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Lafe Solomon ponders attacks on NLRB, flack from employers over agency directives

May 24th, 2013  |  Lisa Milam-Perez  |  Add a Comment

“The NLRB is truly at an unprecedented place in its history; we’re being attacked politically, judicially, and legislatively,” said NLRB Acting General Counsel Lafe Solomon, speaking on Monday, May 20, at a plenary session of the Minnesota CLE’s Upper Midwest Employment Law Institute. The House passed a bill defunding the agency until the recess appointments issue is resolved. (A similar measure was introduced, with weaker prospects, in the Senate.) The House also passed a $50 million cut in the NLRB budget—on top of sequestration. Though chagrined by the onslaught, Solomon told the audience that the agency “will be conducting business as usual, even while fending off these attacks.”

As general counsel, Solomon serves under the Federal Vacancies Act, so the D.C. Circuit’s Noel Canning v NLRB decision invalidating President Obama’s recess appointments to the NLRB does not directly impact him (except for when he seeks injunctive relief in district court based on the Board’s delegated authority). Rather, “the most serious challenge is that when I issue a complaint, it’s obviously based on Board law, and people are attacking the law on which I base the complaint.” Exacerbating matters, of course, is the fact that there is no time limit for seeking to overturn a Board decision as invalid and that Board rulings are not self-enforcing.

“There are some very important decisions being challenged on the basis that the Board was invalid,” Solomon said. “There are interesting tangential, collateral attacks on us judicially. Some employers are going into the D.C. Circuit court seeking writs of mandamus against us. It’s unprecedented.”

Nonunion workers. In a subsequent conference session, Solomon delved more deeply into the agency’s substantive rulings and policy positions that have generated such alarm among employers, including nonunion companies that had assumed they were well outside the Board’s reach.

“I am often accused of applying the NLRB to the nonunion workforce in a novel way,” Solomon said. But, he pointed out, the notion of nonunion workers banding together to seek improvements in terms and conditions of employment “was embedded in the Act in 1935, and all Boards and GCs have enforced the law against nonunion employers… I would argue that the current Board and I have not done anything novel or unprecedented.”

Social media. On the other hand, Solomon noted, “I’ll be the first to acknowledge that when I issued a complaint in 2010 about a Facebook complaint, the world as I knew it changed.” He was alluding to the social media disputes taken up in recent years and his GC memos outlining his conclusions as to the lawfulness of various social media policies under the NLRA. “For us, it was a fairly straightforward application of the Act, although in a new context.”

Noting that “I have tried to be as transparent about my thinking as possible” by issuing memoranda, Solomon stressed that “not all social media conversations are going to be unlawful under the NLRA.” Specific evidence of concerted activity—before, during, or after the social media interaction—is needed. “The Board has never protected mere griping. You can also lose the protection of the Act even if there is concerted activity,” he continued. Solomon cited, for example, the case of a bartender who stated on Facebook that the bar watered down its drinks, that its customers were “rednecks,” and that he hoped they “choked on glass” on the way home. “We did not issue a complaint.”

As for enforcement activity regarding employers’ social media policies, Solomon said that he talks to HR groups regularly, where he found some concession to the fact that employers may have overplayed their hand in this area. “There was an admission early on that a lot of these policies were written very over-broadly and not with any consideration of the NLRA.”

“We try to look at these policies and the way that a worker would interpret them, and whether they would interfere with their rights under Section 7. We have issued complaints over some of these policies and some of them were found to be lawful.” He cited, for example, social media policies promulgated by Wal-Mart and Cox Communications.

“The safest way for employers to deal with it, from our perspective, is to give examples of what you can do and cannot do,” Solomon advised. A safe harbor clause articulating that the policy is not intended to interfere with rights under the Act is also advisable. On the other hand, he said, “a savings clause won’t work if you have all of these prohibitions for two or three pages and then at the end you reference Section 7 but don’t identify what Section 7 is.”

