WEBVTT - Ban on Noncompetes Tossed & Transgender Student Protections 0:00:03.200 --> 0:00:08.280 This is Bloomberg Law, with June Brusso from Bloomberg Radio. 0:00:10.640 --> 0:00:14.560 A Texas judge struck down the FTC's ban on non 0:00:14.600 --> 0:00:18.680 compete agreements before the ban even went into effect, blocking 0:00:18.720 --> 0:00:23.160 the agency's effort to make labor markets more competitive. Non 0:00:23.200 --> 0:00:28.160 Compete agreements have become increasingly common, with an estimated twenty 0:00:28.200 --> 0:00:32.720 percent of workers that's about thirty million Americans subject to them. 0:00:33.159 --> 0:00:37.800 Last January, President Joe Biden touted the FTC's overhaul of 0:00:37.840 --> 0:00:42.760 the rules, saying non compete clauses are overused and often 0:00:42.840 --> 0:00:47.560 make it unnecessarily difficult for average working Americans to get 0:00:47.600 --> 0:00:48.440 better jobs. 0:00:48.760 --> 0:00:52.680 That's another thing to say you're working for a subway 0:00:53.200 --> 0:00:56.240 and you can't walk across the street and go to 0:00:56.360 --> 0:00:59.080 Jimmy Johns and get a twenty cent raise. What tells 0:00:59.120 --> 0:01:01.520 that all about others and keeping wages down? 0:01:02.240 --> 0:01:06.000 But Texas Judge Ada Brown, a Trump appointee, said the 0:01:06.120 --> 0:01:09.959 FTC lacked the authority to enact the non compete ban 0:01:10.360 --> 0:01:13.520 and tossed it out. Joining me is William Kavasik, a 0:01:13.560 --> 0:01:16.679 professor at GW Law School and the former chair of 0:01:16.720 --> 0:01:17.520 the FTC. 0:01:18.200 --> 0:01:19.800 The judge said. 0:01:19.640 --> 0:01:23.120 In her twenty seven page ruling that the FTC's proposed 0:01:23.200 --> 0:01:27.679 rule was arbitrary and capricious and would cause irreparable harm. 0:01:27.840 --> 0:01:30.399 Can you tell us more about her decision? 0:01:31.000 --> 0:01:35.720 Judge Brown had two grounds for suspending the implementation of 0:01:35.760 --> 0:01:38.840 the rule vacating it. The first is the one you mentioned, 0:01:38.840 --> 0:01:42.640 which is that the FDC lacked an adequate basis to 0:01:42.760 --> 0:01:46.000 support the scope and the complete reach of the rule. 0:01:46.120 --> 0:01:49.280 That is, the rule applies to a very broad range 0:01:49.280 --> 0:01:52.160 of employment contracts. There are a couple of carbouts, but 0:01:52.560 --> 0:01:57.200 the judge concluded that you lacked a sufficient evidentiary basis 0:01:57.280 --> 0:02:00.680 to implement that rule, and therefore the rule itself as 0:02:00.800 --> 0:02:04.520 arbitrary and caprecious. The second basis for rejecting the rule 0:02:04.960 --> 0:02:08.240 is her conclusion that the FDC lacks the legal authority 0:02:08.440 --> 0:02:13.519 to adopt rules involving competition policy. That is, substantive competition 0:02:13.639 --> 0:02:16.920 rules are beyond the FDC's remit. This involved a fairly 0:02:17.080 --> 0:02:21.360 elaborate and technical analysis the FDC's authority going back to 0:02:21.480 --> 0:02:25.880 nineteen fourteen when Congress established the FDC Act and coming forward, 0:02:25.960 --> 0:02:29.800 but her review of the original framework and its subsequent 0:02:29.800 --> 0:02:34.320 evolution to the FTC simply lacks legal authority to adopt 0:02:34.360 --> 0:02:36.760 and apply such a rule, so that on that basis 0:02:36.760 --> 0:02:39.200 as well, the rule was suspended. 0:02:39.480 --> 0:02:41.600 Do you agree with her reasoning. 0:02:41.360 --> 0:02:44.640 On the second point. I do. It's always difficult to 0:02:44.720 --> 0:02:47.920 decide when you have a good fit between the substantive 0:02:48.000 --> 0:02:50.839 rule and the underlying basis. I think what's a matter 0:02:50.919 --> 0:02:54.520 of concern is that, first, it's an extraordinarily broad rule 0:02:54.600 --> 0:02:58.120 and unashamably it applies to the laws that have forty 0:02:58.120 --> 0:03:02.480 eight states that currently allowed various forms of noncompete. It involves, 0:03:02.560 --> 0:03:05.960 as the FTC emphasized, hundreds of billions of dollars of wages. 