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Ban on Noncompetes Tossed & Transgender Student Protections · Bloomberg Law

0:03
Speaker 1: This is Bloomberg Law, with June Brusso from Bloomberg Radio.
0:10
Speaker 2: A Texas judge struck down the FTC's ban on non
0:14
Speaker 2: compete agreements before the ban even went into effect, blocking
0:18
Speaker 2: the agency's effort to make labor markets more competitive. Non
0:23
Speaker 2: Compete agreements have become increasingly common, with an estimated twenty
0:28
Speaker 2: percent of workers that's about thirty million Americans subject to them.
0:33
Speaker 2: Last January, President Joe Biden touted the FTC's overhaul of
0:37
Speaker 2: the rules, saying non compete clauses are overused and often
0:42
Speaker 2: make it unnecessarily difficult for average working Americans to get
0:47
Speaker 2: better jobs.
0:48
Speaker 3: That's another thing to say you're working for a subway
0:53
Speaker 3: and you can't walk across the street and go to
0:56
Speaker 3: Jimmy Johns and get a twenty cent raise. What tells
0:59
Speaker 3: that all about others and keeping wages down?
1:02
Speaker 2: But Texas Judge Ada Brown, a Trump appointee, said the
1:06
Speaker 2: FTC lacked the authority to enact the non compete ban
1:10
Speaker 2: and tossed it out. Joining me is William Kavasik, a
1:13
Speaker 2: professor at GW Law School and the former chair of
1:16
Speaker 2: the FTC.
1:18
Speaker 4: The judge said.
1:19
Speaker 2: In her twenty seven page ruling that the FTC's proposed
1:23
Speaker 2: rule was arbitrary and capricious and would cause irreparable harm.
1:27
Speaker 4: Can you tell us more about her decision?
1:31
Speaker 1: Judge Brown had two grounds for suspending the implementation of
1:35
Speaker 1: the rule vacating it. The first is the one you mentioned,
1:38
Speaker 1: which is that the FDC lacked an adequate basis to
1:42
Speaker 1: support the scope and the complete reach of the rule.
1:46
Speaker 1: That is, the rule applies to a very broad range
1:49
Speaker 1: of employment contracts. There are a couple of carbouts, but
1:52
Speaker 1: the judge concluded that you lacked a sufficient evidentiary basis
1:57
Speaker 1: to implement that rule, and therefore the rule itself as
2:00
Speaker 1: arbitrary and caprecious. The second basis for rejecting the rule
2:04
Speaker 1: is her conclusion that the FDC lacks the legal authority
2:08
Speaker 1: to adopt rules involving competition policy. That is, substantive competition
2:13
Speaker 1: rules are beyond the FDC's remit. This involved a fairly
2:17
Speaker 1: elaborate and technical analysis the FDC's authority going back to
2:21
Speaker 1: nineteen fourteen when Congress established the FDC Act and coming forward,
2:25
Speaker 1: but her review of the original framework and its subsequent
2:29
Speaker 1: evolution to the FTC simply lacks legal authority to adopt
2:34
Speaker 1: and apply such a rule, so that on that basis
2:36
Speaker 1: as well, the rule was suspended.
2:39
Speaker 4: Do you agree with her reasoning.
2:41
Speaker 1: On the second point. I do. It's always difficult to
2:44
Speaker 1: decide when you have a good fit between the substantive
2:48
Speaker 1: rule and the underlying basis. I think what's a matter
2:50
Speaker 1: of concern is that, first, it's an extraordinarily broad rule
2:54
Speaker 1: and unashamably it applies to the laws that have forty
2:58
Speaker 1: eight states that currently allowed various forms of noncompete. It involves,
3:02
Speaker 1: as the FTC emphasized, hundreds of billions of dollars of wages.
3:06
Speaker 1: There are tremendous economic stakes here. This is very clearly
3:09
Speaker 1: a major extension of the FDC's oversight role in labor
3:15
Speaker 1: related agreements. You would think that for a measure of
3:17
Speaker 1: that art you would have to have a fairly extensive
3:20
Speaker 1: and careful review of the existing literature pro and con.
3:23
Speaker 1: I would say, in many ways, the SEC took shortcuts
3:26
Speaker 1: on that and tended to brush aside views that it
3:29
Speaker 1: found to be incompatible with its policy preferences. And I
3:32
Speaker 1: think that did create a real vulnerability with respect to
3:35
Speaker 1: the arbitrary and capricious issue you argue about the FDC's
3:38
Speaker 1: authority is ambiguous. There are certainly plausible arguments that the
3:42
Speaker 1: FDC has the authority. My intuition is that given the
3:46
Speaker 1: current direction of Supreme Court jurisprudence involving the grant of
3:51
Speaker 1: authority to administrative agencies and the effort that administrative agencies
3:55
Speaker 1: regulators to interpret their authority in a way to meet
3:59
Speaker 1: new conditions and to stretch in some sense the application
4:02
Speaker 1: of their authority, the current Supreme Court is skeptical about that.
4:06
Speaker 1: The current Supreme Court says, if you want to do
4:08
Speaker 1: bold thing and to apply the law in a broad way,
4:11
Speaker 1: we want you to anchor that in a clear statement
4:14
Speaker 1: of congressional purpose. That Congress to allow you to do
4:18
Speaker 1: bold things has to say so. Clearly, the direction of
4:21
Speaker 1: travel of this doctrine runs against the philosophy the interpretation
4:26
Speaker 1: approach that the FDC is relying on. Here. Goodness knows
4:30
Speaker 1: how the Supreme Court would ultimately evaluate the rule. I
4:34
Speaker 1: haven't talked to them today, so I don't know exactly
4:37
Speaker 1: what they'll do. But my inference from the current direction
4:40
Speaker 1: of their jurisprudence and the attitude that's embedded in that
4:44
Speaker 1: jurisprudence is that this rule would have a very difficult
4:47
Speaker 1: time surviving review as it goes up to the court,
4:50
Speaker 1: and that Judge Brown's ruling here is quite likely to
4:53
Speaker 1: be sustained.