Trying to place the Board’s enforcement activity in this area in its proper context, Solomon reminded attendees more than once that “the NLRB does not solicit any charges; we only act on what complaints are filed with the office.” He also stressed the social media policy provisions that have passed muster, adding, “If I say there won’t be a complaint issued if you have a certain provision in a social media policy, you can take that to the bank. There won’t be a complaint issued for as long as I’m acting general counsel.”

At any rate, Solomon noted, the focus of social media policies has now shifted to the Board itself, which has begun to issue decisions on this issue. “I would interpret most of them as supportive of the same theories” that the GC’s office has espoused, Solomon said.

At-will employment. More recently, a dust-up arose over concerns that the agency was levying an attack on at-will employment clauses. The controversy erupted when one regional director filed two cases taking the position that specific at-will provisions violated Section 7 rights. In one case, the regional director construed the provision to mean that employees were required to waive their right to be anything other than an at-will employee.

“The at-will issue was interesting for me,” Solomon said, who was caught by surprise. “I do a lot of public speaking and I started going to conferences and people began attacking me for calling at-will employment statements unlawful.” So he issued a directive to regional directors that any “at-will” cases were to be vetted through the GC’s office to determine how to proceed. “Obviously, 93 percent of companies in the United States have at-will provisions! I wanted to make sure that we were doing something that we could defend, that made sense.”

Ultimately, Solomon issued a memorandum on four different at-will provisions. “In each of these, I said the provisions were lawful, and I refused to issue a complaint. It gives you four examples where you can rest assured, if you have a provision that is similar, there won’t be a complaint issued.”

Confidentiality. Employers’ concerns of late have focused on a Board holding that maintaining a blanket confidentiality rule, even as applied to internal workplace investigations, can unlawfully interfere with employees’ Section 7 rights. How can employers balance their obligations to avoid or investigate harassment (and other concerns), Solomon was asked.

“We are cognizant of the fact that there are legitimate business interests at stake,” he replied. “But you should identify what those business interests are. You have an obligation to have a harassment-free workplace. You need to protect proprietary information. You should write the confidentiality policy to specifically protect those interests that you need to protect, and not go further.”

“I don’t say this flippantly,” he continued, “but it is a price of doing business in this country that there are protections for workers’ rights.”

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Excessive lawyering irritates court and results in substantial fee reduction

May 22nd, 2013  |  Lorene Park  |  Add a Comment

When courts start getting creative in their use of adjectives (sometimes letting normally cool, detached writing styles slip for the briefest of moments), it can be a sign that an attorney has pushed the limits of procedural rules or decorum, if not entirely ignored them. Many instances of such creative judicial writing show up in response to motions to compel discovery, but my personal favorites often involve requests for attorney’s fees, which invite courts to inspect attorney behavior.

Excessive lawyering. For example, in Cox v Council for Developmental Disabilities, Inc (No. CIV-12-0183-HE, 2013), a federal court in Oklahoma found a $145,148 fee request in a “heavily lawyered” employment discrimination case that netted a mere $2,984 in damages to be “divorced from reality.” The employee’s gender-based hostile work environment claim failed on summary judgment and only her retaliation claim went to the jury. Although her attorneys’ hourly rates were reasonable, the extent to which the case was “lawyered” was problematic to the court. Virtually all tasks involved substantial involvement by at least two attorneys but lawyers who justify their hourly rates “should be experienced enough that substantial review and revision by other attorneys is unnecessary.”

Further, multiple attorneys reviewed the same routine filings or orders, spent substantial time in interoffice conferences between counsel, and billed the smallest available time increment. A single email between counsel, no matter how insignificant, cost at least $40. Significantly, two attorneys handled all pretrial proceedings, including discovery, but a third attorney prepared the summary judgment response, requiring 30 hours to become familiar with discovery to date. “The cost of such duplication should not be shifted to the opposing party,” the court averred.