0:03:06.080 --> 0:03:09.240 There are tremendous economic stakes here. This is very clearly 0:03:09.320 --> 0:03:14.880 a major extension of the FDC's oversight role in labor 0:03:15.040 --> 0:03:17.640 related agreements. You would think that for a measure of 0:03:17.680 --> 0:03:20.560 that art you would have to have a fairly extensive 0:03:20.600 --> 0:03:23.640 and careful review of the existing literature pro and con. 0:03:23.960 --> 0:03:26.400 I would say, in many ways, the SEC took shortcuts 0:03:26.400 --> 0:03:29.400 on that and tended to brush aside views that it 0:03:29.520 --> 0:03:32.600 found to be incompatible with its policy preferences. And I 0:03:32.639 --> 0:03:35.440 think that did create a real vulnerability with respect to 0:03:35.480 --> 0:03:38.920 the arbitrary and capricious issue you argue about the FDC's 0:03:38.960 --> 0:03:42.600 authority is ambiguous. There are certainly plausible arguments that the 0:03:42.640 --> 0:03:46.080 FDC has the authority. My intuition is that given the 0:03:46.120 --> 0:03:51.360 current direction of Supreme Court jurisprudence involving the grant of 0:03:51.440 --> 0:03:55.760 authority to administrative agencies and the effort that administrative agencies 0:03:55.840 --> 0:03:59.000 regulators to interpret their authority in a way to meet 0:03:59.040 --> 0:04:02.640 new conditions and to stretch in some sense the application 0:04:02.760 --> 0:04:06.040 of their authority, the current Supreme Court is skeptical about that. 0:04:06.200 --> 0:04:08.200 The current Supreme Court says, if you want to do 0:04:08.320 --> 0:04:11.400 bold thing and to apply the law in a broad way, 0:04:11.720 --> 0:04:14.480 we want you to anchor that in a clear statement 0:04:14.520 --> 0:04:18.320 of congressional purpose. That Congress to allow you to do 0:04:18.400 --> 0:04:21.800 bold things has to say so. Clearly, the direction of 0:04:21.960 --> 0:04:26.640 travel of this doctrine runs against the philosophy the interpretation 0:04:26.800 --> 0:04:30.320 approach that the FDC is relying on. Here. Goodness knows 0:04:30.360 --> 0:04:34.000 how the Supreme Court would ultimately evaluate the rule. I 0:04:34.040 --> 0:04:37.039 haven't talked to them today, so I don't know exactly 0:04:37.120 --> 0:04:40.360 what they'll do. But my inference from the current direction 0:04:40.760 --> 0:04:44.080 of their jurisprudence and the attitude that's embedded in that 0:04:44.160 --> 0:04:47.680 jurisprudence is that this rule would have a very difficult 0:04:47.680 --> 0:04:50.440 time surviving review as it goes up to the court, 0:04:50.800 --> 0:04:53.560 and that Judge Brown's ruling here is quite likely to 0:04:53.600 --> 0:04:54.280 be sustained. 0:04:54.600 --> 0:04:57.080 If the rule had been narrower, let's say it just 0:04:57.120 --> 0:05:00.440 applied to low and middle income workers, I think that 0:05:00.560 --> 0:05:01.880 it would have passed. 0:05:01.720 --> 0:05:03.960 Mustard, I think June if it had been limited in 0:05:04.000 --> 0:05:07.480 that way. If it had been limited to say, low 0:05:07.520 --> 0:05:11.240 income workers who were engaged in applying skills that arguably 0:05:11.279 --> 0:05:14.760 don't involve the special training and conveying of know how 0:05:14.960 --> 0:05:17.200 that might take place in other settings. If it had 0:05:17.240 --> 0:05:22.200 been tailored to that specific concern, I think the rule 0:05:22.200 --> 0:05:25.880 would have had a better chance of sidestepping the arbitrarrian 0:05:25.960 --> 0:05:29.800 capricious ruling that Judge Brown found here. It would still 0:05:30.080 --> 0:05:33.520 perhaps run into the concern about whether the FDC has 0:05:33.600 --> 0:05:36.120 the authority in the first place. That is, Judge Brown's 0:05:36.120 --> 0:05:39.640 conclusion that the FDC lacks authority would mean that even 0:05:39.680 --> 0:05:43.159 a narrower rule would not be permissible unless Congress would 0:05:43.200 --> 0:05:46.080 have come back and clearly give the authority to do it. 0:05:46.200 --> 0:05:48.560 But I think a narrower rule would have had a 0:05:48.640 --> 0:05:52.159 stronger chance of surviving review in two respects. One is 0:05:52.160 --> 0:05:54.680 that it would be less likely to be found arbitrary 0:05:54.680 --> 0:05:57.480 and capricious, and the other is that there's another issue 0:05:57.520 --> 0:06:00.720 looking in the