preferred bathroom. So that is greatly expanded now. Certainly
Speaker 3: some of these federal courts have already expanded that and
Speaker 3: through some litigation holding a violation of the Constitution when
Speaker 3: public institutions denied those rights.
Speaker 1: Many Republican control states in the last few years have
Speaker 1: adopted laws restricting the rights of transgender children, including banning
Speaker 1: gender affirming medical care for minors and ban them from
Speaker 1: using facilities that align with their gender identity. So right now,
Speaker 1: with this update to the rules, schools can no longer
Speaker 1: prohibit transgender students from going into the bathroom that aligns
Speaker 1: with their gender identity.
Speaker 3: Yes, I believe that's the intent of the Department of
Speaker 3: Educations or for the Civil Rights and these regulations.
Speaker 1: The Supreme Court declined to consider whether transgender students have
Speaker 1: a legal right to use school bathrooms that match their
Speaker 1: gender identity. Does that have any implications for these new rules?
Speaker 3: Not really. I mean, the Supreme Court might decide to
Speaker 3: take another case in the future. But there are certainly
Speaker 3: lower courts of appeals which have upheld the rights of
Speaker 3: transgender students to use the bathrooms. There are certainly a
Speaker 3: lot of lower courts, the federal district courts that have
Speaker 3: gone the other way upholding the school denial. So this
Speaker 3: is an issue that will be contentious and will be
Speaker 3: probably before the Supreme Court sometime in the future.
Speaker 1: The administration had originally intended to include a policy forbidding
Speaker 1: schools from enacting outright bans on transgender athletes, but that
Speaker 1: provision was put on hold. Do you think it's on
Speaker 1: hold for political reasons? With the election coming up and
Speaker 1: Republicans rallying around bans on transgender athletes in girls' sports.
Speaker 3: I certainly don't know for sure, but I would think
Speaker 3: that it's not for political reasons. I think they probably
Speaker 3: made it determination that they were not certain that they
Speaker 3: would be able to prevail under the law, But I
Speaker 3: have no reason to say that's even the reason that
Speaker 3: they did not include it At this point.
Speaker 1: The Department of Education said in a statement that it
Speaker 1: was applying the reasoning of the Supreme Court's ruling in
Speaker 1: the Bostock case, which found that Title seven bars workplace
Speaker 1: discrimination based on sexual orientation. Do you think that the
Speaker 1: Department of Education is on solid ground because this expands
Speaker 1: it from workplace to the schools.
Speaker 3: Yes, absolutely. I mean, that was a closely decided case,
Speaker 3: and of course Judge Gorsuch was a member of the
Speaker 3: majority of that case, and that's really important going forward.
Speaker 3: But I think, first of all, Title six was part
Speaker 3: of the nineteen sixty four Civil Rights Act, which also
Speaker 3: included Title seven, and I think that Bostic decision has
Speaker 3: been utilized in a number of different areas now and
Speaker 3: has a firm foundation in the war and analysis of
Speaker 3: that law to allow these Department of Education included in
Speaker 3: Title nine because a lot of the sexual harassment principles
Speaker 3: came out of Title seven originally.
Speaker 1: You mentioned this. Part of this rule is reversing Trump
Speaker 1: era changes to Title nine that required schools to host
Speaker 1: live hearings and allowed those accused of sexual misconduct to
Speaker 1: cross examine students in this live hearing. So how does
Speaker 1: it change that?
Speaker 3: Okay, so this is very interesting because it does change it,
Speaker 3: but it still allows some of the Trump era provisions
Speaker 3: to go into effect. So it gives much more flexibility
Speaker 3: to the schools, particularly the larger schools, to choose how
Speaker 3: they're going to do it. So, if a live hearing
Speaker 3: is being held and the school allows for fuss examination
Speaker 3: in other reevans procedures within the universities, they can allow
Speaker 3: full force examines as it might be in a civil
Speaker 3: or criminal trial. On the other hand, it doesn't require
Speaker 3: it as the Trump administration of Regulations required. It allows
Speaker 3: schools to be flexible and to determine their own process.
Speaker 1: Coming up next, an expansion of the definition of sexual harassment.
Speaker 1: You're listening to Bloomberg. Republican states are piling on to
Speaker 1: challenge the Biden administration's new Title nine rules, which expand
Speaker 1: protections to LGBTQ plus students and add new safeguards for
Speaker 1: victims of sexual assault. I've been talking to Professor Rick
Speaker 1: Rosaying of the Qunity School of Law. Rick before the break,
Speaker 1: we were talking about the policy changes over house schools
Speaker 1: and colleges handle complaints of sexual assault. The hearings they
Speaker 1: have allow schools.
