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Employment Cases From Reverse Discrimination to RICO · Bloomberg Law

0:03
Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
0:10
Speaker 1: The Supreme Court has at least five cases on its
0:13
Speaker 1: dock at this term that could potentially reshape the employment
0:17
Speaker 1: law landscape. The cases cover a broad range of issues,
0:22
Speaker 1: from a failed drug test by a truck driver suing
0:25
Speaker 1: CBD makers using the Rico statute to an Ohio public
0:30
Speaker 1: employees claim that she was denied promotion and demoted because
0:34
Speaker 1: she's a heterosexual. The first case that Justice has heard
0:38
Speaker 1: this term on Monday involve workers suing Alabama over unemployment
0:43
Speaker 1: benefits who are stuck in a sort of catch twenty two.
0:47
Speaker 1: Here's how Justice Sonya Sotomayor put it. See it really
0:50
Speaker 1: stuck in a state process with a loop that you
0:54
Speaker 1: can't get out of. Joining me is an expert in
0:56
Speaker 1: employment law, Anthony Ancidi, a partner scour Tony. The Justices
1:02
Speaker 1: kicked off the term with an employment law case tell
1:05
Speaker 1: us about it.
1:06
Speaker 2: This case involves residents of Alabama who had applied for
1:10
Speaker 2: unemployment benefits during the COVID pandemic, and they challenged the
1:17
Speaker 2: way that the State of Alabama had handled their claims.
1:21
Speaker 2: They sought to bring claims under a federal Statute Section
1:25
Speaker 2: nineteen eighty three, and that allows individuals to sue the
1:30
Speaker 2: state government and officials of the state government for violating
1:33
Speaker 2: the civil rights under federal law. They alleged that the
1:37
Speaker 2: state's policies and its practices and its procedures related to
1:40
Speaker 2: unemployment compensation applications violated the Social Security Act of nineteen
1:45
Speaker 2: thirty five, which is obviously a federal statute. They also
1:49
Speaker 2: claimed that they had suffered a violation of their due
1:52
Speaker 2: process rights under the Constitution. This case comes to the
1:56
Speaker 2: US Supreme Court from the Alabama Supreme Court, which said
2:00
Speaker 2: that state law requires that the plaintiffs in the case
2:04
Speaker 2: first bring their claims to the state's Department of Labor
2:07
Speaker 2: and exhaust all administrative remedies that are available under state law,
2:12
Speaker 2: and according to the Alabama Court, that is supported by
2:16
Speaker 2: Supreme Court precedents, saying that that requirement does exist with
2:20
Speaker 2: respect to these claims. So the issue is whether these
2:24
Speaker 2: workers who are seeking unemployment benefits need to exhaust state
2:27
Speaker 2: administrative remedies before they can bring a claim under a
2:30
Speaker 2: federal civil rights law. The reason why this is going
2:34
Speaker 2: to be important, I think probably in these cases is
2:36
Speaker 2: because they didn't do that, and if it is determined
2:39
Speaker 2: that they were required to exhaust state administrative remedies, that
2:44
Speaker 2: that could jeopardize the federal claims that they're seeking to
2:48
Speaker 2: make under Section nineteen eighty three in this case.
2:50
Speaker 1: And tell us about the Supreme Court's prior rulings in
2:53
Speaker 1: this area in the cases of Patsy versus Board of
2:57
Speaker 1: Regents and Felder versus Casey, and.
3:00
Speaker 2: That's exactly what the Alabama Supreme Court relied upon. And
3:04
Speaker 2: the fact that the US Supreme Court then took this
3:07
Speaker 2: case up may mean that there has been a shift
3:10
Speaker 2: or a change in the Supreme Court's point of view
3:12
Speaker 2: with respect to this because the US Supreme Court has,
3:16
Speaker 2: of course complete discretion as to what cases it does
3:20
Speaker 2: or does not take, and it takes obviously a very
3:22
Speaker 2: small handful of cases every year. And the fact that
3:26
Speaker 2: they have granted sorcherai that is the Latin word for
3:30
Speaker 2: the review that is granted in this case and in
3:32
Speaker 2: these cases generally, may suggest that there is a different
3:36
Speaker 2: point of view.
3:36
Speaker 1: During the oral arguments, Justice Sonia Sotomayor told the plaintiff's
3:42
Speaker 1: lawyer that he was really stuck in a state process
3:46
Speaker 1: with a loop that you can't.