background, where the Supreme Court recently has said, 0:06:00.920 --> 0:06:06.120 if you purport to do path breaking economically significant things 0:06:06.160 --> 0:06:09.800 by rule making, you have to point to specific grant 0:06:09.839 --> 0:06:12.560 of legislative authority to do that. In other words, as 0:06:12.560 --> 0:06:16.760 the Court is said, where your initiative raises major questions 0:06:17.320 --> 0:06:20.599 about the operation of the economy, for example, you have 0:06:20.760 --> 0:06:24.440 to be able to show more precisely that Congress intended 0:06:24.520 --> 0:06:27.719 for you to address those major questions and to adopt 0:06:27.880 --> 0:06:30.960 rules to treat them. That is the basis on which 0:06:31.160 --> 0:06:34.960 yet another court in Florida, Federal Court in Florida issued 0:06:35.000 --> 0:06:38.560 a preliminary injunction concerning the application of the rule. So 0:06:38.600 --> 0:06:42.120 when we take all of these, I would say, skeptical 0:06:42.240 --> 0:06:47.560 streams of jurisprudence, the FTC is traveling into a very 0:06:47.600 --> 0:06:51.320 difficult storm, and that a narrower rule would have helped 0:06:51.400 --> 0:06:55.560 avoid the arbitrary and capricious ruling. A narrower rule would 0:06:55.560 --> 0:06:59.920 be less likely to raise concerns under the major question doctrine, 0:07:00.120 --> 0:07:03.680 but even a narrower rule would run into the concern 0:07:03.800 --> 0:07:06.719 that Judge Brown showed that the Commission just doesn't have 0:07:06.760 --> 0:07:09.920 authority to issue any rules involving competition. 0:07:10.840 --> 0:07:14.520 How about another agency doing this? The National Labor Relations 0:07:14.520 --> 0:07:18.560 Board's top lawyer is moving ahead with an enforcement strategy 0:07:18.720 --> 0:07:23.840 to make restrictive covenants illegal. General Counsel Jennifer Brusso says 0:07:24.160 --> 0:07:28.120 such packs deny workers the ability to quit or change jobs, 0:07:28.400 --> 0:07:32.440 which in turn interferes with exercising their organizing rights in 0:07:32.480 --> 0:07:35.960 their current positions for fear of being fired and not 0:07:36.040 --> 0:07:38.880 being able to obtain new employment. Do you think of 0:07:39.040 --> 0:07:41.120 rule by the NLRB would survive. 0:07:41.480 --> 0:07:45.560 I'm less familiar tune with the specific grant of authority 0:07:45.640 --> 0:07:48.640 that the NLRB would be relying upon, certainly in the 0:07:48.680 --> 0:07:52.120 application of its adjudication function, that is, in the prosecution 0:07:52.240 --> 0:07:54.960 of individual cases, it would be less likely to run 0:07:55.000 --> 0:07:58.120 into the question whether it has rule making authority, which 0:07:58.160 --> 0:08:01.200 is the issue in the FTC proceeding. The question for 0:08:01.240 --> 0:08:05.960 the NLRB would be in its law enforcement capacity. Has 0:08:06.120 --> 0:08:10.440 it appropriately interpreted the mandate the Congress gave it, and 0:08:10.720 --> 0:08:14.560 would reviewing courts conclude that its interpretation of its The 0:08:14.640 --> 0:08:20.160 law enforcement mission encompasses the concerns that the NLRB Solicitor 0:08:20.200 --> 0:08:24.600 General has raised about noncompete. So the NLRB might be 0:08:24.640 --> 0:08:27.280 in a position to challenge these I don't know if 0:08:27.320 --> 0:08:29.760 they mean to do it by rulemaking. And I would 0:08:29.800 --> 0:08:34.199 add that the FDC does have authority to challenge individual 0:08:34.320 --> 0:08:38.760 non compete agreements using its law enforcement mandate. It has 0:08:38.920 --> 0:08:42.559 a law enforcement mandate to prohibit unfair deceptive acts or 0:08:42.640 --> 0:08:46.600 practices or unfair methods of competition that involves case by 0:08:46.640 --> 0:08:51.120 case adjudication to challenge specific arrangements. That authority is not 0:08:51.440 --> 0:08:54.880 endangered in the challenges that are present in the federal 0:08:54.880 --> 0:08:58.480 courts now, the FDC can continue to do that. That 0:08:58.600 --> 0:09:01.720 has the disadvantage that you go step by step and 0:09:01.760 --> 0:09:05.640 you don't have the capacity necessarily to adopt a broad 0:09:05.720 --> 0:09:10.200 based prohibition