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

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Speaker 2: The Supreme Court justice is clashed today over the limits

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Speaker 2: on a state's power to ban abortions when a woman's

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Speaker 2: health is in jeopardy. It indicates a deep divide over

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Speaker 2: the Biden administration's attempt to protect access to abortion in

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Speaker 2: medical emergencies, even in states like Idaho with near total

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Speaker 2: bans on abortion. During the tense arguments, the court's three

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Speaker 2: liberal justices agreed with the administration's view that a forty

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Speaker 2: year old federal law MTALLA requires hospitals to provide abortions

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Speaker 2: when necessary to prevent major health consequences for the woman.

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Speaker 2: Here's Justice Elena Kagan, where.

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Speaker 3: The woman is her life is not imperiled, but she's

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Speaker 3: going to lose her reproductive organs. She's going to lose

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Speaker 3: the ability to have children in the future unless an

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Speaker 3: abortion takes place. Now, that's the category of cases in

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Speaker 3: which I'm talis, says, my gosh. Of course the abortion

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Speaker 3: is necessary to assure that no material deterioration occurs. And

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Speaker 3: yet Idaho says, sorry, no abortion here. And the result

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Speaker 3: is that these patients are now helicoptered out of state.

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Speaker 2: But the court's most conservative justice is like Samuel Alito,

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Speaker 2: questioned the administration's reading of the law.

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Speaker 1: How can you impose restrictions on what Idaho can criminalize

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Speaker 1: simply because hospitals in Idaho have chosen to participate in Medicare.

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Speaker 1: I don't understand how this swears with the whole theory

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Speaker 1: of the spending clause.

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Speaker 2: It's the first time the Court has reviewed a state

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Speaker 2: abortion ban since it overturned the right to abortion in

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Speaker 2: twenty twenty two. Joining me is Elizabeth Zepper, a professor

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Speaker 2: at the University of Texas Law School. Liz, there was

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Speaker 2: a lot going on under the surface of these arguments,

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Speaker 2: but tell us about the main issue.

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Speaker 4: The main issue is whether emergency department physicians in Idaho

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Speaker 4: have to comply with the Federal Emergency Medical Treatment and

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Speaker 4: Labor Act or if the state law that only allows

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Speaker 4: them to provide abortion if someone's life is at risk

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Speaker 4: is what governs their provision of emergency medical care.

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Speaker 2: So the Biden administration maintains that Idaho's law it collides

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Speaker 2: with the federal law m TALA and so should override

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Speaker 2: Idaho's ban. That's federal preemption. Why doesn't that answer the

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Speaker 2: question here.

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Speaker 4: Yeah, that should answer the question. The US Constitution has

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Speaker 4: a supremacy clause that says federal law is supreme and

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Speaker 4: m TALA is federal law. There are questions about the

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Speaker 4: degree of conflict between Idaho's abortion ban with its very

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Speaker 4: narrow life saving exception and m TALA. Idaho a multiple

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Speaker 4: points tried to claim that there actually was no conflict

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Speaker 4: between state law and federal law at all.

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Speaker 2: That was surprising to me, and I think it was

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Speaker 2: surprising to some of the justices as well. They asked, well,

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Speaker 2: why are you here if there's no conflict?

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Speaker 4: Right, It would seem that if there is no conflict,

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Speaker 4: we should both see emergency department doctors able to provide

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Speaker 4: the same emergency abortion care they were providing pre state

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Speaker 4: law ban on abortion. And also it would seem like

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Speaker 4: the state shouldn't be at the Supreme Court on this question.

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Speaker 4: I think Justice Jackson, though, really put her finger on

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Speaker 4: the issue. The State of Idaho was trying to argue

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Speaker 4: there wasn't a conflict with federal law by saying that

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Speaker 4: the federal law essentially defers to state law on the

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Speaker 4: question of what medically appropriate care is in an emergency

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Speaker 4: and so that if someone complies with a state law,

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Speaker 4: they are automatically complying with the federal m TALA. And

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Speaker 4: she pushed the assistant Solicitor General from Idaho's whether it

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Speaker 4: would be true that if a doctor complied with m

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Speaker 4: TALA that there would be no conflict with Idaho law.

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Speaker 2: And what was his response.

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Speaker 4: I don't think that he could really respond in a

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Speaker 4: satisfying way, right, She said, Well, if there would be

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Speaker 4: no conflict, why not let doctors comply with m tala

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Speaker 4: and the state law presumably allows them to do so

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Speaker 4: if there truly is no conflict.

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Speaker 2: Particularly, the Solicitor General pointed out what's happening on the ground,

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Speaker 2: so to speak, saying that Idaho's abortion ban has already

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Speaker 2: affected emergency care, that women are being flown to other states.

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Speaker 4: Yeah, I think the Solicitor General really focused the court

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Speaker 4: on what is going on in Idaho. It's one thing

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Speaker 4: to claim that you could read the statutes as having

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Speaker 4: identical requirements for emergency care. It's quite another to look

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Speaker 4: at IDOL and see what has happened under the abortion ban.

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Speaker 4: And what has happened is there are hospital closures, There

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Speaker 4: is near impossibility in recruiting obgins come to the state,

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Speaker 4: and people who become pregnant are told to purchase insurance

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Speaker 4: for metavac flights because what physicians know is if they

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Speaker 4: experience complications in pregnancy, those pregnant patients are going to

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Speaker 4: need to be dumped on another state Entirely.

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Speaker 2: Under Idaho's law, abortions are only allowed when necessary to

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Speaker 2: prevent the death of the pregnant woman. So Justice Sotomayor

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Speaker 2: asked Idaho's lawyer if it were true that the state's

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Speaker 2: ban would prevent abortion in situations where a woman would

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Speaker 2: otherwise lose an organ or have serious medical complications. Justice

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Speaker 2: Kagan brought this up as well, and when pushed and pushed,

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Speaker 2: Idaho's lawyers said, yes, abortions are in that case are

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Speaker 2: not allowed.