3:47
Speaker 2: Get out of right. And I think again, this is
3:51
Speaker 2: one of those situations where it may seem like a technicality,
3:55
Speaker 2: but there is a lot of law with respect to
3:58
Speaker 2: these issues in the ployment context and in the administrative
4:02
Speaker 2: context that does exist. We see this all the time,
4:06
Speaker 2: where these administrative filings and processes, although they do sometimes
4:11
Speaker 2: take on somewhat of a pro forma status, meaning that
4:15
Speaker 2: the lawyer representing the claimant simply has to file something
4:20
Speaker 2: and often can do it online. And in California, where
4:23
Speaker 2: I'm most familiar with administrative filings and the employment context,
4:28
Speaker 2: the state administrative agency California Civil Rights Department, will open
4:33
Speaker 2: and close the administrative file the very same day, and
4:36
Speaker 2: in almost every single case, the administrative apparatus is not
4:40
Speaker 2: triggered and they don't get involved. But if the plaintiff
4:44
Speaker 2: has not done that first and proceeds directly to court
4:47
Speaker 2: without having exhausted those remedies, that's a means by which
4:52
Speaker 2: the defense can then say you can't proceed in the
4:54
Speaker 2: case because you should have at least given the administrative
4:57
Speaker 2: apparatus or the agency some opportunity to prosecute this. I
5:02
Speaker 2: think some of this is a result of just the
5:04
Speaker 2: passage of time, because many of these civil rights statutes,
5:07
Speaker 2: for example, when they were first passed, they were not
5:10
Speaker 2: intended to directly lead to litigation or court cases or
5:15
Speaker 2: jury trials or any of this. They were supposed to
5:17
Speaker 2: be and they were often designed to be decided by
5:20
Speaker 2: administrative agencies, which is obviously a somewhat lesser formal proceeding
5:25
Speaker 2: than having a case go to court. In the way
5:27
Speaker 2: in which the laws developed, though, and procedures have developed,
5:30
Speaker 2: and I think really administrative agencies have just been overwhelmed
5:34
Speaker 2: with the number of claims. The administrative apparatus is kind
5:37
Speaker 2: of atrophied in these cases, and so as a result
5:40
Speaker 2: of that, it may seem again like a technicality that
5:43
Speaker 2: that has to be done. But the law has not
5:45
Speaker 2: been changed in most places. And that's I think what
5:48
Speaker 2: is probably at the root of what Justice Sodomayer was
5:51
Speaker 2: talking about.
5:53
Speaker 1: So you think that the court is going to uphold
5:55
Speaker 1: the requirement of exhausting administrative remedies.
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Speaker 2: It seems like they should probably is something that ultimately
6:02
Speaker 2: would have to be decided or probably better decided and
6:05
Speaker 2: a remedied. If a remedy is going to be obtained
6:07
Speaker 2: from a legislative body that would look at something like
6:10
Speaker 2: this and make the determination that, as I said, some
6:13
Speaker 2: of these administrative agencies have atrophied, and there's really not
6:16
Speaker 2: as much of a reason today as there might have
6:18
Speaker 2: been thirty or forty years ago to require those processes.
6:23
Speaker 1: Next week, the court is going to hear the case
6:25
Speaker 1: of medical marijuana versus Horn. This case intrigues me because
6:29
Speaker 1: it involves a truck driver, medical marijuana and the RICO Act.
6:36
Speaker 2: Walked into a bar. Yeah, it's a group of unlikely
6:41
Speaker 2: entities and parties I suppose that are involved in this case,
6:45
Speaker 2: and the set of circumstances is somewhat unique. This was
6:48
Speaker 2: a commercial truck driver who was required to pass periodic
6:52
Speaker 2: drug screen and he was fired when he tested positive
6:56
Speaker 2: for THHC, which of course is the psychoactive compound that
7:01
Speaker 2: is part of the cannabis plant and that is triggered
7:05
Speaker 2: in the event that one consumes or smokes cannabis. The
7:08
Speaker 2: driver claimed that he had not intentionally ingested THHC, but
7:15
Speaker 2: that he had used an elixir an interesting word for
7:18
Speaker 2: severe pain that was marked as containing only CBD, which
7:23
Speaker 2: is another compound that comes from marijuana. But which is
7:27
Speaker 2: not psychoactive and is not illegal. It's generally legal to
7:32
Speaker 2: consume CBD. So his argument was I essentially consume something
7:38
Speaker 2: that was mislabeled and by the way that mislabeling then
7:41
Speaker 2: led to his being fired. He has now made this
7:45
Speaker 2: claim in the form of a assertion of fraud under
7:49
Speaker 2: the RICO the Racketeer Influenced in Corrupt Organizations Act, which
7:53
Speaker 2: typically originally was I think intended to reach mafia members
7:57
Speaker 2: but often gets thrown around these days in different types
8:00
Speaker 2: of cases. But it's known by the acronym RICO riico,
8:03
Speaker 2: and he's claiming that the CBD maker slash. I guess
8:07
Speaker 2: the thhc CBD maker in this case has conducted itself
8:11
Speaker 2: in a way that it has violated. The RICO statute, usually,
8:14
Speaker 2: as I say, was typically used for targeting organized crime,
8:18
Speaker 2: but it does allow plaintiffs to bring certain civil cases
8:22
Speaker 2: for fraud and potentially collect triple damages. So in this case,
8:25
Speaker 2: the damages that he'll be seeking presumably will be the
8:28
Speaker 2: lost wages and benefits that flowed from his loss of employment.
8:32
Speaker 2: I suppose there may be other damages that he's going
8:34
Speaker 2: to seek as well. This case found itself to the
8:38
Speaker 2: Second Circuit Court of Appeals in New York, and that
8:42
Speaker 2: court allowed the driver to proceed with his claim. But
8:44
Speaker 2: other appeals courts have tossed similar lawsuits where there was
8:48
Speaker 2: an attempt to seek monetary damages under RICO for personal injuries.
8:52
Speaker 2: I don't know that it's arisen previously in the context
8:55
Speaker 2: of CBD THCHC, but that happens to be the factual
8:59
Speaker 2: scenario in this case. And so in this case, the
9:02
Speaker 2: CBD manufacturer wants the Supreme Court to dismiss the RICO claim,
9:06
Speaker 2: asserting that it's merely a garden variety products liability suit
9:10
Speaker 2: and that it should not be able to proceed under
9:13
Speaker 2: the Rico statute.
9:14
Speaker 1: There's a split in the circuits on this. Do you
9:16
Speaker 1: think the Supreme Court took the case to overturn the
9:20
Speaker 1: Second Circuit?