that applies across the country and condemns all 0:09:10.240 --> 0:09:14.400 of the arrangements. It's a more laborious way to get 0:09:14.440 --> 0:09:17.240 to the final destination that you wish to achieve. That 0:09:17.400 --> 0:09:20.679 task is still open to the FDC. That kind of 0:09:20.720 --> 0:09:24.280 litigation I assume is open to the NRB. That case 0:09:24.320 --> 0:09:28.160 by case litigation approach is available. The district judge decision, 0:09:28.400 --> 0:09:31.200 and the FDC case deals with the effort in a 0:09:31.240 --> 0:09:35.320 single rule to achieve what otherwise be attained through a 0:09:35.400 --> 0:09:36.959 collection of cases over time. 0:09:37.360 --> 0:09:37.959 How big a. 0:09:37.920 --> 0:09:39.880 Blow do you think this is to the FTC. 0:09:40.559 --> 0:09:42.920 I think it's a significant blow. And when I look 0:09:42.960 --> 0:09:46.360 at the whole span of the FTC's program since the 0:09:46.400 --> 0:09:50.800 Biden administration began in twenty twenty one, I would characterize 0:09:50.840 --> 0:09:54.200 this as the most significant initiative that they pursued. Most 0:09:54.240 --> 0:09:59.320 significant measured by its purported economic impact, it's anticipated economic impact, 0:09:59.400 --> 0:10:03.000 which is self described as being very broad, most significant 0:10:03.040 --> 0:10:06.319 in terms of it's effort to move the doctrinal framework 0:10:06.360 --> 0:10:09.840 of intervention outwards, the game acceptance through the idea that 0:10:09.880 --> 0:10:13.520 the FTC has power to issue these competition rules and 0:10:13.600 --> 0:10:18.160 include powerful prohibitions in them. And Third, symbolically, it is 0:10:18.240 --> 0:10:22.800 held out as an example of the Biden FTC is 0:10:22.880 --> 0:10:25.760 willing to take more risks, to be far more ambitious 0:10:25.760 --> 0:10:28.960 than its predecessors are, and as such to bring a 0:10:29.120 --> 0:10:34.400 new attitude toward the application of federal power to control commerce. 0:10:34.600 --> 0:10:37.240 In all of these respects, I would say, in the 0:10:37.400 --> 0:10:42.319 entire fleet of FDC initiatives, this is the flagship, and 0:10:42.840 --> 0:10:44.840 if you are running a navy, you don't want your 0:10:44.880 --> 0:10:46.040 flagship to be sunk. 0:10:46.320 --> 0:10:50.520 In a statement, FTC spokesperson Victoria Graham said the agency 0:10:50.600 --> 0:10:54.120 is seriously considering a potential appeal. Do you think they 0:10:54.160 --> 0:10:57.040 should appeal this because it's going to the Fifth Circuit, 0:10:57.120 --> 0:11:01.839 which is ultra conservative as a reputation for overturning Biden 0:11:01.880 --> 0:11:05.760 administration rules, and then likely to the Supreme Court, where 0:11:06.000 --> 0:11:07.959 you know, as you mentioned, I don't think they'll find 0:11:08.160 --> 0:11:09.480 a receptive court. 0:11:09.800 --> 0:11:12.280 I think they should. If I was guiding the strategy, 0:11:12.400 --> 0:11:14.920 I would do it. One reason is that the FDC 0:11:15.040 --> 0:11:17.880 has had some surprising success over the past year in 0:11:17.920 --> 0:11:20.199 front of that very court. It was in the context 0:11:20.200 --> 0:11:23.480 of a merger challenge to an acquisition by a Lumina 0:11:23.559 --> 0:11:26.120 of the Grail Company. It was an appeal from an 0:11:26.120 --> 0:11:30.400 FDC administrative decision, a law enforcement measure. The parties opposing 0:11:30.440 --> 0:11:35.479 the FDC roise four distinct constitutional and administrative law challenges 0:11:35.520 --> 0:11:39.280 to the FDC's authority in addition to challenging the FDC's 0:11:39.280 --> 0:11:41.599 decision on the merits. I think that they thought that 0:11:41.640 --> 0:11:44.160 had gone to exactly the forum that would be favorable 0:11:44.200 --> 0:11:46.600 to them. They didn't quite get the panel that they 0:11:46.600 --> 0:11:49.920 hoped for, but the panel they did get basically brushed 0:11:49.920 --> 0:11:54.319 the side all of the administrative law and constitutional law challenges. 