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Speaker 4: Yeah, there some slipperiness, though, I think it seemed and

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Speaker 4: the answers to I think really concrete clinical cases that

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Speaker 4: the justices were presenting to Idaho's Assistant Solicitor General, and

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Speaker 4: you know many times what he would come back to is, well,

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Speaker 4: if there's good faith medical judgment, and they had to

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Speaker 4: keep pushing him on good faith medical judgment of what

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Speaker 4: and the answer under Idaho law has to be that

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Speaker 4: death is likely to occur.

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Speaker 2: Did he ever admit that, you know it would have

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Speaker 2: to be that radical for an abortion to take place.

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Speaker 4: No, we got the same sort of grimerle that we

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Speaker 4: get whenever health and life exceptions come up, where the

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Speaker 4: defenses of these really narrow exceptions tend to pass the

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Speaker 4: book to physicians to say, well, they can go ahead

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Speaker 4: and exercise their medical judgment, and surely there doesn't need

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Speaker 4: to be imminence here. It could be something that could

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Speaker 4: occur the next day or within the week. It doesn't

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Speaker 4: have to be imminent. The Solicitor General said, Look, it

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Speaker 4: says necessary, right, Even if there's not an imminence, this

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Speaker 4: will occur within minutes. The necessary to prevent death does

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Speaker 4: tell you something about the connection between performing an abortion

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Speaker 4: and avoidance of death that you have to be able

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Speaker 4: to establish that it was necessary. And if a doctor

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Speaker 4: does perform an abortion under these circumstances, they always face

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Speaker 4: the possibility that an enterprising prosecutor could come along and

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Speaker 4: second guess their medical judgment.

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Speaker 2: And under this law, performing an abortion outside of these

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Speaker 2: limited exceptions is a felony punishable by up to five

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Speaker 2: years in prison. So a tough penalty. So the three

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Speaker 2: liberal justices seem to be firmly on the Biden administration side.

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Speaker 2: So let's turn down to the conservatives of starting with

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Speaker 2: Justice Samuel Alito, who wrote the majority decision overturning Row,

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Speaker 2: and he seemed to be most invested in supports arding

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Speaker 2: Idaho's law. He grilled a Solicitor general about whether mental

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Speaker 2: health is a condition that would require abortions. He also

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Speaker 2: pointed to language in Mtala that refers to unborn child.

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Speaker 1: So in that situation, the hospital must stabilize the threat

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Speaker 1: to the unborn child.

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Speaker 4: Yes, it was relatively unsurprising that Justice Alito was the

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Speaker 4: one to latch on to the language of unborn child

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Speaker 4: within m TALA. Now, we've been told that everyone is

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Speaker 4: now a textualist, that we look at the statute text

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Speaker 4: and that pretty much ends the discussion about what it requires.

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Speaker 4: And Pala's text is actually quite clear only in an

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Speaker 4: individual can have an emergency medical condition, and an individual

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Speaker 4: has to be someone who is born, and so a

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Speaker 4: fetus is not someone who is born. Now, there was

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Speaker 4: language related to unborn child added to Amtala to reflect

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Speaker 4: the fact that for a pregnant person that individual could

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Speaker 4: be in an emergency scenario if her own health were

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Speaker 4: in jeopardy or if the fetus's health was in jeopardy,

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Speaker 4: really affirming that emergency departments need to screen pregnant people

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Speaker 4: not only for the stability of their own health, but

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Speaker 4: to make sure the fetus isn't in distress.

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Speaker 2: Which of the Conservatives were like a leado, seeming to

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Speaker 2: be supporting Idaho's law.

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Speaker 4: Justice Gorsuch spoke out quite a bit in ways that

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Speaker 4: indicated affinity for Idaho's position. Justice Kavanaugh had an extended

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Speaker 4: exchange with Idaho over the question of whether there was

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Speaker 4: a conflict at all between Idaho law and federal law,

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Speaker 4: seemingly leaning very strongly towards the view that there was

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Speaker 4: no conflict between the two. Justice Barrett asked the sort

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Speaker 4: of wide range of questions I've read a number of

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Speaker 4: commentators now who suggests that her vote could be in question,

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Speaker 4: or perhaps that she was sympathetic to the position of

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Speaker 4: the United States. I think that's highly unlikely, just given

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Speaker 4: the reality of who Justice Fair is, and I think

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Speaker 4: often her questions in oral argument are not particularly indicative

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Speaker 4: of what her vote will ultimately be in the case.

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Speaker 2: So that makes five votes in favor of Idaho's ban

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Speaker 2: on abortion. Because we know where Justice Clarence Thomas stands.

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Speaker 4: It's hard for me to imagine that was my view

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Speaker 4: going in that the Supreme Court doesn't want to get

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Speaker 4: into five. I think there are really open questions after

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Speaker 4: the oral argument as to how it would get to

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Speaker 4: five on what particular facet or facets of this litigation.

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Speaker 4: You know, we though at least three justices sort of

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Speaker 4: play with the notion that maybe spending clause legislation can't

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Speaker 4: impose these kind of sub intensive obligations, which would be

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Speaker 4: sort of a bar reaching, de regulatory sort of analysis.

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Speaker 4: We saw Justice Thomas start off with that argument, and

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Speaker 4: then of course we have you know, Justice Kavanaugh really

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Speaker 4: pressing the idea that there might not be a conflict

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Speaker 4: between Idaho law and TALA, but presumably buying into Idaho's

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Speaker 4: argument that as long as you comply with state criminal law,

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Speaker 4: m TALA won't require you to do more. That there's

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Speaker 4: baked into the federal law the incorporation of state criminal law.

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Speaker 2: Could you tell where the Chief Justice was?