9:21
Speaker 2: It sounds like they might. Again. You never can tell,
9:24
Speaker 2: because it certainly is not the case that every time
9:26
Speaker 2: the US Supreme Court, or really any appellate court takes
9:29
Speaker 2: a case when they have discretion that they are accepting
9:32
Speaker 2: review to affirm. I guess the inclination is, why not
9:35
Speaker 2: just leave well enough alone? If they're just going to
9:38
Speaker 2: affirm the lower court. You typically think that they will
9:41
Speaker 2: do something different, but they obviously don't always affirm the
9:44
Speaker 2: lower court. And in this situation, as I said, there
9:47
Speaker 2: is a conflict among the circuits, and that's typically when
9:51
Speaker 2: the US Supreme Court does get involved. So they may
9:53
Speaker 2: grant a review in a case in which one of
9:57
Speaker 2: seven circuits rules one and the other sixth rule another way.
10:02
Speaker 2: It doesn't necessarily mean they're going to affirm or reverse
10:05
Speaker 2: that one circuit. It just means they're trying to resolve
10:08
Speaker 2: whether the other six were right and this one was wrong,
10:11
Speaker 2: or vice versa. And I guess we're not going to
10:14
Speaker 2: really know for a time. We should also say these
10:16
Speaker 2: are all cases that are in the current term of
10:19
Speaker 2: the US Supreme Court, which begins every year on the
10:22
Speaker 2: first Monday of October, and the term then usually concludes
10:27
Speaker 2: with a great degree of drama and fireworks in late
10:31
Speaker 2: June early July. I've often said that the Supreme Court
10:34
Speaker 2: has an unerring sense of drama and of entertainment in
10:39
Speaker 2: some ways, I suppose because they saved the biggest cases
10:42
Speaker 2: for the last as they did the last term when
10:45
Speaker 2: they had a number of very significant opinions that came
10:47
Speaker 2: out in late June. They're almost all out, I think,
10:50
Speaker 2: without exception before the fourth of July holiday.
10:52
Speaker 1: Absolutely.
10:54
Speaker 2: See.
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Speaker 1: My theory is they're not saving the best for a last,
10:57
Speaker 1: They're saving the most controversial for last, and then they
11:00
Speaker 1: take off on their three month vacation.
11:02
Speaker 2: But you know that's perhaps and avoid any demonstrations some
11:07
Speaker 2: of their opinions.
11:09
Speaker 1: On November fifth, there will be oral arguments in a
11:12
Speaker 1: case involving Overton exemptions, of.
11:15
Speaker 2: Course, I know, you know, and we should mention that
11:17
Speaker 2: November fifth, something else is happening that day, really election
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Speaker 2: den Yes, So this this case involves Again it sounds
11:25
Speaker 2: like somewhat of a dry issue, but I think it's
11:27
Speaker 2: an extremely important one, especially for employers and employees. That's
11:31
Speaker 2: the context in which it arises, and it arises under
11:34
Speaker 2: a statute known as the Fair Labor Standards Act, which
11:36
Speaker 2: is a federal law that protects wage an hour practices
11:42
Speaker 2: of employees and employers that governs those situations. And the
11:47
Speaker 2: question here has to do with the preponderance of evidence
11:50
Speaker 2: standard of proof versus what's called the clear and convincing
11:53
Speaker 2: standard of evidence. And I should say that there are
11:56
Speaker 2: at least three differing standards of proof that typically arise
12:01
Speaker 2: in the case. In most civil cases, you have the
12:04
Speaker 2: preponderance of evidence standard. Law students are taught that that
12:08
Speaker 2: means that the plaintiff has to prove basically about fifty
12:12
Speaker 2: one percent of the evidence in their favorite that's kind
12:15
Speaker 2: of a rough way of saying it. But it doesn't
12:17
Speaker 2: have to be a huge amount in the favor of
12:19
Speaker 2: the plaintiff, meaning that the burden of proof is not
12:21
Speaker 2: that particularly burden some but the preponderance means that more
12:25
Speaker 2: than not the evidence needs to point in the favor
12:27
Speaker 2: of the plaintiff in order for the plaintiff to win.
12:29
Speaker 2: The other standard that we're all pretty familiar with just
12:32
Speaker 2: from watching TV shows is the beyond the reasonable doubt standard,
12:35
Speaker 2: which is a much higher burden of proof. That is
12:38
Speaker 2: the criminal standard of evidence that is required to get
12:41
Speaker 2: a criminal conviction, So the prosecution needs to prove that
12:44
Speaker 2: the defendant in a criminal case violated the law beyond
12:48
Speaker 2: the reasonable doubt. Somewhere floating between those two standards is
12:51
Speaker 2: the clear and convincing evidence standard, meaning it's got to
12:54
Speaker 2: be a little bit more than half, but a lot
12:57
Speaker 2: less than what you would need for beyond a reasonable doubt,
13:00
Speaker 2: their floats somewhere in between. And that's the very question
13:03
Speaker 2: that that issue in this case, as comes out of Richmond, Virginia,
13:05
Speaker 2: the Fourth Circuit Court of Appeals, The question is does
13:08
Speaker 2: an employer have to prove, because the employee does have
13:11
Speaker 2: the burden of proof on these cases, that when an
13:14
Speaker 2: employee claims that they've been misclassified, meaning that they didn't
13:19
Speaker 2: get overtime and they should have, they were misclassified for
13:21
Speaker 2: some reason as exempt from overtime, does the employer have
13:25
Speaker 2: to prove that the employee was properly classified by the
13:29
Speaker 2: clear and convincing standard, which is that medium proof standard,
13:33
Speaker 2: or just the preponderance of the evidence standard, which is
13:36
Speaker 2: an easier burden to meet. Obviously, the plaintiffs in a
13:40
Speaker 2: case like this are going to be pushing for clear
13:42
Speaker 2: and convincing because that would mean it's going to be
13:44
Speaker 2: harder for the employer to win, and in this case,
13:48
Speaker 2: that's going to be the issue. A number of federal
13:50
Speaker 2: circuit Courts of Appeals have already weighed in on this,
13:53
Speaker 2: including the Fifth, sixth, seventh, ninth, ten to eleven, and
13:56
Speaker 2: they've all applied the lower standard of preponderance of the evidence.