Speaker 3: To be flexible and to determine their own process. So
Speaker 3: it allows schools to hold a hearing where the decision
Speaker 3: maker or the hearing officer will do the questioning, and
Speaker 3: question would have to be put to the hearing officer,
Speaker 3: and the hearing officer would decide whether to put that
Speaker 3: to the complainant, to the person who complained that the
Speaker 3: sex discrimination of sexual rations of sexual assault, and so
Speaker 3: it would be in a way a barrier direct cross
Speaker 3: examination where the accused or the accused lawyer under the
Speaker 3: Trumpet guidelines would be able to directly question the complainant. Now,
Speaker 3: that could still occur if the university has such a proceeding,
Speaker 3: but it will allow universities to have a hybrid. It
Speaker 3: will also allow universities to allow the investigator to also
Speaker 3: be the decision maker and allow the investigator splash decision
Speaker 3: maker to actually do the coross examination herself.
Speaker 1: There is also a wider definition of sexual harassment.
Speaker 3: And most of that comes from Title seven. A sexual
Speaker 3: harassment is going to include clearly what we call quid
Speaker 3: pro quo harassment, which is someone with power over either
Speaker 3: an employee or a student who requires some type of
Speaker 3: sexual favors. It could be if you don't sleep with me,
Speaker 3: you're not going to get an a in the course,
Speaker 3: or you're not going to get the promotion as an employee.
Speaker 3: That clearly is going to be unlawful under these set
Speaker 3: of regulations. And then, of course the hostile work environment,
Speaker 3: which is conduct which is of a sexual nature, but
Speaker 3: it may not be actually requiring sex, but it can
Speaker 3: be demeaning and unwanted.
Speaker 1: I know you want to give some more detail about
Speaker 1: the rules affecting pregnancy.
Speaker 3: I want to make it very clear that under Title
Speaker 3: nine now it makes it unlawful sex discrimination to discriminate
Speaker 3: against somebody based on pregnancy and related medical condition, and
Speaker 3: that includes determination of a pregnancy. So that's going to
Speaker 3: be very controversial. That means abortion, and as you know,
Speaker 3: many states have outlawed abortion now and this is also
Speaker 3: true with respect that there are two new laws in
Speaker 3: the last year and a half, the Pregnancy Workers Fairness
Speaker 3: Act and the so called pumpback. About a year ago,
Speaker 3: the Pregnancy Worker's Fairness Act was enacted and it requires
Speaker 3: players to make reasonable accommodations to people who are pregnant
Speaker 3: if they can't form the job, but they could be
Speaker 3: given some type of an accommodation that would be required.
Speaker 3: So that was one law. And then there was an
Speaker 3: older law which goes back to the Obama era, which
Speaker 3: had to do with require ring employers to provide clean
Speaker 3: spaces and spaces with electricity for people to be able
Speaker 3: to lactate at the workplace so they can be able
Speaker 3: to continue breastfeeding. And that now is going to be
Speaker 3: included in the Title nine regulation. So all of this
Speaker 3: is coming together both in the workplace and in the
Speaker 3: school place, and of course the school place is also
Speaker 3: a workplace for certain employees.
Speaker 1: At this point, they are about fifteen Republican led states
Speaker 1: challenging these new Title nine rules in several different lawsuits.
Speaker 1: What can you tell us about the basic complaints in
Speaker 1: those lawsuits?
Speaker 3: They're going after a number of the provisions, but primarily
Speaker 3: they're going after the expansion into the gender identity the
Speaker 3: LGBTQ area. That's their primary concern. I think they're also
Speaker 3: trying to bring back a full cross examination requirement, but
Speaker 3: I think they're focused is on the lgbt two area now,
Speaker 3: just mentioning that to bring this up to date. In
Speaker 3: terms of the Pregnancy Work of Fairness Act, those regulations
Speaker 3: were just denounced and there are I think nineteen Attorney
Speaker 3: generals who were challenging that also well. The complaint with
Speaker 3: respect to the Pregnancy Workers Fairness to Act relates to
Speaker 3: the United States Equal Law Deployment Opportunity and Commission. They're
Speaker 3: saying they do not have the authority and the jurisdiction
Speaker 3: to expand into that area. The Pregnancy Work of fair
Speaker 3: Act is also involving the US Department of Labor.