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Speaker 4: The Chief Justice said very little in the oral argument,

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Speaker 4: so I don't think he revealed much about where he

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Speaker 4: was coming.

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Speaker 2: Up next on the Bloomberg Law Show. I'll continue this

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Speaker 2: conversation with Professor Elizabeth Sepper of the University of Texas

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Speaker 2: Law School. Just how tense were they arguments? It seemed

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Speaker 2: like even the patients of the Solicitor General was tested.

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Speaker 2: I'm June Gross when you're listening to Bloomberg. A case

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Speaker 2: at the Supreme Court today pitts Idaho's near total ban

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Speaker 2: on abortion against a federal law that requires hospitals to

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Speaker 2: provide emergency healthcare. Ahead of the arguments, abortion rights advocates

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Speaker 2: were concerned that the case might be used to advance

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Speaker 2: the fight for fetal personhood, the idea that a fetus

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Speaker 2: would have the same rights as the pregnant woman. And

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Speaker 2: Justice Samuel Alito, who wrote the decision overturning the right

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Speaker 2: to abortion, sharply questioned the Solicitor General, Elizabeth Prelager about

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Speaker 2: his interpretation that the federal law imposes an equal duty

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Speaker 2: on the hospital to both the pregnant woman and the fetus,

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Speaker 2: whom he referred to as the unborn child. But the

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Speaker 2: Solicitor General pushed back forcefully.

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Speaker 1: So in that situation, the hospital must stabilize the threat

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Speaker 1: to the unborn child. And it seems that the plain

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Speaker 1: meaning is that the hospital must try to eliminate any

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Speaker 1: immediate threat to the child, but performing an abortion is

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Speaker 1: antithetic to that duty.

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Speaker 5: That stabilization obligation equally runs to her and makes clear

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Speaker 5: that the hospital has to give her necessary stabilizing treatment.

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Speaker 5: And in many of the cases you're thinking about, there

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Speaker 5: is no possible way to stabilize the unborn child because

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Speaker 5: the fetus is sufficiently before viability that it's inevitable that

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Speaker 5: the pregnancy is going to be lost. But Idaho would

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Speaker 5: deny women treatment in that circumstance, even though it's senseless.

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Speaker 2: I've been talking to Professor Elizabeth Sepper of the University

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Speaker 2: of Texas Law School. So did it seem as if

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Speaker 2: the Solicitor General, who is the consummate professional and excellent

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Speaker 2: in handling questions at these arguments, that she seemed to

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Speaker 2: be losing patients or frustrated a few times with the conservatives' questions,

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Speaker 2: particularly Justice Alito.

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Speaker 4: I mean, I think an important thing to note about

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Speaker 4: or argument. This is not just an opportunity to convince

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Speaker 4: the justices. It's an opportunity to speak to the American people,

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Speaker 4: and I think we saw the those that are general

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Speaker 4: doing that in multiple I think how she began her

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Speaker 4: argument by bringing the justices and the conversation back to

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Speaker 4: the experience of people on the ground in Idaho who

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Speaker 4: are being denied health saving pregnancy and abortion care was

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Speaker 4: one moment. But I think another moment was her interchange

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Speaker 4: with Justice Alito at the end, where he really was

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Speaker 4: suggesting that physicians need to save the unborn child and

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Speaker 4: that's what federal law requires, and she really pushed back

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Speaker 4: that the individual in Mtala is the woman and that

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Speaker 4: in some scenarios we're really talking about, and the very

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Speaker 4: premise of his question, he said, is that the pregnant

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Speaker 4: person does not get treatment to save her health, her organs,

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Speaker 4: her life. And I thought that was, you know, meant

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Speaker 4: more for us than it was to persuade Justice Alito,

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Speaker 4: who the Biden administration knows is unpersuadable in this case

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Speaker 4: and many others.

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Speaker 2: When you hear what the situation is in Idaho, now

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Speaker 2: what's happening and in other states that have these near

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Speaker 2: total bands, it's hard to imagine the Supreme Court doing

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Speaker 2: what it's likely to do, which is uphold this Idaho

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Speaker 2: law when you know, women's health is in jeopardy here.

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Speaker 4: Yeah, and m TALA matters quite a bit to a

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Speaker 4: narrow range of situations, to crisis situations. But those situations,

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Speaker 4: of course, are really life or health on the one side,

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Speaker 4: or people who are experiencing them. And I think in

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Speaker 4: red states or states that have abortion bands in place,

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Speaker 4: and TALA is what is less of protections for miscarriage

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Speaker 4: management and for abortion care in these crisis scenarios where

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Speaker 4: someone's being made quite sick from their pregnancies. So it

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Speaker 4: matters quite a bit under abortion bands, not just about Idaho.

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Speaker 4: It's about every state that has an abortion ban that

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Speaker 4: prohibits emergency abortion care in scenarios where MTALA would require

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Speaker 4: that care be offered to pregnant person. You know, it

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Speaker 4: might matter to states that have more liberal abortion policies

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Speaker 4: as well. And this is a real concern. How the

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Speaker 4: Court decides this case could have real implications beyond states

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Speaker 4: with abortion bands. You know, if you read the amicus briefs,

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Speaker 4: if you read the brief from the State of Idaho,

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Speaker 4: there's actually an argument being made that fetuses have equal

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Speaker 4: rights to pregnant people under federal law. And if that's right,

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Speaker 4: and a number of amicist briefs go this far, then

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Speaker 4: it is actually prohibited by ANTALA for a hospital to

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Speaker 4: perform an abortion, and that's federal law. That would be

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Speaker 4: the rule everywhere New York, California, Rhode Island.

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Speaker 2: Do you think that conservative justices would go so far

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Speaker 2: as to embrace this idea of fetal personhood.