14:00
Speaker 2: In this case, the Fourth Circuit Court said that the
14:02
Speaker 2: clear and convincing standard is the one that applies.
14:05
Speaker 1: I'm betting on the fifth, sixth, seventh, ninth, tenth, and
14:09
Speaker 1: eleventh Circuits in this case.
14:12
Speaker 2: Yes, If the number of courts is the deciding factor,
14:15
Speaker 2: then I think you're probably right. The Fourth seems to
14:17
Speaker 2: be standing alone in connection with its determination on this case.
14:21
Speaker 1: Coming up next a case claiming reverse discrimination. I'm June Grosso.
14:26
Speaker 1: When you're listening to Bloomberg, the Supreme Court is scheduled
14:29
Speaker 1: to hear at least five cases involving employment law and
14:33
Speaker 1: a range of issues. I've been talking to Anthony on CD,
14:36
Speaker 1: a partner at Prosskauer. Next, we have a case with
14:39
Speaker 1: six circuits split on former employees suing under the Americans
14:45
Speaker 1: with Disabilities Act.
14:46
Speaker 2: This is an interesting case and it could affect obviously
14:50
Speaker 2: many many employees, former employees, retired employees, in particular, as
14:55
Speaker 2: the population continues to age. I saw statistic the other
14:58
Speaker 2: day it said that more people are are reaching their
15:00
Speaker 2: sixty fifth birthday this year. Then I guess has ever
15:03
Speaker 2: occurred on planet early or certainly in the United States.
15:07
Speaker 2: You know, it's sort of the tail end of the
15:09
Speaker 2: Baby Boomers have now reached retirement age in many instances,
15:13
Speaker 2: and that's really what's that issue. In this particular case,
15:15
Speaker 2: this was a plaintiff a former firefighter for the City
15:19
Speaker 2: of Sanford, Florida, and she retired due to Parkinson's disease
15:25
Speaker 2: in twenty eighteen. She had served as a firefighter for
15:28
Speaker 2: about nineteen years when she joined the fire department in
15:32
Speaker 2: nineteen ninety nine. The city's policy was that it would
15:35
Speaker 2: provide free health insurance until age sixty five from employees
15:38
Speaker 2: who were retiring due to a disability. In two thousand
15:41
Speaker 2: and three, the city changed its plan and it limited
15:44
Speaker 2: the health insurance subsidy that disability retirees would get to
15:49
Speaker 2: twenty four months post retirement, meaning it wouldn't go until
15:52
Speaker 2: the age of sixty five. It would only go for
15:54
Speaker 2: twenty four months. In this case, former firefighter who did
15:57
Speaker 2: retire due to a disability out suit before her subsidy
16:01
Speaker 2: was set to expire, and she said that this change
16:04
Speaker 2: in policy was a violation of the Americans with Disabilities Act,
16:07
Speaker 2: the Rehabilitation Act, and then some statutory provisions under Florida law,
16:12
Speaker 2: as well as the Equal Protection clause under the Constitution.
16:15
Speaker 2: The district court dismissed and granted some re judgment on
16:19
Speaker 2: other claims, but otherwise disposed of her case and ruled
16:22
Speaker 2: in favor of the city. And the reason they did
16:25
Speaker 2: that again sound somewhat like a technicality, but obviously a
16:28
Speaker 2: very important one. They ruled that the statutes that she
16:31
Speaker 2: was proceeding under only applied to plaintiffs who quote hold
16:35
Speaker 2: or desire an employment position with the defendant at the
16:39
Speaker 2: time of the defendants allegedly wrongful act, and of course
16:43
Speaker 2: she neither held nor did she desire to hold, which
16:46
Speaker 2: really is a different word for saying an applicant unemployment
16:49
Speaker 2: position at the time of the alleged wrongful act. And
16:53
Speaker 2: so the precise question is ken a retiree such as
16:56
Speaker 2: the plaintiff in this case, sue for discrimination under the
17:00
Speaker 2: Americans with Disabilities Act over post employment fringe benefits that,
17:04
Speaker 2: had she said, been taken away on the basis of
17:07
Speaker 2: a discriminatory policy.
17:09
Speaker 1: Does this come up often, Tony, that a retiree is
17:12
Speaker 1: trying to sue over the ADA.
17:15
Speaker 2: You know, I don't think so. It's not something that
17:16
Speaker 2: I've seen a lot of. But again, since we're having
17:18
Speaker 2: a lot more retirees who are moving into that status.