To reflect the excess time, the court reduced the lodestar amount to $101,603. In addition, a further reduction was warranted because the employee’s recovery was “pretty close” to nominal and far less than she sought. Moreover, the time spent by her attorneys on post-judgment motions (as to interest and attorneys’ fees) merited a further reduction. To the court, the “minuscule amounts of interest at issue—the amount sought by the current motion would barely purchase a 16oz soda—make plaintiff’s motion essentially useless for any purpose other than increasing attorneys fees.” Accounting for these excesses, the court awarded $29,000 in attorneys’ fees; much less than the $145,148 sought.

Pomposity. A personal favorite comes from a federal court in Texas (as many of my favorites do). In Ransom v M. Patel Enterprises, Inc, an FLSA suit, the court found “pomposity” in defense counsel from a city firm arguing that employees’ counsel should be awarded less in fees because he had a small rural office with lower overhead (No. A-10-CA-857, 2012). The defendants argued the court should award less than the requested $325 hourly rate because their two attorneys only charged $250 and $255. Disagreeing, the court noted that the employee’s attorney was a specialist in employment law and experienced in litigation, whereas defense counsel could claim only one of those qualifications. The court was unswayed (though maybe annoyed) by the defense arguing that its firm, which is “in a downtown high rise two blocks from the federal courthouse,” has higher overhead but charges less. Setting aside “the pomposity of this argument,” the court explained that overhead costs were not a consideration.

The court also found several of the defendants’ remaining arguments “ridiculous” and “preposterous” where they complained about the additional fees incurred after failed settlement discussions and argued that every single dollar of fees expended after they made a settlement offer was spent in pursuit of damages. In the end, the court awarded $331,880 in attorneys’ fees. The court did not find this disproportionate to the judgment for $135,036 in unpaid wages and liquidated damages. It also awarded costs.

Be careful what you wish for. The moral of these stories is so obvious I won’t say it twice. Just be sure, when asking a court for attorney’s fees (or opposing the other side’s request), that your position isn’t likely to provide fodder for post-decision chuckles around your opponent’s water cooler.

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Colorado governor signs anti-discrimination act targeting small employers

May 17th, 2013  |  Deborah Hammonds  |  Add a Comment

Colorado Governor John Hickenlooper recently signed the Job Protection and Civil Rights Enforcement Act of 2013.  The anti-discrimination act will allow the additional remedies of compensatory and punitive damages in employment discrimination cases brought under state law against employers where intentional discrimination is proven. These damages would be in addition to the remedies allowed under current law.

“As a former small business owner, I know full well that discrimination in the workplace is the rare exception and not the rule in Colorado,” Hickenlooper commented after signing the act on May 6. While sympathetic to the business community’s concerns of “red tape, needless bureaucracy and frivolous or harassing litigation,” the governor stated that his administration believed that “HB13-1136 has been crafted with safeguards against frivolous lawsuits and excessive damage claims. Moreover, we believe HB13-1136 rightly embraces employment discrimination remedies for companies with fewer than 15 employees that are recognized in most other states.”

“Colorado law already prohibits small business employers from engaging in unfair employment or discriminatory practices, but employees who are victimized by these practices can seek only job reinstatement and back pay for their claims,” he continued. “HB13-1136 expands available remedies for workers to recover compensatory and punitive damages from employers who have intentionally engaged in discriminatory practices. The damage awards are limited to $10,000 for employers with one-four employees, and $25,000 for employers with five-fourteen employees.”

“Among the provisions in HB13-1136 that provide safeguards for small businesses: (1) workers must establish intentional discrimination by the employer; (2) a plaintiff worker must exhaust all administrative remedies before going to court; (3) there is a mandatory process of mediation before going to court; (4) only courts and not administrative law judges are empowered to award damages to plaintiffs; (5) courts may award costs and attorney fees to defendant employers for frivolous claims; and (6) courts must consider the size and assets of defendant employers before awarding damages.”

The effective date for the Job Protection and Civil Rights Enforcement Act of 2013 has been delayed until January 2015 in order to allow for an outreach and public education campaign.