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Speaker 4: It would not surprise me to see a concurrence that

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Speaker 4: makes the argument for statutory fetal personhood. That is that

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Speaker 4: with this nineteen eighty nine amendment to that added the

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Speaker 4: language of an unborn child in order to emphasize the

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Speaker 4: dual obligation to the pregnant person, that in fact m

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Speaker 4: Tala creates an obligation to the fetus that's equal to

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Speaker 4: the obligation to the pregnant person. I don't think that

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Speaker 4: we're going to have a majority of the court that

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Speaker 4: would be willing to go along with that, probably, but

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Speaker 4: we could easily see a concurrence that begins to build

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Speaker 4: fetal rights under federal statute.

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Speaker 2: So the decision here will it have definite implications for

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Speaker 2: states that have enacted these near total bands on abortion.

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Speaker 4: Yes, absolutely, So the court could side with the Biden administration.

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Speaker 4: If it sides with the Biden administration, then m TALA

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Speaker 4: preempts conflicting state laws. So to the extent a state

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Speaker 4: abortion band conflicts with m TALA, m TALA applies an

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Speaker 4: emergency department physicians would be free to provide abortion care

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Speaker 4: consistent with MTALA. If the court sides with the State

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Speaker 4: of Idaho, under virtually any rationale, it might decide the

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Speaker 4: opinion that will also affect other state laws. Because the

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Speaker 4: Idaho law is quite extreme, has a very narrow exception

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Speaker 4: only for life. So if there's no conflict between the

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Speaker 4: Idaho law and the federal and TALA, then there's no

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Speaker 4: conflict between MTALA and Texas law, for example, which has

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Speaker 4: a life as well as the substantial impairment of a

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Speaker 4: major bodily function exemption. Or perhaps even more worryingly, if

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Speaker 4: the idea is that IMPALA incorporates state law by reference,

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Speaker 4: so the standard of care is set by state law

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Speaker 4: rather than national medical practice, then I think that application

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Speaker 4: could apply beyond abortion to other sort of hot areas

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Speaker 4: where in particular Republican legislatures are trying to regulate medical

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Speaker 4: care and restrict medical care.

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Speaker 2: Let's say there are five votes to support Idaho's abortion ban.

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Speaker 2: Does the Court then tell the Biden administration you can't

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Speaker 2: enforce IPALA this way.

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Speaker 4: Because the idea would be simply that ATALA doesn't apply

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Speaker 4: as the Biden administration has said it applies, right, So

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Speaker 4: the rationale could be that MTALA only requires stabilizing treatment

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Speaker 4: consistent with state criminal law or state law period. That's

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Speaker 4: one of the lines that Idaho is pushing. So if

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Speaker 4: that's the notion, then state law is really the baseline,

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Speaker 4: not so much in TALA.

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Speaker 2: What does it indicate that the Supreme Court allowed the

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Speaker 2: Idaho law to take effect while they're hearing the case,

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Speaker 2: and also that they took the step unusual of bypassing

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Speaker 2: the federal appeals court level and you know, deciding to

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Speaker 2: directly review a federal trial court's ruling.

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Speaker 4: Yeah, I mean, it's a sign of where they are

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Speaker 4: headed and where they want to head past. And you know,

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Speaker 4: they're abundantly aware too that they have a cert petition

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Speaker 4: currently pending from the Biden administration involving a very similar

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Speaker 4: case out of Texas. It really raises that question squarely

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Speaker 4: about the interaction between state law and the federal and.

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Speaker 2: TALA does it seem clear that the Justices and particularly

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Speaker 2: Samuel Alito, who wrote the decision overturning Row, were wrong

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Speaker 2: and thinking that they were done dealing with abortion cases

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Speaker 2: by putting it in the hands of the states.

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Speaker 4: Yeah, the Corps has two abortion cases less than two

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Speaker 4: years after they overturn Roe v. Wade. And this is

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Speaker 4: clearly an issue that the Justices are going to see

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Speaker 4: over and over again with regard to AMTALA, with regard

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Speaker 4: to FDA, with regard to constitutional arguments related to the

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Speaker 4: right to travel, and so they I think they will

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Speaker 4: be regularly adjudicating cases involving abortion. And that's really a

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Speaker 4: legal landscape that the Supreme Court creative itself.

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Speaker 2: And will you explain the arguments around federal conscience protections.

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Speaker 4: One theme in the oral argument on Amtala were federal

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Speaker 4: conscience protections and these came up with regard to the

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Speaker 4: abortion pills oral arguments as well, And I think we

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Speaker 4: see some concerning developments here with regard to conscience protection.

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Speaker 4: So conscience protections are just the idea reflected in federal

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Speaker 4: and state law usually that people with religious or moral

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Speaker 4: objections to performing abortions can't be discriminated against usually can't

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Speaker 4: be required to perform abortions. This was fair enough. The

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Speaker 4: issue here, though, involves the interaction between emergency medicine and

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Speaker 4: conscience protections, and we got some very very disturbing statements,

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Speaker 4: I think, from the US government as to the position

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Speaker 4: of the US government on these laws. The US government

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Speaker 4: is now arguing that federal conscience protections allow not just

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Speaker 4: individual doctors, but entire institutions not to provide emergency abortion care.

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Speaker 4: This is shocking. This is shocking because with the Affordable

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Speaker 4: Care Act, there were lots of debates over this issue.

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Speaker 4: It was the position of everyone. The United States government

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Speaker 4: included that in emergency scenarios, there was no right to say,

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Speaker 4: my moral feelings would be hurt by this, and as

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Speaker 4: a result, you get to lose your kidney. This was

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Speaker 4: not a viable argument. How do I know that's true

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Speaker 4: because multiple times Republicans in Congress tried to amend the

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Speaker 4: law to allow exactly this to happen, to create a

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Speaker 4: conscience exemption related to MTALA. They failed each time. And

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Speaker 4: now we see the US government showing up in the

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Speaker 4: Supreme Court and in two arguments claiming that this right

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Speaker 4: exists it's a real problem because I think it opens

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Speaker 4: the door to religious institutions, and there are many in

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Speaker 4: healthcare to denying emergency abortion care, including in states where

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Speaker 4: abortions are legal and readily available, And that is really

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Speaker 4: seriously concerning because it goes much farther than even what say,

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Speaker 4: the US Conference of Catholic Bishops were arguing some twenty

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Speaker 4: years ago. It goes farther than what the Catholic Health

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Speaker 4: Association has that is required. And so I think we're

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Speaker 4: in a brave new world with regard to the invocation

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Speaker 4: of conscience constantly, regardless of the costs for human health

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Speaker 4: or human life.

