This transcript has been auto-generated using Adobe Premier Pro.
00;00;02;22 - 00;00;38;01
Tom Godar
Hello and welcome to the Husch Blackwell Labor Law Insider Podcast. I'm Tom Godar your host and I'm glad that you've come along in this podcast. We welcome guests with practical expertise and experience regarding labor law issues, and they share their insights related to this ever changing area. The breadth of developments in laws related to unions and individual workers rights that we are experiencing under the Biden appointed National Labor Relations Board and led by General Counsel Jennifer Abruzzo is unprecedented.
00;00;38;19 - 00;01;06;22
Tom Godar
These developments demand that employers and those giving counsel to organizations stay tuned into these changes and make necessary adjustments to their practices and policies. When President Biden was elected, he promised to have the most union friendly administration ever, and he is fulfilling that pledge. So buckle up and hang on for this wild and wonderful ride in the world of labor law.
00;01;07;02 - 00;01;28;17
Tom Godar
It is so great to have you join us once again for the labor law insider. And I am excited, more excited than I've been for a couple of these broadcast. No disrespect to other guests, but we're going to talk about where labor law, employment law meets higher education. And we have such a great panel to help us talk through these issues.
00;01;28;17 - 00;01;54;03
Tom Godar
It's really going to be fun. I have with me Tyler Paetkau has joined us occasionally on the Labor Law Insider. Tyler is practicing out in the Bay Area of California. And in spite of being in California, he graduated twice from the University of Michigan. Tyler once wasn't enough. Come on, go. Big blue. Too big, too big. But I understand you're an internationally recognized citizen.
00;01;54;04 - 00;01;55;24
Tom Godar
Tell me a little bit about that, Tyler.
00;01;56;15 - 00;02;14;14
Tyler Paetkau
Well, I am Canadian, natural born. So yesterday was the NHL draft. I was a little bit distracted. I've been in the U.S. since I was two, so I feel like an adopted American. And through marriage, I am also now a French citizen. So there you go. I didn't have to renounce any of them.
00;02;14;14 - 00;02;39;24
Tom Godar
Well, tomorrow on my flagpole, I will be flying a Canadian flag in honor of our Canada Day. We have connections and dear friends up in Canada. So welcome. Tyler, it's great to have you in. And I have Jason Montgomery with me as well. Jason's one of our Husch Blackwell attorneys and he practices in our Kansas City office. He's a University of Kansas grad.
00;02;39;24 - 00;02;48;07
Tom Godar
And he hasn't been in any little submarines going 12,000 feet under the ocean. But you do spend your time under the ocean occasionally, don't you, Jason?
00;02;48;12 - 00;03;02;01
Jason Montgomer
No, that's that's right. I'm not daring enough to go that that far down. I only go 100 feet. I'm a recreational diver from time to time and enjoy low level exploration.
00;03;02;16 - 00;03;09;09
Tom Godar
So I understand that there's there's wildlife down there and some of the wildlife that you encounter are sharks, is that right?
00;03;09;14 - 00;03;34;07
Jason Montgomer
Yeah. The last time I went diving, I actually dove with some sharks. So I felt right at home as as an attorney that I was swimming with the sharks like I do every day in my regular day to day work. But in all seriousness, it was exciting and and we were certainly at a safe distance, like I like to stay away from for most attorneys.
00;03;34;15 - 00;04;05;18
Tom Godar
We started our discussion about having a special session for the Labor Law Insider, dealing with higher education issues. Weeks and weeks ago. And so Fortune would have it for us. We have some really breaking news out of the Supreme Court regarding higher education issues. We've got Borden versus Nebraska alone, which says that we are not going to under the administration's action for give student loans.
00;04;05;22 - 00;04;29;27
Tom Godar
There might be other solutions to that problem if indeed it is a problem. And then we also have the question regarding affirmative action on campus with perhaps broader implications, at least some leaders have suggested there may be. That's the Students for Fair Admission vs.Harvard College. And I think the University of North Carolina was already engaged as part of that decision.
00;04;30;09 - 00;04;42;02
Tom Godar
Really interesting read if you haven't had a chance to read it, but Jason, why don't we start with you? Tell us a little bit about well, pick one of those two topics. Which one you want to lead on for us?