4:54
Speaker 2: If the rule had been narrower, let's say it just
4:57
Speaker 2: applied to low and middle income workers, I think that
5:00
Speaker 2: it would have passed.
5:01
Speaker 1: Mustard, I think June if it had been limited in
5:04
Speaker 1: that way. If it had been limited to say, low
5:07
Speaker 1: income workers who were engaged in applying skills that arguably
5:11
Speaker 1: don't involve the special training and conveying of know how
5:14
Speaker 1: that might take place in other settings. If it had
5:17
Speaker 1: been tailored to that specific concern, I think the rule
5:22
Speaker 1: would have had a better chance of sidestepping the arbitrarrian
5:25
Speaker 1: capricious ruling that Judge Brown found here. It would still
5:30
Speaker 1: perhaps run into the concern about whether the FDC has
5:33
Speaker 1: the authority in the first place. That is, Judge Brown's
5:36
Speaker 1: conclusion that the FDC lacks authority would mean that even
5:39
Speaker 1: a narrower rule would not be permissible unless Congress would
5:43
Speaker 1: have come back and clearly give the authority to do it.
5:46
Speaker 1: But I think a narrower rule would have had a
5:48
Speaker 1: stronger chance of surviving review in two respects. One is
5:52
Speaker 1: that it would be less likely to be found arbitrary
5:54
Speaker 1: and capricious, and the other is that there's another issue
5:57
Speaker 1: looking in the background, where the Supreme Court recently has said,
6:00
Speaker 1: if you purport to do path breaking economically significant things
6:06
Speaker 1: by rule making, you have to point to specific grant
6:09
Speaker 1: of legislative authority to do that. In other words, as
6:12
Speaker 1: the Court is said, where your initiative raises major questions
6:17
Speaker 1: about the operation of the economy, for example, you have
6:20
Speaker 1: to be able to show more precisely that Congress intended
6:24
Speaker 1: for you to address those major questions and to adopt
6:27
Speaker 1: rules to treat them. That is the basis on which
6:31
Speaker 1: yet another court in Florida, Federal Court in Florida issued
6:35
Speaker 1: a preliminary injunction concerning the application of the rule. So
6:38
Speaker 1: when we take all of these, I would say, skeptical
6:42
Speaker 1: streams of jurisprudence, the FTC is traveling into a very
6:47
Speaker 1: difficult storm, and that a narrower rule would have helped
6:51
Speaker 1: avoid the arbitrary and capricious ruling. A narrower rule would
6:55
Speaker 1: be less likely to raise concerns under the major question doctrine,
7:00
Speaker 1: but even a narrower rule would run into the concern
7:03
Speaker 1: that Judge Brown showed that the Commission just doesn't have
7:06
Speaker 1: authority to issue any rules involving competition.
7:10
Speaker 2: How about another agency doing this? The National Labor Relations
7:14
Speaker 2: Board's top lawyer is moving ahead with an enforcement strategy
7:18
Speaker 2: to make restrictive covenants illegal. General Counsel Jennifer Brusso says
7:24
Speaker 2: such packs deny workers the ability to quit or change jobs,
7:28
Speaker 2: which in turn interferes with exercising their organizing rights in
7:32
Speaker 2: their current positions for fear of being fired and not
7:36
Speaker 2: being able to obtain new employment. Do you think of
7:39
Speaker 2: rule by the NLRB would survive.
7:41
Speaker 1: I'm less familiar tune with the specific grant of authority
7:45
Speaker 1: that the NLRB would be relying upon, certainly in the
7:48
Speaker 1: application of its adjudication function, that is, in the prosecution
7:52
Speaker 1: of individual cases, it would be less likely to run
7:55
Speaker 1: into the question whether it has rule making authority, which
7:58
Speaker 1: is the issue in the FTC proceeding. The question for
8:01
Speaker 1: the NLRB would be in its law enforcement capacity. Has
8:06
Speaker 1: it appropriately interpreted the mandate the Congress gave it, and
8:10
Speaker 1: would reviewing courts conclude that its interpretation of its The
8:14
Speaker 1: law enforcement mission encompasses the concerns that the NLRB Solicitor
8:20
Speaker 1: General has raised about noncompete. So the NLRB might be
8:24
Speaker 1: in a position to challenge these I don't know if
8:27
Speaker 1: they mean to do it by rulemaking. And I would
8:29
Speaker 1: add that the FDC does have authority to challenge individual
8:34
Speaker 1: non compete agreements using its law enforcement mandate. It has
8:38
Speaker 1: a law enforcement mandate to prohibit unfair deceptive acts or
8:42
Speaker 1: practices or unfair methods of competition that involves case by
8:46
Speaker 1: case adjudication to challenge specific arrangements. That authority is not
8:51
Speaker 1: endangered in the challenges that are present in the federal
8:54
Speaker 1: courts now, the FDC can continue to do that. That
8:58
Speaker 1: has the disadvantage that you go step by step and
9:01
Speaker 1: you don't have the capacity necessarily to adopt a broad
9:05
Speaker 1: based prohibition that applies across the country and condemns all
9:10
Speaker 1: of the arrangements. It's a more laborious way to get
9:14
Speaker 1: to the final destination that you wish to achieve. That
9:17
Speaker 1: task is still open to the FDC. That kind of
9:20
Speaker 1: litigation I assume is open to the NRB. That case
9:24
Speaker 1: by case litigation approach is available. The district judge decision,
9:28
Speaker 1: and the FDC case deals with the effort in a
9:31
Speaker 1: single rule to achieve what otherwise be attained through a
9:35
Speaker 1: collection of cases over time.