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Speaker 2: And that's something you don't here talked about as much

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Speaker 2: as apparently we should be talking about it. Thanks so much, Liz.

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Speaker 2: That's Professor Elizabeth Zepper of the University of Texas Law School,

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Speaker 2: coming up next on the Bloomberg Law Show. The Chamber

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Speaker 2: of Commerce is already suing to block the FTC's newly

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Speaker 2: announced non compete ban. I'm June Grasso, and you're listening

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Speaker 2: to Bloomberg. Business groups, led by the US Chamber of

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Speaker 2: Commerce sued the Federal Trade Commission today to try to

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Speaker 2: block a rule finalized this week that would outlaw non competes.

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Speaker 2: Those are provisions that prohibit workers from switching jobs within

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Speaker 2: an industry. The Chamber argued that the FTC lacks the

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Speaker 2: authority to issue rules that define unfair methods of competition.

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Speaker 2: The regulator has argued that its legal authority is crystal

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Speaker 2: clear in the FTC Act. Joining me is Bloomberg reporter

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Speaker 2: Leeaan Nylan Leah. Let's start with the FTC's ban on

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Speaker 2: non competes. Tell us about it.

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Speaker 6: Yeah, so the FTFP voted to adopt what's a nearly

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Speaker 6: complete ban on non competes going forward. So after the

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Speaker 6: rule takes into sorry, after the rule goes into effect,

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Speaker 6: there will be no more non competes, which are essentially

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Speaker 6: just clauses in employee contras that forbid them from switching

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Speaker 6: jobs within an industry. There's a couple tiny carve out.

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Speaker 1: One.

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Speaker 6: If you are an executive who is currently subject to

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Speaker 6: a noncompete, and they define an executive as somebody who

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Speaker 6: makes more than one hundred and fifty thousand dollars per

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Speaker 6: year and has a policy position within your organization, you

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Speaker 6: can still be subject to your current noncompete, but executives

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Speaker 6: going forward, cannot enter into new ones. And the other

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Speaker 6: sort of tiny caveat they made is if you are

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Speaker 6: selling a business, you can be subject to a noncompete

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Speaker 6: because they're trying to prevent essentially, you know a thing

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Speaker 6: where somebody who is a startup founder or something sells

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Speaker 6: their business to someone and then goes out the next

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Speaker 6: day and starts the same business under a different name.

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Speaker 6: You know, businesses do want a little bit of comfort

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Speaker 6: that when they buy something they are getting all of

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Speaker 6: the assets and sort of knowledge there.

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Speaker 2: Many people still think of non competes as being for

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Speaker 2: executives people with trade CDs, but nowadays they even applied

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Speaker 2: to blue collar workers and minimum wage workers.

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Speaker 6: Yes, the FTC started this initiative a couple of years ago.

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Speaker 6: They started it with a workshop in which they had

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Speaker 6: academics who had studied this come in, and they also

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Speaker 6: had some state lawmakers because before now non commutes were

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Speaker 6: largely regulated at the state industry and there was It

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Speaker 6: was actually a pretty interesting workout workshop that happened during

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Speaker 6: the Coup administration. The attorneys general from Illinois and a

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Speaker 6: couple other states had come and talked about how they

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Speaker 6: had found that there were like a weird proliferation of

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Speaker 6: these in a lot of as you mentioned, like minimum

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Speaker 6: wage jobs. Like there ended up being a pretty famous

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Speaker 6: one involving the sandwich Shane Jimmy Jones and which it

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Speaker 6: was trying to prevent it's sandwich makers from going anywhere

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Speaker 6: else that made sandwiches. They had a pretty detailed list

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Speaker 6: of things that they couldn't do, including like making pedas

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Speaker 6: or making hogies. All of these types of sandwiches you

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Speaker 6: couldn't go somewhere else that made them. They found out

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Speaker 6: in Washington State people were doing it at coffee shops,

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Speaker 6: you know. They didn't want baristas moving around. It's fairly

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Speaker 6: common among hairdressers, so yes, well, it's sort of associated

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Speaker 6: with executives in very like well compensated employees. It had

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Speaker 6: really like proliferated around the economy to a lot of

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Speaker 6: lower wage jobs, and even some that you might be

438
00:27:30,359 --> 00:27:34,120
Speaker 6: surprised by, like doctors and nurses were often being asked

439
00:27:34,160 --> 00:27:35,920
Speaker 6: to sign non compete.

440
00:27:35,359 --> 00:27:40,679
Speaker 2: Well, sandwich makers also surprises me. Getting a band like this.

441
00:27:40,880 --> 00:27:44,000
Speaker 2: President Biden directed the FTC to get a band like

442
00:27:44,040 --> 00:27:46,920
Speaker 2: this more than two years ago, so high priority for

443
00:27:46,960 --> 00:27:47,720
Speaker 2: the administration.