00;04;42;20 - 00;05;08;00
Jason Montgomer
Well, I'll lead on on the one that I think is getting the most attention, which is the race based admissions set of cases. And the court really held that that race conscious admissions at Harvard University in North Carolina violated the Equal Equal Protection Clause of the 14th Amendment and the reasoning of the court in this particular case likely forecloses or does foreclose similar programs at other institutions.
00;05;09;07 - 00;05;37;28
Jason Montgomer
Essentially, the court said that eliminating racial discrimination means eliminating all of it, and that includes any sort of sort of system that would take into specific account an individual's race, race or a component of that in their admission. Now, the big piece of this, a couple of things have happened immediately. One, many of our clients and institutions around the country have said, hey, we value diversity, equity, inclusion in our campuses.
00;05;37;29 - 00;06;12;15
Jason Montgomer
We are going continue to look for opportune cities to have a diverse student body. So what practicality that means is there needs to be other ways to do that than what they have traditionally done, which is sometimes the use of proxies, you know, for race. What the court did say in its opinion is that this opinion shouldn't be construed to prohibit universities from considering an applicant's discussion of how race affected their life through discrimination, inspiration or otherwise.
00;06;12;29 - 00;06;28;24
Jason Montgomer
And so that means it's going to take more effort on the part of institutions in order to ensure a diverse student body. But it's also going to take some work to reevaluate all their admissions policies and procedures.
00;06;28;28 - 00;06;44;16
Tom Godar
So that's going to keep you busy with your portfolio of colleges and universities. Is that going to affect your public sector clients and our public sector clients and those who are at the University of Wisconsin? I'm a Wisconsin lawyer.
00;06;44;24 - 00;07;03;04
Jason Montgomer
Yeah, it affects, you know, really applies to both public and private institutions. So public institutions through the 14th Amendment, private institutions through the application of the Higher Education Act and the Equal Protection Clause. And so it's going to affect all institutions of higher learning.
00;07;03;14 - 00;07;21;13
Tom Godar
Hey, Tyler, you've spent much of your time looking at items from the private sector standpoint, not necessarily higher education, although that's an area in which you have a good deal of experience as well. What's the broader implication, if any, of this recent Supreme Court decision on race based admissions?
00;07;22;03 - 00;08;07;10
Tyler Paetkau
Well, I agree with Jason. The jury's still out. Especially for private employers. This you know, Harvard obviously is not a public institution. But the because of the 14th Amendment, they still found that it this particular admissions program was unconstitutional. You know, the devil's in the details here, Gates in as the expert. But reading the decision, the court seemed to be troubled by the idea that educational benefits or interest that the schools use to justify race based admissions or race conscious admissions, no matter how laudable, were too vague to ever be meaningfully evaluated by courts and that kind of gives a license to lawyers to go back to the drawing board.
00;08;07;10 - 00;08;23;15
Tyler Paetkau
And I'll be interested to see how schools and private employers react to the decision and try to come up with ways to I don't want to say work around it, but to still consider race in hiring decisions and admissions.
00;08;24;16 - 00;08;26;21
Tom Godar
This was a63 decision. Was it a case?
00;08;27;11 - 00;08;27;27
Tyler Paetkau
Yes.
00;08;28;02 - 00;08;52;06
Tom Godar
And I think the other two the other decision we're talking about the board versus Nebraska alone was also six three. I've read some of the both. There's obviously a decision by the majority, but also concurrence by Justice Thomas and really spirited dissent. So I'm not going to go deeply into the social aspects of this, but those of our listeners who are interested, take a look at the decision.
00;08;52;06 - 00;09;26;18
Tom Godar
Really brilliant men and women who have different life experiences and different attitudes about how the law affects society come out swinging on this. Things are really a fascinating decision. Less fascinating, I think, Tyler, but still interesting because I love administrative procedure and the balance of power between the various branches of government is the board and versus Nebraska lone case, the case that says no, those students who were receiving loans, who had $10,000 or up to $10,000, if I recall, per person, they're not at least today going to have those loans forgiven.
00;09;26;19 - 00;09;28;02
Tom Godar
Tell us a little bit about that, Tyler.