9:37
Speaker 4: How big a.
9:37
Speaker 2: Blow do you think this is to the FTC.
9:40
Speaker 1: I think it's a significant blow. And when I look
9:42
Speaker 1: at the whole span of the FTC's program since the
9:46
Speaker 1: Biden administration began in twenty twenty one, I would characterize
9:50
Speaker 1: this as the most significant initiative that they pursued. Most
9:54
Speaker 1: significant measured by its purported economic impact, it's anticipated economic impact,
9:59
Speaker 1: which is self described as being very broad, most significant
10:03
Speaker 1: in terms of it's effort to move the doctrinal framework
10:06
Speaker 1: of intervention outwards, the game acceptance through the idea that
10:09
Speaker 1: the FTC has power to issue these competition rules and
10:13
Speaker 1: include powerful prohibitions in them. And Third, symbolically, it is
10:18
Speaker 1: held out as an example of the Biden FTC is
10:22
Speaker 1: willing to take more risks, to be far more ambitious
10:25
Speaker 1: than its predecessors are, and as such to bring a
10:29
Speaker 1: new attitude toward the application of federal power to control commerce.
10:34
Speaker 1: In all of these respects, I would say, in the
10:37
Speaker 1: entire fleet of FDC initiatives, this is the flagship, and
10:42
Speaker 1: if you are running a navy, you don't want your
10:44
Speaker 1: flagship to be sunk.
10:46
Speaker 2: In a statement, FTC spokesperson Victoria Graham said the agency
10:50
Speaker 2: is seriously considering a potential appeal. Do you think they
10:54
Speaker 2: should appeal this because it's going to the Fifth Circuit,
10:57
Speaker 2: which is ultra conservative as a reputation for overturning Biden
11:01
Speaker 2: administration rules, and then likely to the Supreme Court, where
11:06
Speaker 2: you know, as you mentioned, I don't think they'll find
11:08
Speaker 2: a receptive court.
11:09
Speaker 1: I think they should. If I was guiding the strategy,
11:12
Speaker 1: I would do it. One reason is that the FDC
11:15
Speaker 1: has had some surprising success over the past year in
11:17
Speaker 1: front of that very court. It was in the context
11:20
Speaker 1: of a merger challenge to an acquisition by a Lumina
11:23
Speaker 1: of the Grail Company. It was an appeal from an
11:26
Speaker 1: FDC administrative decision, a law enforcement measure. The parties opposing
11:30
Speaker 1: the FDC roise four distinct constitutional and administrative law challenges
11:35
Speaker 1: to the FDC's authority in addition to challenging the FDC's
11:39
Speaker 1: decision on the merits. I think that they thought that
11:41
Speaker 1: had gone to exactly the forum that would be favorable
11:44
Speaker 1: to them. They didn't quite get the panel that they
11:46
Speaker 1: hoped for, but the panel they did get basically brushed
11:49
Speaker 1: the side all of the administrative law and constitutional law challenges.
11:54
Speaker 1: It upheld the FDC's decision, and in a sense, it
11:58
Speaker 1: showed that EVE been in a very difficult litigation environment,
12:03
Speaker 1: you can prevail, so it's not a hopeless pursuit. And
12:06
Speaker 1: another reason I'd bring the case is it I think
12:09
Speaker 1: it would demonstrate the conviction of the agency to take
12:12
Speaker 1: on hard, difficult matters notwithstanding the possibility of failure in
12:17
Speaker 1: the court. You're ultimately going to have to face a judiciary,
12:21
Speaker 1: perhaps ultimately the Supreme Court, that has raised issues with
12:25
Speaker 1: this form of approach. My suggestion was have it out now,
12:29
Speaker 1: get the appellate decision, take it up to the Supreme
12:32
Speaker 1: Court and say we need a basic decision about the
12:37
Speaker 1: framework of FDC authority generally and about its application of
12:42
Speaker 1: its abserdive authority in this instance. Let's not wait for
12:45
Speaker 1: another case or another time. Let's bring it to a
12:48
Speaker 1: head now, and if the result is adverse, we go
12:51
Speaker 1: back to Congress and say, if you want us to
12:53
Speaker 1: be active in this area, give us a clearer mandate
12:56
Speaker 1: to do, so.
12:57
Speaker 2: There are noncompetes. At state level. Four states have banned
13:02
Speaker 2: nearly all non competes, and at least eleven more have
13:06
Speaker 2: thresholds protecting lower income, middle income, hourly workers, etc. Do
13:11
Speaker 2: you think we'll see more states trying to pass laws
13:14
Speaker 2: about non competes.
13:15
Speaker 1: I think we'll see an amendment of the legal framework.