0:11:54.800 --> 0:11:58.280 It upheld the FDC's decision, and in a sense, it 0:11:58.400 --> 0:12:03.400 showed that EVE been in a very difficult litigation environment, 0:12:03.520 --> 0:12:06.559 you can prevail, so it's not a hopeless pursuit. And 0:12:06.600 --> 0:12:09.079 another reason I'd bring the case is it I think 0:12:09.080 --> 0:12:12.560 it would demonstrate the conviction of the agency to take 0:12:12.640 --> 0:12:17.439 on hard, difficult matters notwithstanding the possibility of failure in 0:12:17.480 --> 0:12:21.000 the court. You're ultimately going to have to face a judiciary, 0:12:21.200 --> 0:12:25.080 perhaps ultimately the Supreme Court, that has raised issues with 0:12:25.160 --> 0:12:29.439 this form of approach. My suggestion was have it out now, 0:12:29.840 --> 0:12:32.760 get the appellate decision, take it up to the Supreme 0:12:32.800 --> 0:12:37.240 Court and say we need a basic decision about the 0:12:37.280 --> 0:12:42.120 framework of FDC authority generally and about its application of 0:12:42.160 --> 0:12:45.400 its abserdive authority in this instance. Let's not wait for 0:12:45.480 --> 0:12:48.280 another case or another time. Let's bring it to a 0:12:48.360 --> 0:12:50.960 head now, and if the result is adverse, we go 0:12:51.040 --> 0:12:53.320 back to Congress and say, if you want us to 0:12:53.360 --> 0:12:56.040 be active in this area, give us a clearer mandate 0:12:56.120 --> 0:12:58.760 to do, so. 0:12:57.760 --> 0:13:02.880 There are noncompetes. At state level. Four states have banned 0:13:02.920 --> 0:13:05.880 nearly all non competes, and at least eleven more have 0:13:06.480 --> 0:13:11.280 thresholds protecting lower income, middle income, hourly workers, etc. Do 0:13:11.320 --> 0:13:14.280 you think we'll see more states trying to pass laws 0:13:14.360 --> 0:13:15.480 about non competes. 0:13:15.880 --> 0:13:18.240 I think we'll see an amendment of the legal framework. 0:13:18.320 --> 0:13:20.920 And this is a respect in which the FDC's initiative, 0:13:21.280 --> 0:13:24.640 despite the risks that I've been describing in the Sensus, 0:13:24.760 --> 0:13:28.840 achieved real success. It has drawn broad attention within the 0:13:28.960 --> 0:13:32.959 United States. So the issue of non compete it's catalyzed 0:13:33.080 --> 0:13:37.480 reconsideration of the existing legal framework, which, with the exception 0:13:37.559 --> 0:13:40.200 of a handful of states such as California, does not 0:13:40.360 --> 0:13:44.880 prohibit these agreements or render them unenforceable. Most states allow 0:13:44.960 --> 0:13:48.200 them to be evaluated by a reasonableness standard. The FDC's 0:13:48.240 --> 0:13:52.200 initiative has inspired a new debate about whether or not 0:13:52.280 --> 0:13:55.520 these kinds of restrictions are appropriate. So I think we're 0:13:55.559 --> 0:13:58.800 going to see a rethink in many states that allow 0:13:58.920 --> 0:14:03.040 these arrangements or a reasonableness standard, to rethink that approach, 0:14:03.440 --> 0:14:07.560 perhaps to create presumptions against them, to apply prohibitions that 0:14:07.679 --> 0:14:11.880 exist now on certain noncompete more broadly, so we could 0:14:11.880 --> 0:14:17.360 see in the States a restoration of bolder enforcement and 0:14:17.440 --> 0:14:22.160 scrutiny regarding noncompete, notwithstanding the result that comes from the 0:14:22.200 --> 0:14:25.800 federal litigation itself. And I think you point to a 0:14:25.920 --> 0:14:29.600 result that the FDC probably had in mind in taking 0:14:29.600 --> 0:14:32.360 a very bold approach here, which was to change the 0:14:32.400 --> 0:14:36.160 policy debate to bring about indirect effects, including in the 0:14:36.160 --> 0:14:39.560 state government. And I suspect if we were to give 0:14:39.640 --> 0:14:43.080 truth theorem to the leadership team at the FTC, the 0:14:43.120 --> 0:14:45.760 FDC might stay. That is an important measure of success 0:14:45.800 --> 0:14:50.080 by itself, and that made the entire effort worthwhile, even 0:14:50.120 --> 0:14:53.080 if our own specific initiative is not successful. 0:14:53.560 --> 0:14:57.480 I've been reading and you know some articles say management 0:14:57.600 --> 0:15:00.520 is back in control. Now you know, this is a 0:15:00.640 --> 0:15:02.120 huge win from management. 