17:24
Speaker 2: I would not be surprised if there are not other
17:26
Speaker 2: cases like this in the very near future where policies
17:30
Speaker 2: have been changed, because what is common, I can tell you,
17:33
Speaker 2: is the pairing down and in some cases eliminating the
17:37
Speaker 2: actual benefits that employees have received. There was a period
17:41
Speaker 2: of time when retirees, you know of the our companies
17:45
Speaker 2: and many other industries in the United States, would receive
17:47
Speaker 2: what's called a defined benefit plan, meaning they knew that
17:50
Speaker 2: when they retired they would get x hundred or thousand
17:53
Speaker 2: dollars a month as part of their retirement. Because those
17:56
Speaker 2: policies became so expensive due to inflation and and just
18:00
Speaker 2: any number of other factors, most employers have long since
18:03
Speaker 2: shifted away from what are called defined benefit plans like
18:06
Speaker 2: that to what's called a defined contribution plan, which is
18:09
Speaker 2: more like a four toh one K, which is there's
18:12
Speaker 2: a certain maximum amount you can contribute to those plans,
18:17
Speaker 2: or that the employer will contribute on your behalf, but
18:19
Speaker 2: there's no guarantee you're going to get x amount at
18:22
Speaker 2: the time that you retire. If you invest in the
18:24
Speaker 2: stock market, which of course the stock market over the
18:27
Speaker 2: last seventy or eighty years has had a fairly good
18:29
Speaker 2: track record ten percent plus. I think the returns on
18:33
Speaker 2: average over that period of time. You may very well
18:36
Speaker 2: be able to sort of ballpark what your retirement benefits are,
18:40
Speaker 2: but that's not exactly the same thing as knowing for
18:42
Speaker 2: sure what you're going to have plopped into your bank
18:45
Speaker 2: account every month. And that's what a defined benefit plan is,
18:47
Speaker 2: and those are few and far between these days.
18:49
Speaker 1: Just last Friday, the Court agreed to take a case
18:53
Speaker 1: challenging a rule by an Ohio public employee who claim
18:57
Speaker 1: she's a victim of reverse discrimination.
19:00
Speaker 2: Yes, you saved perhaps the most controversial case so far
19:04
Speaker 2: this term for last June. As I know, you have
19:07
Speaker 2: that unerring sense of drama like the Supreme Court.
19:09
Speaker 1: So you've been accused of worse though.
19:13
Speaker 2: So as you say, the review petition was granted just
19:17
Speaker 2: last Friday. There's no oral argument yet schedule, but it
19:20
Speaker 2: will be heard and decided before the fourth of July
19:24
Speaker 2: twenty twenty five. And in this case, the employee sues
19:29
Speaker 2: the Ohio Department of Youth Services, where she had worked
19:33
Speaker 2: for I believe several decades of public service. She had
19:37
Speaker 2: been earlier in her employment assigned to a new supervisor
19:42
Speaker 2: who was gay. She I should say, is a white, heterosexual,
19:46
Speaker 2: female former employee. She was assigned to a new supervisor
19:49
Speaker 2: who was gay. In twenty nineteen. She applied to be
19:53
Speaker 2: the department's bureau chief of quality, so she was seeking
19:57
Speaker 2: a promotion. She did not receive that position. In a
19:59
Speaker 2: few days later, she learned that she was being removed
20:02
Speaker 2: from her administrator position, the lower position that she had.
20:05
Speaker 2: The decision to remove her from the administrator position was
20:07
Speaker 2: made by not the gay supervisor, who was the first
20:11
Speaker 2: level supervisor above her position, but the second level supervisor
20:16
Speaker 2: and the department's director, both of whom were straight. So
20:19
Speaker 2: this becomes a somewhat problem issue for her in this
20:22
Speaker 2: case because the fact that she's being supervised by a
20:25
Speaker 2: gay employee seemingly had no effect at least as the
20:29
Speaker 2: case is currently framed upon. The demotion and the failure
20:32
Speaker 2: to give her the promotion. The department then awarded her
20:37
Speaker 2: former administrator position to a twenty five year old gay
20:40
Speaker 2: mad The department then selected a gay woman to serve
20:43
Speaker 2: as its bureau chief of quality. She then filed claims
20:47
Speaker 2: of discrimination the straight white female employee. She filed claims
20:51
Speaker 2: a discrimination based on her sexual orientation and gender against
20:55
Speaker 2: the department. She said that she was discriminated against on
20:59
Speaker 2: the base of being a heterosexual female. What happens next,
21:04
Speaker 2: The district Court, which is the trial court in the
21:06
Speaker 2: southern District of Ohio, grants some rey judgment to the
21:11
Speaker 2: employer and dismisses the case, and the Sixth Circuit in
21:15
Speaker 2: this case, which is based in Cincinnati, Ohio, affirms that dismissal.
21:20
Speaker 2: The basis for the dismissal and the affirming of the
21:22
Speaker 2: dismissal is as follows. They say that this plaintiff did
21:26
Speaker 2: not establish the necessary quote background circumstances close quote to
21:32
Speaker 2: sustain her claim of sexual orientation. So what's going on
21:35
Speaker 2: in this case? Why is the Supreme Court interested in it?