13:18
Speaker 1: And this is a respect in which the FDC's initiative,
13:21
Speaker 1: despite the risks that I've been describing in the Sensus,
13:24
Speaker 1: achieved real success. It has drawn broad attention within the
13:28
Speaker 1: United States. So the issue of non compete it's catalyzed
13:33
Speaker 1: reconsideration of the existing legal framework, which, with the exception
13:37
Speaker 1: of a handful of states such as California, does not
13:40
Speaker 1: prohibit these agreements or render them unenforceable. Most states allow
13:44
Speaker 1: them to be evaluated by a reasonableness standard. The FDC's
13:48
Speaker 1: initiative has inspired a new debate about whether or not
13:52
Speaker 1: these kinds of restrictions are appropriate. So I think we're
13:55
Speaker 1: going to see a rethink in many states that allow
13:58
Speaker 1: these arrangements or a reasonableness standard, to rethink that approach,
14:03
Speaker 1: perhaps to create presumptions against them, to apply prohibitions that
14:07
Speaker 1: exist now on certain noncompete more broadly, so we could
14:11
Speaker 1: see in the States a restoration of bolder enforcement and
14:17
Speaker 1: scrutiny regarding noncompete, notwithstanding the result that comes from the
14:22
Speaker 1: federal litigation itself. And I think you point to a
14:25
Speaker 1: result that the FDC probably had in mind in taking
14:29
Speaker 1: a very bold approach here, which was to change the
14:32
Speaker 1: policy debate to bring about indirect effects, including in the
14:36
Speaker 1: state government. And I suspect if we were to give
14:39
Speaker 1: truth theorem to the leadership team at the FTC, the
14:43
Speaker 1: FDC might stay. That is an important measure of success
14:45
Speaker 1: by itself, and that made the entire effort worthwhile, even
14:50
Speaker 1: if our own specific initiative is not successful.
14:53
Speaker 2: I've been reading and you know some articles say management
14:57
Speaker 2: is back in control. Now you know, this is a
15:00
Speaker 2: huge win from management.
15:02
Speaker 4: Do you agree with that.
15:03
Speaker 1: I'm afraid that's a bit like saying that the match
15:06
Speaker 1: is over when there are still many minutes left on
15:08
Speaker 1: the clock. So there's a temporary reprieve, but there are still,
15:14
Speaker 1: as Jimmy Cliff would say, many rivers to cross before
15:17
Speaker 1: you get confidence that the status quo which allows many
15:20
Speaker 1: of these arrangements stays in place. So it's way too
15:23
Speaker 1: early to speak so confidently about things, especially because of
15:27
Speaker 1: the point that we just mentioned. There are some limitations
15:31
Speaker 1: on these agreements at the state level, and I think
15:34
Speaker 1: the FTC initiative, even if it fails in the court,
15:38
Speaker 1: it's set in motion a policy rethink that's going to
15:42
Speaker 1: spill over through a number of jurisdictions. So I wouldn't
15:45
Speaker 1: be comfortable in simply sitting back and the storm has passed,
15:50
Speaker 1: the status quo prevails. I think that is not a
15:53
Speaker 1: completely thoughtful understanding of what's taking place now.
15:57
Speaker 2: As you say, a lot more to come. Thanks so much, Bill,
15:59
Speaker 2: I really appreciate your insights. That's Professor William Kavasik of
16:03
Speaker 2: GW Law School. A divided Supreme Court refused to bolster
16:07
Speaker 2: the Biden administration's ability to extend protections against discrimination in
16:12
Speaker 2: schools to transgender students nationwide in an unsigned order. The
16:18
Speaker 2: Justice has left enforced two lower court orders that are
16:21
Speaker 2: temporarily blocking a new Education Department rule in ten states.
16:26
Speaker 2: Joining me is Chase Stradio, Deputy director for Transgender Justice
16:30
Speaker 2: at the American Civil Liberties Union, tell us first about
16:34
Speaker 2: the Education Department rule that's at issue here.
16:38
Speaker 5: The federal law that prohibits tex discrimination in educational programs
16:44
Speaker 5: that receive federal funding, and Title nine has regulations that
16:50
Speaker 5: the Department of Education has promulgated over the years, and
16:53
Speaker 5: the Biden administration, over the course of the last several years,
16:56
Speaker 5: has been working on an extensive rule implementing provisions of
17:01
Speaker 5: Title nine that were subject to notice in common and
17:05
Speaker 5: we're set to go into effect on August first, and
17:09
Speaker 5: we're talking about fifteen hundred pages that cover a lot
17:13
Speaker 5: of different areas of issues related to sex discrimination. The
17:17
Speaker 5: subject that has received the most attention that's been the
17:19
Speaker 5: centerpiece of litigation over these regulations concerns transgender students and
17:25
Speaker 5: protections for transgender students and educational settings. First at the
17:29
Speaker 5: sort of definitional threshold level, whether or not Title nine
17:32
Speaker 5: itself includes discrimination against people who are LGBTQ. And then specifically,
17:37
Speaker 5: there are sort of two central provisions that have been
17:40
Speaker 5: the subject of litigation. One concerns the inclusion of transgender
17:46
Speaker 5: students in sex segregated spaces in most specifically restrooms, and
17:51
Speaker 5: then the other concerns the interpretation of basically what is
17:56
Speaker 5: a hostile environment harassment under titlemind and in particular, the
18:00
Speaker 5: context has been the subject of most of this conversation
18:03
Speaker 5: has to do with pronouns for trench under students. So
18:06
Speaker 5: those are two, you know, very discrete areas that have
18:10
Speaker 5: been the subject of litigation in a rule that covers,
18:13
Speaker 5: you know, extensive areas of federal educational programming, including protections
18:18
Speaker 5: for pregnant and receiving students, and other areas of interpretation
18:23
Speaker 5: under Title nine. So that is the overall context that
18:27
Speaker 5: we're dealing with when we're talking about the recents that
18:30
Speaker 5: of cases that ultimately made their way up to the
18:33
Speaker 5: Supreme Court shadow docket.