0:15:02.160 --> 0:15:03.440 Do you agree with that. 0:15:03.880 --> 0:15:06.000 I'm afraid that's a bit like saying that the match 0:15:06.080 --> 0:15:08.640 is over when there are still many minutes left on 0:15:08.720 --> 0:15:13.680 the clock. So there's a temporary reprieve, but there are still, 0:15:14.040 --> 0:15:17.640 as Jimmy Cliff would say, many rivers to cross before 0:15:17.680 --> 0:15:20.720 you get confidence that the status quo which allows many 0:15:20.760 --> 0:15:23.400 of these arrangements stays in place. So it's way too 0:15:23.480 --> 0:15:27.680 early to speak so confidently about things, especially because of 0:15:27.720 --> 0:15:31.400 the point that we just mentioned. There are some limitations 0:15:31.440 --> 0:15:34.040 on these agreements at the state level, and I think 0:15:34.080 --> 0:15:37.760 the FTC initiative, even if it fails in the court, 0:15:38.360 --> 0:15:42.200 it's set in motion a policy rethink that's going to 0:15:42.240 --> 0:15:45.600 spill over through a number of jurisdictions. So I wouldn't 0:15:45.640 --> 0:15:49.800 be comfortable in simply sitting back and the storm has passed, 0:15:50.000 --> 0:15:53.160 the status quo prevails. I think that is not a 0:15:53.520 --> 0:15:56.720 completely thoughtful understanding of what's taking place now. 0:15:57.040 --> 0:15:59.360 As you say, a lot more to come. Thanks so much, Bill, 0:15:59.400 --> 0:16:03.160 I really appreciate your insights. That's Professor William Kavasik of 0:16:03.280 --> 0:16:07.720 GW Law School. A divided Supreme Court refused to bolster 0:16:07.800 --> 0:16:12.720 the Biden administration's ability to extend protections against discrimination in 0:16:12.800 --> 0:16:17.760 schools to transgender students nationwide in an unsigned order. The 0:16:18.000 --> 0:16:21.120 Justice has left enforced two lower court orders that are 0:16:21.200 --> 0:16:25.840 temporarily blocking a new Education Department rule in ten states. 0:16:26.320 --> 0:16:30.560 Joining me is Chase Stradio, Deputy director for Transgender Justice 0:16:30.600 --> 0:16:34.360 at the American Civil Liberties Union, tell us first about 0:16:34.400 --> 0:16:37.360 the Education Department rule that's at issue here. 0:16:38.280 --> 0:16:44.960 The federal law that prohibits tex discrimination in educational programs 0:16:44.960 --> 0:16:50.040 that receive federal funding, and Title nine has regulations that 0:16:50.120 --> 0:16:53.920 the Department of Education has promulgated over the years, and 0:16:53.960 --> 0:16:56.840 the Biden administration, over the course of the last several years, 0:16:56.840 --> 0:17:01.480 has been working on an extensive rule implementing provisions of 0:17:01.840 --> 0:17:05.280 Title nine that were subject to notice in common and 0:17:05.800 --> 0:17:09.119 we're set to go into effect on August first, and 0:17:09.480 --> 0:17:13.560 we're talking about fifteen hundred pages that cover a lot 0:17:13.560 --> 0:17:17.359 of different areas of issues related to sex discrimination. The 0:17:17.520 --> 0:17:19.679 subject that has received the most attention that's been the 0:17:19.720 --> 0:17:25.240 centerpiece of litigation over these regulations concerns transgender students and 0:17:25.520 --> 0:17:29.399 protections for transgender students and educational settings. First at the 0:17:29.520 --> 0:17:32.400 sort of definitional threshold level, whether or not Title nine 0:17:32.440 --> 0:17:37.639 itself includes discrimination against people who are LGBTQ. And then specifically, 0:17:37.880 --> 0:17:40.199 there are sort of two central provisions that have been 0:17:40.200 --> 0:17:46.040 the subject of litigation. One concerns the inclusion of transgender 0:17:46.080 --> 0:17:51.040 students in sex segregated spaces in most specifically restrooms, and 0:17:51.080 --> 0:17:56.000 then the other concerns the interpretation of basically what is 0:17:56.040 --> 0:18:00.320 a hostile environment harassment under titlemind and in particular, the 0:18:00.400 --> 0:18:03.280 context has been the subject of most of this conversation 0:18:03.359 --> 0:18:06.239 has to do with pronouns for trench under students. So 0:18:06.720 --> 0:18:09.960 those are two, you know, very discrete areas that have 0:18:10.040 --> 0:18:13.400 been the subject of litigation in a rule that covers, 0:18:13.480 --> 0:18:18.600 you know, extensive areas of federal educational programming, including protections 0:18:18.600 --> 0:18:23.760 for pregnant and receiving students, and other areas of interpretation 0:18:23.880 --> 0:18:27.040 under Title nine. So that is the overall context that 0:18:27.200 --> 0:18:30.359 we're dealing with when we're talking about the recents that 0:18:30.640 --> 0:18:33.359 of cases that ultimately made their way up to the 0:18:33.400 --> 0:18:34.679 Supreme Court shadow docket. 