Speaker 1: The state superintendents from two of the states that sued,
Speaker 1: Florida and South Carolina, joined other state leaders last week
Speaker 1: in directing their local school districts to disregard the new
Speaker 1: Title nine rule. In response, the Education Department said that
Speaker 1: they have to comply with the final regulations in order
Speaker 1: to receive federal funds. Who wins in this. I mean,
Speaker 1: if there are lawsuits, is a judge likely to put
Speaker 1: the rules on hold, you know, issue a preliminary injunction.
Speaker 3: Well, they're two different avenues. One is that the attorney
Speaker 3: generals have gone into federal court and so a federal
Speaker 3: judge will make a determination. The other process where the
Speaker 3: Department of Education has fled to those schools your in
Speaker 3: violation a Title nine. That's first an administrative process. Will
Speaker 3: They'll make an administrative determination that your in violation of
Speaker 3: these rules. We're going to withhold the fund, and then
Speaker 3: that will be challenged in federal court. So eventually a
Speaker 3: federal judge and then the courts of appeals and possibly
Speaker 3: the Supreme Court will make a final determination.
Speaker 1: Is it going to be a long time before these
Speaker 1: rules are solidly in place?
Speaker 3: Let's put it this way. A lot of universities have
Speaker 3: already announced and have apployed these by the administration for
Speaker 3: these new rules, for giving them more flexibility, but also
Speaker 3: for focusing on equity for all of their students, because
Speaker 3: many of the universities recognize that this is a very
Speaker 3: positive change. So there's going to be depending on the
Speaker 3: geographic location, the state maybe even the city or town.
Speaker 3: It's going to be very different. And so yes, we're
Speaker 3: going to go through a period of challenge and decision
Speaker 3: making by the court.
Speaker 1: So I mean this reflects this sort of political back
Speaker 1: and forth as presidential administrations repeatedly rewrite the rules around
Speaker 1: you know, campus sexual misconduct, where Obama had some rules,
Speaker 1: then Trump came in and changed the rules, and now
Speaker 1: Biden came in and changed the rules. I mean, it
Speaker 1: must be frustrating to schools and you know, to students
Speaker 1: to have this continual back and forth.
Speaker 3: Yes, it is very frustrating. This is part of our
Speaker 3: federal state system. However, I'm optimistic because I think at
Speaker 3: some point, as our population ages out, if you look
Speaker 3: at the pole, younger people are much more supportive of
Speaker 3: the LGBTQ community, even among evangelical communities, and so I
Speaker 3: think culturally, eventually the people will say, hey, enough of this,
Speaker 3: and we want equity for all people and people should
Speaker 3: be treated with respect and kindness.
Speaker 1: Well, that would be lovely. Who can disagree with that?
Speaker 1: Going back to the hearings for a moment, what's the
Speaker 1: standard in these cases?
Speaker 3: Well, I mean this is maybe getting a little bit
Speaker 3: down into the weeds. But interestingly, there's going to be
Speaker 3: some differences with respect to the standard for determining whether
Speaker 3: somebody has in violation of title, whether somebody has committed
Speaker 3: an act of sex discrimination or sexual harassment, because these
Speaker 3: regulations will allow two different standards, with those schools and
Speaker 3: particular universities that may apply what's called a clear and
Speaker 3: consensing evidence standard, which is somewhere between what we call
Speaker 3: a preponderance of evidence and of course the criminal standard,
Speaker 3: which is beyond a reasonable doubt. But it's a higher
Speaker 3: standard than the usual civil standard, which is the preponderance
Speaker 3: of evidence. And what that means is it's just slightly
Speaker 3: more than fifty percent, or if you think about the
Speaker 3: scales of justice, all you need to do is tip
Speaker 3: it slightly in the direction of one party and then
Speaker 3: you have a decision. These new regulations allow for the
Speaker 3: universities and the schools to make the decision which standard
Speaker 3: they will apply, and so they're going to be different
Speaker 3: standards in different universities and different states, and that's somewhat unusual.
Speaker 3: It really is.
Speaker 1: Thanks so much. Rick. That's Professor Rick Rossaine of the
Speaker 1: QUNI School of Law. These new rules won't go into
Speaker 1: effect until August and they were proposed nearly two years ago.
Speaker 1: With the public comment period that drew two hundred and
Speaker 1: forty thousand responses. That's a record for the Department of Education.
Speaker 1: And that's it for this edition of The Bloomberg Law Show.
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