444
00:27:49,000 --> 00:27:51,840
Speaker 6: Yes, Joe Biden signed this executive order his first year,

445
00:27:51,920 --> 00:27:54,919
Speaker 6: the Executive Order on competition, And he actually says in

446
00:27:54,960 --> 00:27:56,879
Speaker 6: some of his public speaking that's the thing that first

447
00:27:56,880 --> 00:27:59,320
Speaker 6: made him very interested in the issue of competition was

448
00:27:59,359 --> 00:28:02,680
Speaker 6: when he was on the campaign trail during the last

449
00:28:02,680 --> 00:28:05,720
Speaker 6: election and hearing from a number of workers who had

450
00:28:05,760 --> 00:28:08,320
Speaker 6: mentioned to him non competes and that really sort of

451
00:28:08,320 --> 00:28:10,720
Speaker 6: struck him as wrong. You know, like non competes are

452
00:28:10,840 --> 00:28:14,359
Speaker 6: very a fundamental restraint of trade, as people say, you know,

453
00:28:14,560 --> 00:28:16,879
Speaker 6: it is literally preventing a worker from going out and

454
00:28:16,880 --> 00:28:19,480
Speaker 6: trying to get a better job that pays them, pays

455
00:28:19,520 --> 00:28:24,960
Speaker 6: them well. And particularly when you have you know, people

456
00:28:25,000 --> 00:28:27,800
Speaker 6: who have skills that require some kind of licensing within

457
00:28:27,840 --> 00:28:31,919
Speaker 6: a state, even like medical, medical or even hairdressers. You know,

458
00:28:32,840 --> 00:28:34,639
Speaker 6: when you move, if you try and move out of

459
00:28:34,640 --> 00:28:36,280
Speaker 6: state to get another job, you have to go through

460
00:28:36,320 --> 00:28:39,440
Speaker 6: the process of getting your recertification. It's very expensive. So

461
00:28:39,920 --> 00:28:42,760
Speaker 6: these non competes can have a pretty serious impact on

462
00:28:42,800 --> 00:28:45,680
Speaker 6: people's everyday lives when you really can't go and work

463
00:28:45,760 --> 00:28:47,000
Speaker 6: for a competitor.

464
00:28:47,320 --> 00:28:50,240
Speaker 2: So, but this was a narrow three to two vote.

465
00:28:50,440 --> 00:28:51,720
Speaker 2: It went down party lines.

466
00:28:52,640 --> 00:28:52,840
Speaker 1: Yes.

467
00:28:53,040 --> 00:28:55,640
Speaker 5: So the SEC is a.

468
00:28:55,640 --> 00:28:58,760
Speaker 6: Five member body. It has three Democrats right now, because

469
00:28:58,760 --> 00:29:01,520
Speaker 6: the Democrats are in the major and then two Republicans,

470
00:29:02,160 --> 00:29:04,520
Speaker 6: and they did vote along party lines. Both of the

471
00:29:04,640 --> 00:29:09,160
Speaker 6: Republicans in their votes. They gave public statements about them

472
00:29:09,480 --> 00:29:12,320
Speaker 6: during the Open Commission meeting earlier this week, and they

473
00:29:12,360 --> 00:29:15,000
Speaker 6: said that while they sort of agree in principles that

474
00:29:15,160 --> 00:29:19,960
Speaker 6: noncompetes are problematic, they are concerned that the FTC does

475
00:29:20,000 --> 00:29:22,720
Speaker 6: not have the authority to issue this type of rule,

476
00:29:23,200 --> 00:29:26,120
Speaker 6: and that is what various lawsuits that have now been

477
00:29:26,200 --> 00:29:29,120
Speaker 6: filed a challenging the rule have also said because there

478
00:29:29,200 --> 00:29:31,520
Speaker 6: is a little bit of a question about whether the

479
00:29:31,560 --> 00:29:34,520
Speaker 6: FTC Statute as written would allow them to have this rule.

480
00:29:34,920 --> 00:29:38,720
Speaker 2: So the Chamber of Commerce, the nation's largest business lobby,

481
00:29:38,880 --> 00:29:42,360
Speaker 2: is one of those suing. Is that what they're alleging

482
00:29:42,400 --> 00:29:44,400
Speaker 2: that the FDC just doesn't have the authority here.

483
00:29:45,280 --> 00:29:47,760
Speaker 6: Yes, they have two major arguments, but first being the

484
00:29:47,840 --> 00:29:49,920
Speaker 6: FTC does not have the authority to issue this type

485
00:29:49,960 --> 00:29:53,400
Speaker 6: of rule. So the SEC says it does because the

486
00:29:53,440 --> 00:29:56,760
Speaker 6: FTC Act allows them to prohibit what are known as

487
00:29:56,840 --> 00:30:00,000
Speaker 6: unfair methods of competition, and so in the rule they said,

488
00:30:00,080 --> 00:30:02,920
Speaker 6: this is an unfair method of competition, and the SEC

489
00:30:03,040 --> 00:30:05,480
Speaker 6: Act also has another section that says that they are

490
00:30:05,560 --> 00:30:09,120
Speaker 6: allowed to issue rules and regulations to help enforce the law.

491
00:30:09,520 --> 00:30:12,040
Speaker 6: So to the Democrats on the FTC, they think that

492
00:30:12,120 --> 00:30:14,640
Speaker 6: makes it pretty clear that they are allowed to issue

493
00:30:14,920 --> 00:30:17,880
Speaker 6: a rule of this type. The Republicans say, you know,

494
00:30:18,080 --> 00:30:22,520
Speaker 6: historically the FTC has prohibited unfair methods of competition by

495
00:30:22,560 --> 00:30:27,000
Speaker 6: individual enforcement actions, and very rarely has that actually gone

496
00:30:27,120 --> 00:30:30,840
Speaker 6: through with a rule making. The last time they had

497
00:30:31,440 --> 00:30:35,360
Speaker 6: a rule making that used this unfair methods of competition

498
00:30:35,560 --> 00:30:38,920
Speaker 6: statute on its own to make a rule with something

499
00:30:38,960 --> 00:30:43,560
Speaker 6: like the nineteen seventies, and generally they make rules under

500
00:30:43,600 --> 00:30:47,160
Speaker 6: some of their other authorities. So that is like one

501
00:30:47,280 --> 00:30:50,920
Speaker 6: half of the Chamber of Commerce's lawsuits. The other half is,

502
00:30:50,960 --> 00:30:54,200
Speaker 6: you know, the Supreme Court in a case recently said

503
00:30:54,240 --> 00:30:58,680
Speaker 6: that they have concerns when agencies act on major questions,

504
00:30:59,200 --> 00:31:02,080
Speaker 6: and so the Chamber of Commerce is also sort of

505
00:31:02,680 --> 00:31:07,000
Speaker 6: challenging the FTC's on compete van under this major questions doctrine.