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Teacher fired for Facebook comment reinstated; court adopts a “just venting” defense

May 17th, 2013  |  Lisa Milam-Perez  |  Add a Comment

In the latest in a growing body of case law regarding teachers who are disciplined after taking to cyberspace to air their workaday grievances, a New York appeals court concluded that termination was too harsh a punishment for a teacher who posted on Facebook that she “hated” her students and that they were the “devil’s spawn.” The case was noteworthy in and of itself; it generated considerable attention in the press. But it’s also of interest for the court’s lenient take on employees’ social media slip-ups—and ensuing efforts to cover them up.

“Devil’s spawn.” Just one day after a student from another public school drowned at the beach during a field trip, the teacher posted a comment on her Facebook page: “After today, I am thinking the beach sounds like a wonderful idea for my 5th graders! I HATE THEIR GUTS! They are the devils (sic) spawn!” One of her Facebook friends, a school colleague, contacted the assistant principal, noting concerns about the propriety of the postings, and a school district investigation was launched.

When the teacher received the resulting discharge recommendation, she claimed she hadn’t written the offending comments—that a friend with access to her Facebook account had posted them. The investigator then interviewed the friend, who first stated that she was the author, but after being warned that she could be incarcerated for perjury, admitted that the teacher had asked her to take responsibility so she would not lose her job.

Discharge unwarranted. The appeals court unanimously affirmed a lower court’s order setting aside her discharge. The court cited the teacher’s otherwise unblemished record in her 15-year career, and her show of remorse, in holding that the case had properly been remanded to the New York City Department of Education to impose a lesser penalty. Although the posting was “clearly inappropriate,” the teacher was merely venting her frustration after a hard day in the classroom, the court said, noting too that she deleted the post just three days later. Moreover, the comments were directed to her online friends only, and her students (or their parents) were not among them. Therefore, the comments were not published to them or to the public at large, the court reasoned.

On this point, the appeals court seemingly endorsed the view of the lower court. “[W]ith Facebook, as with social media in general, one may express oneself as freely and rapidly as when conversing on the telephone with a friend,” Justice Barbara Jaffe wrote below. “Thus, even though petitioner should have known that her postings could become public more easily than if she had uttered them during a telephone call or over dinner, given the illusion that Facebook postings reach only Facebook friends and the fleeting nature of social media, her expectation that only her friends, all of whom are adults, would see the postings is not only apparent, but reasonable.”

The “just venting” defense. It’s a novel contribution to social media jurisprudence—the court’s holding that the teacher’s Facebook comments were not cause for discharge because she was merely venting frustration. After all, it’s difficult to conceive of an offensive Facebook comment that wouldn’t fall under the “just venting” defense. The ruling bodes well for employees: Under this standard, employers would be hard-pressed to terminate employees for any ill-advised work-related social media commentary.

Also worth noting is the presumption that employees have a reasonable expectation that their postings are for Facebook friends’ eyes only. This notion runs counter to the increasingly common conception that what’s posted on Facebook is public domain. And the court’s suggestion that the teacher mitigated her conduct by deleting the post days later ignores the fact that, practically speaking, Facebook postings are forever.

The fear factor. The fact that the teacher eventually admitted to making the comments after initially denying them also held sway. Significantly, the court below reasoned—and the appellate court affirmed—that the employee only misled investigators into thinking that her friend had posted the Facebook comments “out of fear of losing her livelihood, rather than as part of a premeditated plan.”

We don’t know from the facts provided the extent of premeditation involved in hatching the scheme by which her friend would take the fall for her. Or what, in the court’s view, would constitute a “plan.” But the rationale—that dishonesty is no cause for discharge if undertaken to save one’s job—could spell trouble for employers, and confound those who are charged with conducting workplace investigations on their behalf.

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Former Board member Craig Becker invalidly recess-appointed; clause refers to “intrasession break”

May 16th, 2013  |  Lisa Milam-Perez  |  Add a Comment

By Sheryl C. Allenson, J.D. and Lisa Milam-Perez, J.D.