00;09;28;12 - 00;09;56;12
Tyler Paetkau
So I think that is another Constitution based decision has to do with the power of Congress over the purse. And essentially the court ruled that this was a decision for Congress to make. And it's interesting that they also cited Speaker Pelosi's comment that President Biden did not have the unilateral authority to forgive student loan back debt, and the court cited that in its opinion.
00;09;56;26 - 00;10;15;05
Tyler Paetkau
So I know there's been some suggestions that there's a better way to do it and there's a new avenue Jason can speak to. But a lot of the critics say, well, if it was a good avenue now, why wasn't it before? And why did you pursue this for, you know, two years of litigation and not use the the easier avenue?
00;10;15;16 - 00;10;17;20
Tyler Paetkau
So that'll be interesting to see how that plays out.
00;10;18;01 - 00;10;28;29
Tom Godar
Yeah. Jason, what is this other avenue that Tyler was alluding to that might still be out there without a brand new law or once again weighing in sort of administrative action versus congressional action?
00;10;29;12 - 00;10;53;19
Jason Montgomer
It's a great question. And what I would I think what I understand this to be is, again, the use of the Department of Education and the Higher Education Act in some capacity provides some authority, especially when there is a loan program that's under the the direction of the Department of Education. And so that's the angle that they're going to use, the specific provisions.
00;10;53;19 - 00;11;10;02
Jason Montgomer
I'm not sure what exactly they're going to cite. But to Tyler's point, I think a lot of smart commentators and individuals have said if this really was the right way to go, why wasn't that done from the beginning? And that's going to be the question they'll have to ultimately answer.
00;11;10;25 - 00;11;28;17
Tom Godar
Jason, as long as you have the mic right now, let me ask you to lead really into the area that we thought we were going to talk about for our entire time together. And that is sort of what's happening in the nexus between higher education, whether public or private sector and labor and employment issues. What are we seeing out there?
00;11;28;17 - 00;11;31;27
Tom Godar
What give us a couple of things that we can talk about for the next several minutes.
00;11;32;22 - 00;12;05;23
Jason Montgomer
Yeah, well, I mean, the one that I am involved in the most or at least hear about the most is the relationship of student athletes who have traditionally been an entity, a group that has not been considered employees and their institution. And whether or not, at least at the most elite levels, the compensation packages that are going to student athletes are really representative of the of what they're earning or have the ability to earn the open market.
00;12;06;06 - 00;12;41;17
Jason Montgomer
And and the the real issue is a couple a twofold. One, is there any good way for them to organize? Can they organize similar to, you know, what, you know, student you know, adjunct teachers and faculty have done in the past or are they so different than other groups out of the university that they require a special classification and cannot unionize or engage in, you know, collective bargaining like other groups of faculty or others can have institutions?
00;12;42;02 - 00;13;02;03
Tom Godar
I've always thought that the elite institutions, that is the elite athletic institutions, you have all of the NFL draft picks, all the NBA draft picks. They ought to be getting a bunch of money from the NFL or the NBA as a training center. But apparently that's not happening too much either. Hey, Tyler, tell me a little bit about this idea of organizing.
00;13;02;03 - 00;13;04;12
Tom Godar
If you're an athlete, what's going on on that side of the world?
00;13;05;12 - 00;13;36;21
Tyler Paetkau
So this is along the lines of predictions that Tom and the labor law insider has been bad, been making for months now, maybe years. And that is the new general counsel, Jennifer Abruzzo, has adopted a very aggressive, pro-union agenda and has come out with a number of opinions, some of which were surprising to us as practitioners, most recently basically outlawing posted employment non-compete for all employees covered by the ACT.
00;13;36;22 - 00;14;00;23
Tyler Paetkau
That is, rank and file employees. No more non-compete. And then there was another opinion on it actually board decision by McLaren McComb Hospital that put the kibosh to pretty standard confidentiality provisions that we all use and severance agreements and handbooks and proprietary information and invention assignment agreements. So we're going back to the drawing board on that stuff.
00;14;00;23 - 00;14;10;02
Tom Godar
Isn't it great that that GCA Russo could actually surprise, as we predicted, about 85%? And then there are a few things that just, you know, she was swinging for the fences on this.