21:38
Speaker 2: The reason the Supreme Court's interested in it is because
21:41
Speaker 2: this element that both the district court, the trial court,
21:45
Speaker 2: and the appellate court applied, that is, requiring the employee
21:49
Speaker 2: to prove these background circumstances only exists if the plaintiff
21:53
Speaker 2: happens to be in the majority, meaning if it's a
21:57
Speaker 2: white employee, heterosexual employee, or in this case, I guess
22:01
Speaker 2: for gender reasons female. I guess there may be more
22:04
Speaker 2: females than males. I'm not sure how that's going to
22:07
Speaker 2: work out. But the real question is whether or not
22:09
Speaker 2: there is an additional burden placed upon a so called
22:13
Speaker 2: majority plaintiff that does not exist for a minority plaintiff
22:18
Speaker 2: or a plaintiff that is a member of a protected
22:20
Speaker 2: class that is a minority. Typically, in a discrimination case
22:24
Speaker 2: under Title seven, which is the federal anti discrimination law,
22:27
Speaker 2: an employee must show first of all, they belonged to
22:30
Speaker 2: a protected class. Two, they did well in their position,
22:33
Speaker 2: but were terminated, or they were demoted, or they didn't
22:36
Speaker 2: get a promotion, some other adverse action happened, and then
22:39
Speaker 2: they were third replaced by or treated worse than someone
22:43
Speaker 2: outside of the protected class. But if the person who's
22:47
Speaker 2: challenging the adverse action, as this plaintiff is, is a
22:51
Speaker 2: member of the traditional majority, for example, a white employee
22:55
Speaker 2: bringing a race discrimination claim or a male employee bringing
22:58
Speaker 2: a sex discrimination claim, that does not apply. We've seen
23:01
Speaker 2: in this case that plaintiff must prove an additional element,
23:05
Speaker 2: and that is they must demonstrate background circumstances which proves
23:09
Speaker 2: that their employer is the unusual one. That's the language
23:13
Speaker 2: of the court, unusual one who discriminates against the majority
23:17
Speaker 2: to sustain their claims. And this is another example, as
23:21
Speaker 2: you mentioned earlier, of all kinds of courts at the
23:25
Speaker 2: appellate level ruling in different ways. There again, is there
23:29
Speaker 2: very much a circuit split on this question of whether
23:33
Speaker 2: there really needs to be this additional factor proven by
23:37
Speaker 2: the plaintiff if they are a member of a majority group.
23:40
Speaker 1: How do you think the Supreme Court, without hearing the
23:43
Speaker 1: oral arguments, are seeing the briefing, do you have a feel.
23:46
Speaker 2: For how they Yeah, My feel is that this is
23:49
Speaker 2: the next shoe. I don't think it's going to be
23:51
Speaker 2: the last shoe, but this is the next shoe falling
23:54
Speaker 2: in the affirmative action changes that have begun already at
23:59
Speaker 2: the Supreme Court level, which we saw last year in
24:01
Speaker 2: twenty twenty three with respect to college admissions. Everybody who
24:06
Speaker 2: does represent employers and employees in the employment bar throughout
24:10
Speaker 2: the United States is waiting for the US Supreme Court
24:13
Speaker 2: to take further action with respect to both affirmative action
24:17
Speaker 2: in the workplace and now in this case, discrimination claims
24:21
Speaker 2: in the workplace. And my suspicion is that there will
24:24
Speaker 2: be a split in the Supreme Court, and I suspect
24:27
Speaker 2: it will be probably either a six y three or
24:28
Speaker 2: a five to four, depending on the Chief Justice rules
24:31
Speaker 2: in favor of abandoning the background circumstances test and saying,
24:37
Speaker 2: as some circuits have said, and indeed, as one of
24:40
Speaker 2: the concurring judges said in this case, that discrimination is discrimination,
24:45
Speaker 2: and if a white employee, or a male employee, or
24:48
Speaker 2: anybody who's member of a quote majority group is discriminated
24:51
Speaker 2: against on the basis of their being a part of
24:54
Speaker 2: that group, they have a right to proceed with an
24:58
Speaker 2: anti discrimination claim irrespective of whether they have these so
25:02
Speaker 2: called background circumstances, in addition to the other things that
25:06
Speaker 2: a member of a minority group would have to show.
25:09
Speaker 1: I agree with you one hundred percent, and I am
25:12
Speaker 1: going to play this when we get the decision, we'll
25:15
Speaker 1: see if it's six.
25:16
Speaker 2: To three, I mean, if past is prologue, I suppose
25:19
Speaker 2: then we have a pretty good idea of what's going
25:21
Speaker 2: to happen.
25:22
Speaker 1: We really do. Thanks so much, Tony for giving us
25:25
Speaker 1: this preview of the term. That's Anthony Oncidi of Proskauer
25:29
Speaker 1: coming up next, TikTok gets sued again. This is Bloomberg.
25:35
Speaker 1: More than a dozen states and the District of Columbia
25:38
Speaker 1: sued TikTok this week, saying the popular short term video
25:43
Speaker 1: app is designed to be addictive to kids and harms
25:46
Speaker 1: their mental health. The lawsuits stem from a national investigation
25:50
Speaker 1: into TikTok launched in March of twenty twenty two by
25:54
Speaker 1: a bipartisan coalition of attorneys general. The lawsuits claim that
25:59
Speaker 1: TikTok design features that addict children to the platform, such
26:04
Speaker 1: as the ability to scroll endlessly through content, push notifications
26:08
Speaker 1: that come with built in buzzes, and face filters that
26:12
Speaker 1: create unattainable appearances for users. A TikTok spokesman said they
26:17
Speaker 1: strongly disagree with the claims, many of which they believed
26:21
Speaker 1: to be inaccurate and misleading. Joining me is Eric Goldman,
26:25
Speaker 1: a professor at Santa Clara University Law School and co
26:29
Speaker 1: director of the school's High Tech Law Institute. What are
26:32
Speaker 1: the claims here against TikTok?