506
00:31:07,280 --> 00:31:09,840
Speaker 6: You know, that's the idea that if Congress really did

507
00:31:09,880 --> 00:31:11,920
Speaker 6: want you to solve this major question, they would have

508
00:31:11,920 --> 00:31:15,320
Speaker 6: been very very explicit in the statute that this was

509
00:31:15,360 --> 00:31:17,880
Speaker 6: the sort of action that the agency could take.

510
00:31:18,520 --> 00:31:21,400
Speaker 2: And also the Supreme Court. The conservative members of the

511
00:31:21,440 --> 00:31:24,400
Speaker 2: Supreme Court are on sort of a mission against the

512
00:31:24,440 --> 00:31:29,520
Speaker 2: administrative state, and there are several cases involving the reach

513
00:31:29,560 --> 00:31:33,200
Speaker 2: of agency powers. So do people you've talked to think

514
00:31:33,240 --> 00:31:35,560
Speaker 2: that the Chamber has a good case here?

515
00:31:36,880 --> 00:31:40,560
Speaker 6: It's pretty much right now, following along party lines, you know,

516
00:31:41,200 --> 00:31:43,960
Speaker 6: the STC did have a challenge to its authority to

517
00:31:43,960 --> 00:31:47,240
Speaker 6: make rules back in the nineteen seventies that took place

518
00:31:47,240 --> 00:31:49,720
Speaker 6: here in the DC Circuit. That's part of the reason

519
00:31:49,760 --> 00:31:52,120
Speaker 6: why the Chamber opted to do in Texas, which is

520
00:31:52,160 --> 00:31:55,760
Speaker 6: in the more conservative Fifth Circuit, because if they had

521
00:31:55,760 --> 00:31:58,040
Speaker 6: filed here, you know, they would probably refer back to

522
00:31:58,080 --> 00:32:00,320
Speaker 6: this nineteen seventies case that says, yes, we think the

523
00:32:00,360 --> 00:32:05,560
Speaker 6: FTC has this authority. But by filing in a new circuit,

524
00:32:05,640 --> 00:32:07,880
Speaker 6: you know, they can sort of have that circuit take

525
00:32:07,960 --> 00:32:11,120
Speaker 6: the question up a new potentially creating a circuit split

526
00:32:11,160 --> 00:32:12,840
Speaker 6: that they could then take up to the Supreme Court.

527
00:32:13,440 --> 00:32:16,600
Speaker 2: And what other groups are suing besides the Chamber, So the.

528
00:32:16,520 --> 00:32:18,920
Speaker 6: Chair of Commerce and the Business round Table are too,

529
00:32:19,320 --> 00:32:22,400
Speaker 6: alongside some local chambers of commerce in Texas. That's how

530
00:32:22,400 --> 00:32:26,800
Speaker 6: they got venues in Texas. There was also a tax

531
00:32:26,880 --> 00:32:32,840
Speaker 6: firm that filed its own lawsuit, and yeah, we've been

532
00:32:33,000 --> 00:32:35,120
Speaker 6: We've been getting a couple others since the day has

533
00:32:35,520 --> 00:32:39,240
Speaker 6: gone on of various people who are filing. When the

534
00:32:39,400 --> 00:32:41,800
Speaker 6: SEC announced this, there were a bunch of business groups

535
00:32:41,800 --> 00:32:46,960
Speaker 6: that came out against it, including HR professionals, associations, a

536
00:32:46,960 --> 00:32:50,760
Speaker 6: lot of professional associations like actuaries, things like that came

537
00:32:50,800 --> 00:32:53,840
Speaker 6: out sort of against the idea of banning non competes.

538
00:32:53,960 --> 00:32:56,800
Speaker 2: It's going in hundreds of millions of dollars to workers wages.

539
00:32:56,920 --> 00:32:59,560
Speaker 2: Is that why business groups are mostly against it? Or

540
00:32:59,600 --> 00:33:02,640
Speaker 2: are there are other reasons besides money money money.

541
00:33:02,920 --> 00:33:07,080
Speaker 6: The business groups say that noncompete are useful for sort

542
00:33:07,120 --> 00:33:10,120
Speaker 6: of protecting business information. So you know, you don't really

543
00:33:10,160 --> 00:33:13,000
Speaker 6: want to hire an employee and then have them the

544
00:33:13,040 --> 00:33:15,680
Speaker 6: next day go across the street to your biggest rival

545
00:33:15,720 --> 00:33:18,960
Speaker 6: and tell them all of your customers or your business

546
00:33:18,960 --> 00:33:22,800
Speaker 6: plans and strategy. The SEC says in response, you know,

547
00:33:23,040 --> 00:33:25,400
Speaker 6: there are all sources of other laws that you could,

548
00:33:26,280 --> 00:33:31,000
Speaker 6: you know, use to address that trade secret law, non

549
00:33:31,040 --> 00:33:34,520
Speaker 6: solicitation clauses, things like that, so you don't really need

550
00:33:34,560 --> 00:33:39,000
Speaker 6: a non compete which effectively bars them from taking another job.