18:35
Speaker 2: Federal trial judges in Kentucky and Louisiana issued orders temporary
18:40
Speaker 2: blocking the rule in tense states.
18:42
Speaker 4: So did they block the entire rule?
18:44
Speaker 5: Yes, So there has been a number of different cases
18:48
Speaker 5: proceeding through the federal courts and the appeal of courts
18:51
Speaker 5: and the district courts. Coming out of three cases, one
18:54
Speaker 5: in Kentucky and two consolidated in Louisiana enjoined the entire
19:00
Speaker 5: higher Rule, not just the provisions related to the sex
19:04
Speaker 5: separated spaces and the hostile environment harassment language that were
19:09
Speaker 5: the actual subject of the litigation that was brought by
19:13
Speaker 5: the various states and in some instances localities.
19:16
Speaker 2: Was the reasoning of the two courts the same or similar?
19:20
Speaker 2: Why did they issue this temporary injunction?
19:23
Speaker 5: I think there's sort of two sets of questions about,
19:25
Speaker 5: you know, why did they issue the induction? The first
19:28
Speaker 5: is sort of on the merits. The argument as to
19:31
Speaker 5: the provisions that the litigations focused on were that the
19:35
Speaker 5: interpretation of the rules exceeded that the administration statutory authority
19:40
Speaker 5: under Title nine, and that was the main substantive merits argument.
19:44
Speaker 5: In essence, the protections that the statute affords from discrimination
19:50
Speaker 5: based on sets did not include discrimination against transgender people,
19:54
Speaker 5: and in particular not in these discrete ways. So those
19:58
Speaker 5: were the merits questions, and courts held that they were
20:01
Speaker 5: likely to succeed that the administration exceeded its authority in
20:05
Speaker 5: promulgating these rules. Now, as to why the injunctions threat
20:09
Speaker 5: so broadly, the argument there, I know it wasn't even
20:13
Speaker 5: really advanced by the states themselves in litigating these claims,
20:17
Speaker 5: was that the rest of the rule could not be
20:21
Speaker 5: severed from the injury that they complained of with respect
20:25
Speaker 5: to the provisions related to transtudents. That is the argument,
20:29
Speaker 5: and that is the basis for the sweeping injunctions that
20:33
Speaker 5: reach across all of the areas in which this Title
20:37
Speaker 5: nine regulation covered, and like I said, including related to
20:41
Speaker 5: general protections from discrimination for pregnant and breastleading students. And
20:46
Speaker 5: so the vision from the court was that what they
20:47
Speaker 5: couldn't sever the various provisions, and.
20:50
Speaker 2: The Solicitor General had only asked the Court to allow
20:54
Speaker 2: the other provisions to be enforced while the legal fight
20:59
Speaker 2: goes on.
21:00
Speaker 1: Yes, that's correct.
21:01
Speaker 5: So there had been a motion for partial stay that
21:05
Speaker 5: had been filed in the appeals courts in the sixth
21:09
Speaker 5: and fifth Circuits, and the motion for the partial stay
21:13
Speaker 5: was only seeking to stay the injunction with respect to
21:19
Speaker 5: the provisions that did not concern the single sex facilities
21:25
Speaker 5: in the hostile environment harassment, So in essence saying their
21:28
Speaker 5: complaining of injuries with respect to these two discreete things,
21:33
Speaker 5: we're not seeking to block the injunction with respect to those,
21:36
Speaker 5: but it sleeps too broadly, and we are seeking relief
21:40
Speaker 5: from this incredibly broad injunction that prevents us from implement
21:47
Speaker 5: mening this critical rule protecting students and staff from sex
21:51
Speaker 5: discrimination and education. So that was the stay they thought
21:55
Speaker 5: from the lower federal appeals courts. Those were denied at
21:58
Speaker 5: the appeals level, and then ultimately they went to the
22:01
Speaker 5: Supreme Court seeking the same stay with respect to the
22:07
Speaker 5: rest of the rule and not challenging the stay with
22:11
Speaker 5: respect to the to the two provisions that I was mentioning,
22:14
Speaker 5: the hostile environment and the single sex facilities. Now there
22:18
Speaker 5: is some complicated piece to all this, which is that
22:21
Speaker 5: it is in part complicated because of how the Supreme
22:23
Speaker 5: Court ultimately does it. But there's a definitional provision at
22:27
Speaker 5: the center of all this as well, and the SU's
22:30
Speaker 5: office also thought a stay of the injunction with respect
22:34
Speaker 5: to the definitional provision, and that definitional provision, you know,
22:38
Speaker 5: in essence, the piece of the rule that defines what
22:42
Speaker 5: is sex discrimination for purposes of Title nine and explains
22:46
Speaker 5: that sex includes cender identity, sex, stereotyping, pregnancy status, and
22:52
Speaker 5: this broad understanding of what it means to discriminate because
22:56
Speaker 5: of sex Undercidle nine. So this definitional provision was also
22:59
Speaker 5: at the center of the litigation. Even though the states
23:03
Speaker 5: that brought the initial lawsuit never complained that they were
23:06
Speaker 5: injured by the definitional provision, and if you think about
23:09
Speaker 5: what that means in essence, the idea here would be well,
23:13
Speaker 5: certainly after Boss Stock, which held that under Title seven,
23:18
Speaker 5: sex discrimination includes a prohibsion on discrimination against LGBT people
23:23
Speaker 5: in educational settings, a school couldn't say deny someone the
23:27
Speaker 5: ability to be a graduation speaker simply because they're transgender.