0:18:35.000 --> 0:18:40.480 Federal trial judges in Kentucky and Louisiana issued orders temporary 0:18:40.600 --> 0:18:42.280 blocking the rule in tense states. 0:18:42.280 --> 0:18:43.920 So did they block the entire rule? 0:18:44.359 --> 0:18:48.000 Yes, So there has been a number of different cases 0:18:48.040 --> 0:18:51.439 proceeding through the federal courts and the appeal of courts 0:18:51.480 --> 0:18:54.600 and the district courts. Coming out of three cases, one 0:18:54.640 --> 0:19:00.000 in Kentucky and two consolidated in Louisiana enjoined the entire 0:19:00.040 --> 0:19:04.600 higher Rule, not just the provisions related to the sex 0:19:04.640 --> 0:19:09.160 separated spaces and the hostile environment harassment language that were 0:19:09.200 --> 0:19:13.200 the actual subject of the litigation that was brought by 0:19:13.240 --> 0:19:16.200 the various states and in some instances localities. 0:19:16.720 --> 0:19:19.880 Was the reasoning of the two courts the same or similar? 0:19:20.000 --> 0:19:22.800 Why did they issue this temporary injunction? 0:19:23.200 --> 0:19:25.479 I think there's sort of two sets of questions about, 0:19:25.720 --> 0:19:28.280 you know, why did they issue the induction? The first 0:19:28.320 --> 0:19:31.560 is sort of on the merits. The argument as to 0:19:31.800 --> 0:19:35.480 the provisions that the litigations focused on were that the 0:19:35.520 --> 0:19:40.199 interpretation of the rules exceeded that the administration statutory authority 0:19:40.600 --> 0:19:44.359 under Title nine, and that was the main substantive merits argument. 0:19:44.440 --> 0:19:50.159 In essence, the protections that the statute affords from discrimination 0:19:50.280 --> 0:19:54.479 based on sets did not include discrimination against transgender people, 0:19:54.800 --> 0:19:58.480 and in particular not in these discrete ways. So those 0:19:58.480 --> 0:20:01.360 were the merits questions, and courts held that they were 0:20:01.480 --> 0:20:05.159 likely to succeed that the administration exceeded its authority in 0:20:05.200 --> 0:20:09.119 promulgating these rules. Now, as to why the injunctions threat 0:20:09.280 --> 0:20:13.320 so broadly, the argument there, I know it wasn't even 0:20:13.359 --> 0:20:17.720 really advanced by the states themselves in litigating these claims, 0:20:17.800 --> 0:20:21.280 was that the rest of the rule could not be 0:20:21.320 --> 0:20:25.600 severed from the injury that they complained of with respect 0:20:25.640 --> 0:20:29.720 to the provisions related to transtudents. That is the argument, 0:20:29.800 --> 0:20:33.199 and that is the basis for the sweeping injunctions that 0:20:33.280 --> 0:20:37.120 reach across all of the areas in which this Title 0:20:37.200 --> 0:20:41.280 nine regulation covered, and like I said, including related to 0:20:41.920 --> 0:20:46.119 general protections from discrimination for pregnant and breastleading students. And 0:20:46.160 --> 0:20:47.800 so the vision from the court was that what they 0:20:47.800 --> 0:20:50.720 couldn't sever the various provisions, and. 0:20:50.720 --> 0:20:54.600 The Solicitor General had only asked the Court to allow 0:20:54.640 --> 0:20:58.879 the other provisions to be enforced while the legal fight 0:20:59.280 --> 0:20:59.679 goes on. 0:21:00.240 --> 0:21:01.119 Yes, that's correct. 