00;14;10;15 - 00;14;32;28
Tyler Paetkau
Yeah. And I would say on the student athlete piece, that's not so new. We have a fairly few year old now Northwestern University case, an effort to organize the Division one student athletes. There has been a couple of advice memos I would encourage the listeners to get on the NLRB's website, and there's a couple of that I just mentioned briefly.
00;14;32;28 - 00;15;14;20
Tyler Paetkau
One deals with the more recent, one is general counsel advised Memo 2108 which deals with statutory rights of players at academic institutions, student athletes under the National Labor Relations Act. You know, what's interesting is that this effort to organize student athletes has been going on for a while. The new twist is in the most recent iteration on the board in Los Angeles, Region 31 and on May 8th filed an unfair labor practice charge against USC and also joined as respondents the NCAA A and the PAC 12 conference as joint employers.
00;15;15;03 - 00;15;38;27
Tyler Paetkau
And that's the game changer. You know, we were thinking about advising school clients on the traditional, you know, is this an employee? And there are some arguments as to why they're not employees. But now we're dealing with a whole nother set of challenges, which is joint employment. That's another one of general counsel. Bruce's items on our agenda is joint employment.
00;15;38;27 - 00;15;42;14
Tyler Paetkau
So we're seeing it everywhere. And this is just the latest example.
00;15;43;03 - 00;16;01;12
Tom Godar
How is that playing on the campuses, Jason? What kind of advice are you being sought or what's the thought about? How do we sort of prepare if we need to prepare at all for the student athlete? The Conference And you're involved in NCAA athletics at the highest level with many of your clients, what's the buzz?
00;16;02;05 - 00;16;40;14
Jason Montgomer
Yeah, I think it's it's important to step back and kind of identify what's happened even in the last three years in college athletics that has resulted in, you know, the the general counsel, the NLRB, Brousseau, taking some of these positions aggressively in the in their college athletes space. So the first significant issue that dropped was NCAA versus Alston, which was a class action antitrust case that essentially said that certain educational benefits cannot be artificially restricted by the NCAA, that it was a violation of antitrust law.
00;16;40;26 - 00;17;07;09
Jason Montgomer
And and that opened up the NCAA to provide what has been called NCAA institutions to provide what's called Alston benefits, which is an additional $5,980 for academic achievement. So you have athletes who now receive at the highest level of the full cost of attendance to go to schools, a room, board, tuition and whatever the cost of attendance is.
00;17;07;18 - 00;17;35;20
Jason Montgomer
Plus, now the ability to get this extra $5,000. And then not long after the the Alston ruling, the NCAA deregulated its name, image, likeness laws for allowing athletes to receive compensation from third parties, not from institutions, but from third parties. So now you have athletes airing into commercial agreements with third parties and making money off of their abilities, their reputation as an athlete.
00;17;36;02 - 00;18;06;19
Jason Montgomer
So all of these things are driving closer to looking like the athletes, especially at the highest level, are more like employees then like your typical student. And that is has created quite a lot of issues for college campuses and a really a reckoning of understanding how they're going to deal with these employment issues. The first step that they have taken as a collective NCAA is to go to Congress and ask Congress to fix their problems.
00;18;06;27 - 00;18;31;29
Jason Montgomer
There's not many associations or entities that will go to the federal government and say, can you fix my industry? So that's a bold statement as to where they're at to say they want. And as part of that, they want Congress to say student athletes are not employees. So they want that written in the legislation, which would, you know, theoretically prohibit the type of actions that are going on right now in in California.
00;18;32;08 - 00;18;36;09
Jason Montgomer
So I'm going to pause there. I think that kind of sets the stage for where we're at.
00;18;36;23 - 00;19;00;14
Tom Godar
And a pause it shall be for this, our first part of the Labor Law Insider podcast regarding the nexus between higher education, labor and employment law and a sort of bonus on two Supreme Court cases that just came down the pike. So join us for part two, which we'll put out in another ten days or two weeks. But thank you so much for being part of the Labor Law Insider gang.
00;19;00;26 - 00;19;13;29
Tom Godar
We really appreciate your listening in to our podcast and share with your friends and your colleagues if this is of interest to them. Take care and we'll be with you soon with the Labor Law Insider. Thanks.