23:31
Speaker 5: There's general educational protections against discrimination for the community, and
23:38
Speaker 5: that is distinct from the injuries being complained of with
23:42
Speaker 5: respect to you know, in particular bathrooms and pronouns. And
23:45
Speaker 5: so they did speak a stay with respect of the
23:47
Speaker 5: definitional provision, but again that was denied at the Intermediate
23:52
Speaker 5: appeals Court and then at the Supreme Court they thought
23:55
Speaker 5: the partial stay of the sweeping injunction with the exception
23:59
Speaker 5: of the two provisions that they did not seek of.
24:02
Speaker 2: Stay coming up next. So what split the court five
24:05
Speaker 2: to four? This is Bloomberg. So it was five to
24:09
Speaker 2: four decision, but all nine members of the court agreed
24:12
Speaker 2: that the parts of the rules that include the protections
24:16
Speaker 2: for transgender students, you know, the definition of sex discrimination
24:20
Speaker 2: including gender identity, and the restrictions on same sex spaces
24:25
Speaker 2: shouldn't go into effect until the legal challenges are resolved.
24:28
Speaker 2: But tell us why the majority the five in a
24:31
Speaker 2: very very short opinion agreed with the lower courts.
24:35
Speaker 5: So this is where things get complicated and pretty unfortunate.
24:38
Speaker 5: And that is you know, again, this is all happening
24:42
Speaker 5: on the shadow docket and the context of emergency relief,
24:45
Speaker 5: without the benefit of full briefing and without the benefit
24:48
Speaker 5: of oral argument in a procureum order that is, as
24:52
Speaker 5: you know, two and a half pages and two and
24:54
Speaker 5: a half pages addressing legal issues that are underlying hosts
25:00
Speaker 5: of cases in the lower courts over many years, and
25:02
Speaker 5: then a fifteen hundred page rule, and this cursory treatment
25:06
Speaker 5: just shows that the hazards of the shadow docket and
25:10
Speaker 5: how unfortunately imprecise it is. And then what happens with
25:15
Speaker 5: critical pieces of federal administrative action, and then of course
25:19
Speaker 5: the rights and responsibilities of individuals across the country, because
25:23
Speaker 5: you have this two and a half page order which
25:24
Speaker 5: in essence doesn't really say anything and in fact misconstrues
25:30
Speaker 5: the United States's day application, in essence suggesting that they
25:36
Speaker 5: have not sought relief from the injunction against the definitional provision,
25:41
Speaker 5: and so they sort of just ignore that. And then
25:45
Speaker 5: I think this is really important, and it is also unclear,
25:47
Speaker 5: but that's how I'm interpreting it. And then the question is,
25:50
Speaker 5: in essence, are they likely to succeed on the merits
25:54
Speaker 5: meaning day of the United States, on the merits of
25:56
Speaker 5: the claim that you can set the provisions that this
26:03
Speaker 5: alleged injuries flow from from the rest of the rule,
26:05
Speaker 5: And in essence, the procureum order says, no, they are
26:10
Speaker 5: not likely to succeed on that claim, in essence that
26:12
Speaker 5: they're all interconnected, in part because this definitional provision is
26:18
Speaker 5: sort of at this center. But they don't in any
26:21
Speaker 5: way contend with several of the arguments that the United
26:25
Speaker 5: States has raised, and you know, somewhat curiously, and I
26:29
Speaker 5: would say disingenuously, they suggest that the United States has
26:34
Speaker 5: not explained how you can sever those things, even though
26:37
Speaker 5: in their briefing they say, you know, so quite clearly
26:40
Speaker 5: that an injury related to trans people using the bathroom
26:44
Speaker 5: has no impact on the rest of the rule concerning
26:48
Speaker 5: whether or not you could, for example, kick a breastfeeding
26:52
Speaker 5: student out of school. And I think intuitively, any person
26:56
Speaker 5: understands these to be discreet things, even when it comes to,
27:01
Speaker 5: you know, the overall authority of the government to promulgate
27:06
Speaker 5: these rules with respect to the meaning of Title nine.
27:08
Speaker 5: So the majority of two and a half page order,
27:10
Speaker 5: as far as I can tell, doesn't really take the
27:14
Speaker 5: United States arguments at base value. It doesn't even seem
27:17
Speaker 5: to contend with them as they were presented, and an
27:20
Speaker 5: essence just suggests that these provisions rise and fall together.
27:24
Speaker 2: Let's talk about the four in the minority or dissent,
27:27
Speaker 2: which was the three Liberals and Justice Gorsuch. And they
27:31
Speaker 2: at least wrote nine pages. What was their descent about?