26:34
Speaker 3: State's trains General are taking a position that TikTok has
26:38
Speaker 3: designed its service in a way that hurts its users,
26:42
Speaker 3: and that its design is both legally problematic, as well
26:46
Speaker 3: as its failure to disclose some of the information it
26:49
Speaker 3: had was also problematic.
26:52
Speaker 1: The California Attorney General Rob Bonta said that California's investigation
26:58
Speaker 1: found that TikTok offers unique safety features for users in
27:02
Speaker 1: China that are not available to users in the US,
27:06
Speaker 1: including usage time limits. But I thought there were default
27:10
Speaker 1: screen time limits and other different safeguards that they've introduced.
27:15
Speaker 3: To mean that observation is frankly irrelevant. Every service customizes
27:20
Speaker 3: for local conditions, whether that's because the users have different
27:24
Speaker 3: needs or because the law is different. For example, in
27:28
Speaker 3: other countries they don't have the First Amendment, and so
27:31
Speaker 3: service in the US just routinely look different than they
27:34
Speaker 3: do in other parts of the world.
27:35
Speaker 1: Washington's lawsuit accused TikTok of facilitating sexual exploitation of underage users,
27:42
Speaker 1: saying TikTok's live streaming and virtual currency operate like a
27:46
Speaker 1: virtual strip club with no age restrictions. Is that the
27:51
Speaker 1: use of exaggeration to show a point or can they
27:55
Speaker 1: prove that?
27:57
Speaker 3: Certainly, any efforts to engage in sexual predation on any
28:01
Speaker 3: site is troubling, and I wish that didn't occur. I
28:04
Speaker 3: wish that wasn't part of the human condition. However, it's
28:07
Speaker 3: easy enough for the regulators to point to specific actions
28:12
Speaker 3: that they don't like, but it's harder to talk about
28:14
Speaker 3: how TikTok might design a service that would prevent those
28:18
Speaker 3: actions from ever taking place, and some of the solutions
28:22
Speaker 3: that might prevent it would have other collateral damage that
28:25
Speaker 3: could to materially degrade the service for everybody, or make
28:29
Speaker 3: it impossible for anyone to talk to each other, And
28:32
Speaker 3: so it's not really super insightful to talk about the
28:37
Speaker 3: virtual crime scene without contemplating the overall ecosystem.
28:42
Speaker 1: Are these suits under different states consumer protection laws?
28:47
Speaker 3: That's my understanding. So each s they filed its own complaint,
28:50
Speaker 3: and each complaint that would have referenced its local statutes
28:54
Speaker 3: as part of the allegations, so it's.
28:56
Speaker 1: Not one class action lawsuit.
28:59
Speaker 3: Well have to be a class action lawsuit for it
29:01
Speaker 3: to be consolidated. So over forty state attorney generals are
29:05
Speaker 3: coordinating their efforts in a single challenge against Facebook, But
29:10
Speaker 3: in this case, for reasons that are unclear to me,
29:13
Speaker 3: each state is doing their own thing, but obviously they're
29:16
Speaker 3: coordinated as well. But each state is incurring significantly higher
29:20
Speaker 3: enforcement costs than if they were to combine their resources.
29:23
Speaker 1: Do you think that this is a strong lawsuit?
29:26
Speaker 3: The short answers, we don't know how strong these lawsuits
29:29
Speaker 3: are because none of the similar lawsuits have reached a
29:34
Speaker 3: final resolution that answers the key legal questions. There have
29:38
Speaker 3: been many challenges in many different venues against social media
29:43
Speaker 3: services for a variety of alleged misdeeds, and many of
29:47
Speaker 3: us are still working through the court system waiting appeal
29:50
Speaker 3: or additional review by higher courts. And until we hear
29:54
Speaker 3: from the higher courts, the data is noisy. We can't
29:58
Speaker 3: really tell where the line is today legally, and so
30:01
Speaker 3: it's hard to judge the efficacy of these particular suits
30:04
Speaker 3: until we get additional data from the appellate courts.
30:07
Speaker 1: I feel like another day, another lawsuit against TikTok. Is
30:11
Speaker 1: there a point in this sort of piling on? It
30:14
Speaker 1: seems like there are many many lawsuits against TikTok already.
30:18
Speaker 3: It's a great point, and I would take it one
30:19
Speaker 3: step further. California recently passed the law that was designed
30:23
Speaker 3: to target alleged addiction of users by the social media
30:27
Speaker 3: that won't go into effect for a few years. California's
30:30
Speaker 3: involvement in this particular enforced action is basically trying to
30:33
Speaker 3: move up the time period of that law before when
30:36
Speaker 3: the legislature thinks that the community is ready for it.
30:38
Speaker 3: So basically Bonta is jumping the gun on a statute
30:42
Speaker 3: that's designed to accomplish the exact same goals, which is
30:45
Speaker 3: an unusual and somewhat troubling allocation of prosecutorial resources. Why
30:51
Speaker 3: not wait until the statue comes in ef fact that
30:53
Speaker 3: the legislature is carefully crafted and it believes requires some
30:57
Speaker 3: compliance time to go into effect. Having said that, you know,
31:00
Speaker 3: I think that all of the lawsuits and the statutes
31:03
Speaker 3: are going to be sort of substantial criticism when they
31:06
Speaker 3: go up on appeal, and so nobody really knows the laws,
31:09
Speaker 3: and I'm the investment in new lawsuits without uncertainty is
31:14
Speaker 3: just in a sense, piling on.