551
00:33:39,160 --> 00:33:42,040
Speaker 6: The other aspects of the STC left open in the

552
00:33:42,120 --> 00:33:45,640
Speaker 6: rule is that you could offer an employee garden leave

553
00:33:45,840 --> 00:33:48,120
Speaker 6: is sort of what it's known as, which is where

554
00:33:48,160 --> 00:33:52,040
Speaker 6: you are requiring them not to take another job for

555
00:33:52,040 --> 00:33:54,360
Speaker 6: a certain period of time, but you are continuing to

556
00:33:54,400 --> 00:33:57,120
Speaker 6: pay them either a salary or some sort of compensation

557
00:33:57,920 --> 00:34:01,240
Speaker 6: to make up for the fact that they can't take

558
00:34:01,280 --> 00:34:03,680
Speaker 6: this other job. That way, when they go to a

559
00:34:03,800 --> 00:34:06,680
Speaker 6: new employer, like the information they have about your company

560
00:34:06,720 --> 00:34:07,960
Speaker 6: is at least a little bit dated.

561
00:34:08,520 --> 00:34:11,520
Speaker 2: With the proposed rule making, there was a solicitation of

562
00:34:11,560 --> 00:34:14,880
Speaker 2: public comments. What did they say about the comments that

563
00:34:14,920 --> 00:34:15,400
Speaker 2: they got.

564
00:34:16,239 --> 00:34:19,399
Speaker 6: Yes, so the FEC got twenty six thousand comments, which

565
00:34:19,480 --> 00:34:23,600
Speaker 6: is a lot for the FPC. Oftentimes they put out

566
00:34:23,600 --> 00:34:25,719
Speaker 6: for public comments and onnly get a couple hundred. So

567
00:34:26,160 --> 00:34:28,760
Speaker 6: they were pleasantly surprised that they got twenty six thousand.

568
00:34:29,080 --> 00:34:32,360
Speaker 6: Of the twenty six twenty five thousand were actually in

569
00:34:32,400 --> 00:34:35,919
Speaker 6: support of the rule, which is one of the things

570
00:34:35,960 --> 00:34:39,840
Speaker 6: that they cited for a reason why they felt comfortable

571
00:34:39,840 --> 00:34:42,040
Speaker 6: and we're moving forward with this. And in the rule

572
00:34:42,040 --> 00:34:44,640
Speaker 6: itself they cited a bunch of them from individuals who

573
00:34:44,680 --> 00:34:49,280
Speaker 6: talked about how non competes had significantly impacted their lives,

574
00:34:49,400 --> 00:34:52,359
Speaker 6: preventing them from taking, you know, other jobs, or when

575
00:34:52,400 --> 00:34:54,720
Speaker 6: they did try and take another job, they got sued.

576
00:34:54,960 --> 00:34:57,400
Speaker 6: As I mentioned before, a lot of non competes before

577
00:34:57,440 --> 00:34:59,960
Speaker 6: this rule were really handled an estate by state basin,

578
00:35:00,640 --> 00:35:03,400
Speaker 6: and because of that, you know, you would often have

579
00:35:03,480 --> 00:35:05,920
Speaker 6: to go to court to see if a noncompete was

580
00:35:06,040 --> 00:35:08,640
Speaker 6: enforceable or not. And the average person doesn't have a

581
00:35:08,680 --> 00:35:12,839
Speaker 6: lot of experience with courts or suing over contracts, and

582
00:35:12,920 --> 00:35:15,719
Speaker 6: so when you know an employer might threaten to see them,

583
00:35:15,760 --> 00:35:18,480
Speaker 6: that was sometimes enough to keep them from trying to

584
00:35:18,560 --> 00:35:20,319
Speaker 6: change stobs because they don't really want to have to

585
00:35:20,320 --> 00:35:20,759
Speaker 6: deal with that.

586
00:35:21,400 --> 00:35:25,200
Speaker 2: Does the FTC or the Biden administration expect this to have,

587
00:35:25,600 --> 00:35:29,560
Speaker 2: you know, a broad effect on the workplace or the workforce.

588
00:35:30,440 --> 00:35:34,440
Speaker 6: Yes, So the SEC did some of its own calculations

589
00:35:34,480 --> 00:35:37,759
Speaker 6: on how broad this might be. They estimated that it

590
00:35:37,800 --> 00:35:40,760
Speaker 6: would impact wages to the two no four hundred billion

591
00:35:41,120 --> 00:35:45,160
Speaker 6: billion dollars over the next ten years. They also, however,

592
00:35:45,200 --> 00:35:47,760
Speaker 6: said that they think that it may help with small

593
00:35:47,760 --> 00:35:50,960
Speaker 6: business formation because when people are no longer subject to

594
00:35:51,000 --> 00:35:53,000
Speaker 6: a noncompete, they can go out and start their own

595
00:35:53,000 --> 00:35:56,759
Speaker 6: businesses in the same industry. And so they had some

596
00:35:56,920 --> 00:36:00,000
Speaker 6: research that they did showing that it would increase new

597
00:36:00,080 --> 00:36:02,520
Speaker 6: business formation by as much as two point seven percent

598
00:36:02,520 --> 00:36:05,120
Speaker 6: a year. So their findings were largely that this would

599
00:36:05,120 --> 00:36:07,200
Speaker 6: have a positive impact on the economy.

600
00:36:07,480 --> 00:36:11,640
Speaker 2: Thanks so much, Leah. That's Leah Nylan, Bloomberg Antitrust Reporter.

601
00:36:12,160 --> 00:36:14,839
Speaker 2: And that's it for this edition of the Bloomberg Law Podcast.

602
00:36:15,200 --> 00:36:17,560
Speaker 2: Remember you can always get the latest legal news by

603
00:36:17,600 --> 00:36:21,440
Speaker 2: subscribing and listening to the show on Apple Podcasts, Spotify,

604
00:36:21,719 --> 00:36:25,560
Speaker 2: and at Bloomberg dot com, slash podcast, Slash Law. I'm

605
00:36:25,640 --> 00:36:28,080
Speaker 2: June Grosso and this is Bloomberg