27:35
Speaker 5: Well, I mean, that's a great question. What was their
27:37
Speaker 5: dis about? They wrote more, you know, in terms of
27:41
Speaker 5: the number of pages, not much more, And they don't challenge,
27:46
Speaker 5: first and foremost, they don't challenge the majorities in misrepresentation
27:50
Speaker 5: of the United States position. So, in essence, we end
27:52
Speaker 5: up with this very hard to follow, very cursory, you know,
27:57
Speaker 5: order and dissent that does not to be responding to
28:01
Speaker 5: what is actually presented before them. And so the descent
28:04
Speaker 5: leaves unchallenged this idea that the United States has an
28:09
Speaker 5: essence conceded to leave the definitional provision in place. So
28:14
Speaker 5: that's a big problem because it sort of does not
28:18
Speaker 5: get at sort of the fundamental question of their stay application,
28:23
Speaker 5: which is that, you know, there's a huge amount of
28:26
Speaker 5: harm flowing from this, and in fact, these provisions can
28:29
Speaker 5: be severed from from one another, and here's how and
28:32
Speaker 5: why not to mention, there is within the United States
28:36
Speaker 5: stay application argument that the definitional provision is compelled by
28:41
Speaker 5: boss stock. In other words, the Supreme Court has already
28:45
Speaker 5: held that, you know, at least in Title seven, which
28:49
Speaker 5: usually is interpreted to be the same with respect to
28:53
Speaker 5: whether or not something is because of or based on sex,
28:57
Speaker 5: has held that it is because of sex to discriminate
29:00
Speaker 5: against someone because they are transgender. This seemingly obviously flows
29:05
Speaker 5: from that. But there's a lot of confusion here because
29:08
Speaker 5: it is not clear when the dissent says all nine
29:12
Speaker 5: members of the Court agree that the respondents were entitled
29:17
Speaker 5: to the underlying relief, what that refers to, and if
29:22
Speaker 5: in fact all nine members of the Court agree on anything,
29:26
Speaker 5: especially given the misrepresentation by the Perterium Order of what
29:30
Speaker 5: the United States position actually was. And so I hesitate
29:34
Speaker 5: to say what this means or or says, because it
29:39
Speaker 5: seems unlikely that they meant the states were entitled to
29:46
Speaker 5: relief on the merits that somehow, you know, Title nines
29:52
Speaker 5: protections can't be interpreted into aclude LGBTQ students. I find
29:57
Speaker 5: that to be very unlikely interpretation of what this very
30:02
Speaker 5: curious sentence in is referring to. That said, it is
30:06
Speaker 5: unclear and it is causing obviously a lot of confusion
30:11
Speaker 5: among people who are trying to decipher this short but
30:17
Speaker 5: impactful order. You know, my interpretation of it is in
30:23
Speaker 5: essence that you know, as to the provisions first that
30:27
Speaker 5: everyone has either agreed or has misrepresented that are not
30:31
Speaker 5: being challenged with respect to a stay. So, in other words,
30:34
Speaker 5: the provisions that the court has said, nobody is seeking
30:39
Speaker 5: a stay of the injunction. As to those, my read
30:42
Speaker 5: is they're saying, everyone agrees that the alleged injuries allow
30:47
Speaker 5: them to receive injunctive relief as to those provisions, in
30:52
Speaker 5: other words, that was a proper scope of remedy, not
30:56
Speaker 5: necessarily that they were entitled to relief on the merrit.
31:00
Speaker 2: Justice Corsetch wrote the boss Stock opinion, as you know,
31:04
Speaker 2: and he sided with the liberals here, is it surprising
31:07
Speaker 2: to you that the Chief Justice who joined in the
31:10
Speaker 2: boss Stock majority opinion sided with the other conservatives here,
31:15
Speaker 2: I mean, do you read anything into that?
31:17
Speaker 5: Well, so again, I mean I'm not exactly sure, and
31:21
Speaker 5: I hesitate to guess what any of them are suggesting
31:26
Speaker 5: as to the underlying Merit's question, that is to say,
31:29
Speaker 5: you know, whether or not Title nine can or must
31:34
Speaker 5: be interpreted in such a way that includes prohibitions on
31:38
Speaker 5: discrimination against LGBTQ people, because I think, and again coming
31:42
Speaker 5: back to the extraordinary hazards of the shadow docket and
31:46
Speaker 5: these emergency orders, it's very possible that everyone is just
31:50
Speaker 5: laying in to one degree another on what is the appropriate,
31:54
Speaker 5: you know, scope of the injunction visa the claimed injuries
31:59
Speaker 5: that the States alleged in their initial filing. I recognize
32:04
Speaker 5: that that is somewhat difficult to square with some aspects
32:08
Speaker 5: of the order and the descent, but I also don't
32:11
Speaker 5: think it's clear what everyone is referring to at various points.
32:16
Speaker 5: So you know, in some sense, it is possible to
32:19
Speaker 5: me that you have a procureum order that reflects a
32:22
Speaker 5: subset of the justices saying two circuits have said these things,
32:27
Speaker 5: multiple district courts have enjoined it. We are, in this
32:30
Speaker 5: emergency posture going to let it stand. Do I think
32:33
Speaker 5: that's a consistent position with what they've done in other cases? No,
32:37
Speaker 5: But could that be what's happening here in a Friday
32:40
Speaker 5: night order in August with very little reasoning. Maybe so,
32:43
Speaker 5: I would say in terms of whether or not it
32:46
Speaker 5: means that the Chief, you know, sort of has a
32:49
Speaker 5: limited interpretation of Bostock's reach with respect to other statutory
32:54
Speaker 5: and constitutional protections for trans people, I'm not willing to
32:57
Speaker 5: sort of hazard a guess on that justice yet, but
33:00
Speaker 5: I don't think either of these, the order or the descent,
33:04
Speaker 5: are particularly encouraging endorsements of this Title nine rule. I
33:08
Speaker 5: think it is deeply upsetting in terms of what it
33:12
Speaker 5: means for people across the country, because we now have
33:15
Speaker 5: a regulation that is in effect in some parts of
33:19
Speaker 5: the country and not others, with some provisions you know,
33:23
Speaker 5: enjoined to varying degrees depending on the circuit, and obviously
33:29
Speaker 5: as an enforceability administrability matter, that is horrible for the
33:33
Speaker 5: federal government, but it's also horrible for the individuals who
33:37
Speaker 5: are trying to protect their rights Title Mine, and it's
33:40
Speaker 5: also horrible for the entities that are, you know, trying
33:44
Speaker 5: to comply with their obligations under Title.