31:15
Speaker 1: As TikTok spokesperson pointed to the safeguards that were introduced
31:19
Speaker 1: by the company, including default screen time limits, family pairing,
31:23
Speaker 1: and privacy defaults for minors under sixteen, Do you see
31:27
Speaker 1: that as their defense or might they have another defense?
31:30
Speaker 3: It's impossible to talk about a defense until we understand
31:33
Speaker 3: precisely what problem the state ages are concerned about, and
31:38
Speaker 3: for all of the negativity they introduce, it's not entirely
31:42
Speaker 3: clear that we can precisely identify the problem and the
31:46
Speaker 3: solution that would ameliorate that problem. So, for example, when
31:50
Speaker 3: we talk about this concept of addiction that's not necessarily
31:53
Speaker 3: in a clinical sense, that might be more of a
31:56
Speaker 3: lay term, and so we don't really have a scientifically
32:01
Speaker 3: authorized protocol for how to deal with the clinical condition
32:06
Speaker 3: of social media addiction. So in that sense, everyone's kind
32:09
Speaker 3: of guessing at what actually will help and what troubles
32:14
Speaker 3: means when the state decides to put its finger on
32:17
Speaker 3: the scale of those guesses and say we're going to
32:20
Speaker 3: side for you, with no clinical evidence to back us up,
32:23
Speaker 3: and then no consideration for how the solution might actually
32:27
Speaker 3: not solve the problem or actually might make things worse.
32:30
Speaker 1: So the FTC sued TikTok in August for violating the
32:34
Speaker 1: federal Children's Privacy Law. Is that a different kind of
32:39
Speaker 1: suit than this or are they all based on the
32:41
Speaker 1: same sort of allegations?
32:45
Speaker 3: All of them derived from a core impulse, which is
32:48
Speaker 3: that the governments decided that it wants to determine how
32:52
Speaker 3: social services should operate. It's tired of letting services negotiate
32:57
Speaker 3: that directly with their audience. So whether it's framed as
33:00
Speaker 3: a privacy lawsuit or an addiction targeting lawsuit, or a
33:04
Speaker 3: statute that designed to hard code specific operational practices, they're
33:09
Speaker 3: all reflecting this basic underlying impulse that the government's taking
33:14
Speaker 3: over here, and they're going to decide for everyone.
33:17
Speaker 1: I mean, they might have waited to see if TikTok
33:19
Speaker 1: is even in existence in a few years. What's happening
33:22
Speaker 1: with TikTok battling the US law that could ban.
33:26
Speaker 3: The app Congress enacted the law earlier this year that
33:29
Speaker 3: forces TikTok to change its ownership structure and failing that,
33:34
Speaker 3: to be kicked out of the US market entirely. And
33:37
Speaker 3: I still find people who have no idea that Congress
33:39
Speaker 3: has literally banned TikTok. It's really a shocking development when
33:44
Speaker 3: people think about it. Everyone, including Congress, contemplated that the
33:47
Speaker 3: law would be subject to a legal challenge. That legal
33:50
Speaker 3: challenge is currently pending with the DC Circuit Court of Appeals,
33:54
Speaker 3: But the real action is going to come from the
33:55
Speaker 3: Supreme Court. Whatever the DC Circuit says is going to
33:58
Speaker 3: go to the Supreme Court and then we're going to
34:00
Speaker 3: get more of our answer. So until we hear for
34:03
Speaker 3: the Supreme Court, everything is pretty speculative.
34:05
Speaker 1: The oral arguments at the DC Circuit didn't seem to
34:09
Speaker 1: be leaning in TikTok's favor.
34:12
Speaker 3: Whatever the DC Circuit opinion says will be of interest,
34:17
Speaker 3: but it's going to be subject to review by the
34:19
Speaker 3: Supreme Court. So I've not invested a lot of emotional
34:22
Speaker 3: energy and the possibility that they're going to do something weird,
34:26
Speaker 3: because it really doesn't matter. They're just warming up act
34:30
Speaker 3: before the Supreme Court, you know, they're like the opening
34:32
Speaker 3: knack to the main scene.
34:34
Speaker 1: And what about the lawsuits by private plaintiffs in California
34:39
Speaker 1: federal and state court, So.
34:41
Speaker 3: That battle is well ahead of this battle, and so
34:44
Speaker 3: it's entirely likely that we're going to get answers from
34:47
Speaker 3: that court case that will influence this one. And again
34:50
Speaker 3: raises the consideration that maybe the AGS pulled the trigger
34:53
Speaker 3: a little bit early. They didn't wait to see what
34:56
Speaker 3: happened with those cases and didn't then iterate based on
34:59
Speaker 3: the less from those cases. They're basically replicating the same
35:02
Speaker 3: claims that have been made elsewhere. So there's an enormous
35:06
Speaker 3: sense of deja vous about this particular stive enforcement actions.
35:09
Speaker 1: There certainly is. Thanks so much, Eric. That's Professor Eric
35:12
Speaker 1: Goleman of Santa Clara University School of Law. And that's
35:16
Speaker 1: it for this edition of the Bloomberg Law Podcast. Remember
35:19
Speaker 1: you can always get the latest legal news by subscribing
35:22
Speaker 1: and listening to the show on Apple Podcasts, Spotify, and
35:25
Speaker 1: at Bloomberg dot com, slash podcast, Slash Law. I'm June
35:29
Speaker 1: Grosso and this is Bloomberg