0:21:01.160 --> 0:21:05.199 So there had been a motion for partial stay that 0:21:05.280 --> 0:21:09.160 had been filed in the appeals courts in the sixth 0:21:09.280 --> 0:21:13.120 and fifth Circuits, and the motion for the partial stay 0:21:13.560 --> 0:21:18.560 was only seeking to stay the injunction with respect to 0:21:19.280 --> 0:21:25.280 the provisions that did not concern the single sex facilities 0:21:25.320 --> 0:21:28.760 in the hostile environment harassment, So in essence saying their 0:21:28.840 --> 0:21:32.720 complaining of injuries with respect to these two discreete things, 0:21:33.119 --> 0:21:36.600 we're not seeking to block the injunction with respect to those, 0:21:36.960 --> 0:21:40.560 but it sleeps too broadly, and we are seeking relief 0:21:40.880 --> 0:21:47.399 from this incredibly broad injunction that prevents us from implement 0:21:47.600 --> 0:21:51.560 mening this critical rule protecting students and staff from sex 0:21:51.560 --> 0:21:55.119 discrimination and education. So that was the stay they thought 0:21:55.119 --> 0:21:58.639 from the lower federal appeals courts. Those were denied at 0:21:58.680 --> 0:22:01.520 the appeals level, and then ultimately they went to the 0:22:01.560 --> 0:22:07.520 Supreme Court seeking the same stay with respect to the 0:22:07.560 --> 0:22:10.959 rest of the rule and not challenging the stay with 0:22:11.000 --> 0:22:14.080 respect to the to the two provisions that I was mentioning, 0:22:14.080 --> 0:22:18.600 the hostile environment and the single sex facilities. Now there 0:22:18.640 --> 0:22:21.200 is some complicated piece to all this, which is that 0:22:21.400 --> 0:22:23.800 it is in part complicated because of how the Supreme 0:22:23.800 --> 0:22:27.600 Court ultimately does it. But there's a definitional provision at 0:22:27.640 --> 0:22:30.720 the center of all this as well, and the SU's 0:22:30.800 --> 0:22:34.840 office also thought a stay of the injunction with respect 0:22:34.880 --> 0:22:38.159 to the definitional provision, and that definitional provision, you know, 0:22:38.440 --> 0:22:42.119 in essence, the piece of the rule that defines what 0:22:42.359 --> 0:22:46.280 is sex discrimination for purposes of Title nine and explains 0:22:46.320 --> 0:22:52.280 that sex includes cender identity, sex, stereotyping, pregnancy status, and 0:22:52.320 --> 0:22:56.600 this broad understanding of what it means to discriminate because 0:22:56.640 --> 0:22:59.720 of sex Undercidle nine. So this definitional provision was also 0:22:59.760 --> 0:23:03.560 at the center of the litigation. Even though the states 0:23:03.600 --> 0:23:06.040 that brought the initial lawsuit never complained that they were 0:23:06.080 --> 0:23:09.040 injured by the definitional provision, and if you think about 0:23:09.080 --> 0:23:13.199 what that means in essence, the idea here would be well, 0:23:13.480 --> 0:23:17.719 certainly after Boss Stock, which held that under Title seven, 0:23:18.000 --> 0:23:22.560 sex discrimination includes a prohibsion on discrimination against LGBT people 0:23:23.160 --> 0:23:27.800 in educational settings, a school couldn't say deny someone the 0:23:27.880 --> 0:23:31.640 ability to be a graduation speaker simply because they're transgender. 0:23:31.800 --> 0:23:37.600 There's general educational protections against discrimination for the community, and 0:23:38.000 --> 0:23:42.040 that is distinct from the injuries being complained of with 0:23:42.119 --> 0:23:45.640 respect to you know, in particular bathrooms and pronouns. And 0:23:45.760 --> 0:23:47.680 so they did speak a stay with respect of the 0:23:47.720 --> 0:23:52.119 definitional provision, but again that was denied at the Intermediate 0:23:52.200 --> 0:23:55.800 appeals Court and then at the Supreme Court they thought 0:23:55.920 --> 0:23:59.640 the partial stay of the sweeping injunction with the exception 0:23:59.760 --> 0:24:02.159 of the two provisions that they did not seek of. 0:24:02.200 --> 0:24:05.600 Stay coming up next. So what split the court five 0:24:05.680 --> 0:24:08.960 to four? This is Bloomberg. So it was five to 0:24:09.000 --> 0:24:12.200 four decision, but all nine members of the court agreed 0:24:12.280 --> 0:24:16.000 that the parts of the rules that include the protections 0:24:16.040 --> 0:24:19.880 for transgender students, you know, the definition of sex discrimination 0:24:20.000 --> 0:24:24.840 including gender identity, and the restrictions on same sex spaces 0:24:25.160 --> 0:24:28.520 shouldn't go into effect until the legal challenges are resolved. 0:24:28.880 --> 0:24:31.240 But tell us why the majority the five in a 0:24:31.359 --> 0:24:34.800