33:46
Speaker 2: Nind next term, the Supreme Court is going to take
33:49
Speaker 2: up the issue of gender transition care in a Tennessee case.
33:54
Speaker 4: Do you think that in that case.
33:56
Speaker 2: The Court will actually decide the issue?
34:01
Speaker 5: Well, so in scrimmati, which is the case that the
34:04
Speaker 5: Court is going to be hearing this term, which which
34:07
Speaker 5: comes from the United States petitions out of the prohibition
34:10
Speaker 5: on medical care for transgender adolescence in Tennessee. You know,
34:14
Speaker 5: the question is whether or not these laws that categorically
34:18
Speaker 5: prohibit medical care for transgender minors violate the Constitution, And
34:22
Speaker 5: so they will be answering, you know, sort of one
34:25
Speaker 5: set of questions with respect to the ways in which
34:29
Speaker 5: transgender people and particularly transgender youth have had their rights
34:33
Speaker 5: attacked by state legislatures. And the question there is really
34:37
Speaker 5: is it sex discrimination? Is it trans status discrimination? When
34:40
Speaker 5: the government draws these lines based on gender transition and
34:44
Speaker 5: categorically prohibits this medical treatment, this is a constitutional case.
34:48
Speaker 5: I think the main question is really what level of
34:50
Speaker 5: scrutiny is going to apply? And whether they resolve it
34:54
Speaker 5: in such a way that answers other questions, whether they don't,
34:57
Speaker 5: I think that is still very much up in the air.
35:00
Speaker 5: I think whatever happens in Scrimmati, they're going to separately
35:02
Speaker 5: have to contend with the Title nine regulations, because at
35:06
Speaker 5: this point it seems that this is going to be
35:09
Speaker 5: percolating in the lower courts and likely to end up
35:12
Speaker 5: the Supreme Court. Of course, all of that is dependent
35:15
Speaker 5: on what happens in the election, because these are rules
35:19
Speaker 5: that are promulgated by the Biden administration's Department of Education.
35:23
Speaker 5: If Trump wins the presidency, those rules will be rescinded
35:27
Speaker 5: or they will no longer enforce them, and then they
35:29
Speaker 5: will seek to promulgate new rules and probably have some
35:33
Speaker 5: sort of temporary rule of rescinding the old ones. So
35:36
Speaker 5: some of this all depends on what happens in the election.
35:39
Speaker 5: And then with respect to the constitutional challenges to the
35:41
Speaker 5: gender firming medical care bands for adolescents, the Supreme Court
35:45
Speaker 5: is going to consider those. They are going to have
35:47
Speaker 5: to contend with what is the nature of discrimination against
35:52
Speaker 5: trans people and what is the reach of Bostock. And
35:55
Speaker 5: then also because the states have argued that these cases
35:59
Speaker 5: are governed by dobs. Also, what is the reach of dobs.
36:04
Speaker 5: So there's a lot that's already up at the court imminently,
36:08
Speaker 5: and I expect there will be more. And obviously trans
36:11
Speaker 5: people and their families are are just trying to live
36:15
Speaker 5: their lives.
36:16
Speaker 2: Conservative states have passed a slew of laws aimed at
36:20
Speaker 2: transgender youth, including restricting treatments like puberty blocking drugs, hormone therapy,
36:27
Speaker 2: or surgeries for miners experiencing gender dysphoria, laws regulating bathroom use,
36:33
Speaker 2: and pronouns. Which laws affecting transgender youths are the most
36:38
Speaker 2: common in these states.
36:41
Speaker 5: Just to give sort of temporal framework here, in twenty twenty,
36:45
Speaker 5: no states had any of these laws, and now we're
36:49
Speaker 5: in a situation where half the country, so about twenty
36:53
Speaker 5: four states bans both medical care for transcender adolescents related
36:58
Speaker 5: to gender transitions, as well as the inclusion of trans
37:01
Speaker 5: girls and sports.
37:02
Speaker 1: Those are the main.
37:03
Speaker 5: Central pieces of legislation that have been passed in the
37:06
Speaker 5: most Then, the bills that ban trans students from the
37:10
Speaker 5: bathroom are you know, increasing in number, and there's you know,
37:14
Speaker 5: sort of about ten or so states that ban or
37:17
Speaker 5: restrict the ability of trans students to use the restroom
37:21
Speaker 5: that aligns with who they are. Then there's you know,
37:24
Speaker 5: a number of leather laws that aren't you know, increasing
37:27
Speaker 5: that we're seeing, including you know, sort of the don't
37:30
Speaker 5: say gay style laws, so restrictions on discussions of LGBTQ
37:34
Speaker 5: people and content in schools. There's restrictions on the ability
37:40
Speaker 5: of students and school staff to use pronouns that accord
37:44
Speaker 5: with their gender identities. So those are sort of percolating
37:47
Speaker 5: and expanding. But I would say the primary legal frameworks
37:51
Speaker 5: or emphasism and states across the country over the last
37:54
Speaker 5: three years has been banning medical care and inclusion in sports.
37:59
Speaker 2: Unbelievable number of laws in just about three years. Thanks
38:04
Speaker 2: so much for joining me today, Chase. That's Chase Strangio,
38:07
Speaker 2: Deputy director for Transgender Justice at the ACLU. And that's
38:12
Speaker 2: it for this edition of the Bloomberg Law Podcast. Remember
38:15
Speaker 2: you can always get the latest legal news by subscribing
38:17
Speaker 2: and listening to the show on Apple Podcasts, Spotify, and
38:21
Speaker 2: at Bloomberg dot com slash podcast Slash Law.
38:24
Speaker 4: I'm June Grosso and this is Bloomberg