In yet another blow to the authority of the embattled NLRB, a divided Third Circuit ruled the recess appointment of former NLRB member Craig Becker was invalid; thus, a three-member panel comprised in part of Becker was improperly constituted when it denied reconsideration of a Board order finding the employer unlawfully refused to bargain with a newly elected union (NLRB v New Vista Nursing and Rehabilitation, May 16, 2013, Smith, D). The appeals court rejected the contention that the definition of recess is a nonjusticiable political question. Ruling that recess appointments could only be made during an intersession recess, the majority found the current practice permitting intrasession appointments unconstitutional, noting that it was “contrary to the structural framework set out in the Constitution.”

Union seeks certification. In the underlying case, a healthcare union petitioned the NLRB for certification as the representative of New Vista Nursing and Rehabilitation’s licensed practical nurses. Arguing that the LPNs were supervisors, the employer opposed the certification, but the Board’s regional director certified the union and ordered an election. New Vista appealed to the Board, which affirmed the regional director’s decision. After the union won a majority in the election, the employer refused to bargain and the union filed an ULP charge. In an order dated August 26, 2011, the Board granted summary judgment in favor of the union and against the employer. That order was issued by a three-member “delegee group” of the Board, including member Craig Becker, a recess appointee.

Thereafter, New Vista filed a series of motions for reconsideration with the Board. In one instance, the employer argued that the Board acted ultra vires, suggesting that the summary judgment decision was actually issued after member Wilma Liebman resigned—meaning the Board had only two panel members when it issued its decision. Rejecting this position, the Third Circuit noted that the decision was dated before Liebman resigned and that the employer did not rebut the presumption of regularity in the Board’s conduct.

Without addressing the recess appointments issue raised by the employer, the Board denied a second motion for reconsideration. In response, the employer filed yet another motion for reconsideration, this time arguing that the three-member delegee group that issued the most recent ruling lacked three members because two were invalidly appointed while the Senate was not in recess. After it denied the motion, the Board filed an administrative record with the appeals court, where the agency had previously filed an application for enforcement. The employer filed a petition for review of the second and third reconsideration orders, which was consolidated with its petition for review for all purposes.

Jurisdictional requirement. Considering sua sponte whether the NLRB panel that issued the August 26 order had jurisdiction, the appellate majority held the three-member composition requirement is jurisdictional—and that the jurisdictional requirement applies with equal force to administrative agencies as to Article III courts.

In its extended analysis of jurisdiction, the Third Circuit drew on the Supreme Court’s decision in New Process Steel for guidance. According to the appeals court, that decision “renders the three-member composition requirement a ‘threshold limitation’ on the scope of the power delegated to the Board by the NLRA: the Board cannot exercise its power through a delegee group if that group has fewer than three members.” Under New Process Steel, the three-member requirement speaks directly to the Board’s power to hear a case; in other words, its jurisdictional power, the appeals court explained. Thus, before it can exercise its power over a case, the Board must meet the three-member composition requirement. Accordingly, the appeals court scrutinized not whether Members Richard Griffin and Sharon Block were validly appointed when they participated in later challenged decisions (the issue that the parties had briefed), but whether Becker was properly appointed—given that he was the only member of the delegee group that issued the August 26 order who was recess-appointed. It held he was not.

“Recess of the Senate.” Turning to the question of whether there are judicially manageable standards to define the term “the recess of the Senate,” the appeals court noted that there was a range of standards advanced and that only the Board’s standard might be unmanageable. Under the Board’s standard, recess appointments could occur “any time the Senate is not in session.” This definition does not rely on any particular Senate procedure and would require judicial “explor[ation] [of] communications between the Senate Minority and the president.”

In deciding that there were judicially manageable standards, the court refused to bite on the amicus’ bait suggesting that it adopt such standards for partisan reasons. Differentiating between a decision that has political overtones and one that invokes political questions, the appeals court explained that, in this instance, it was defining the term “the Recess of the Senate” because it was a justiciable question.

Member Becker was appointed during an intrasession break that lasted 17 days. During that time, the Senate was indisputably not open for business. Thus, the validity of his appointment hung on whether the Recess Appointment Clause empowers presidents to make appointments during these intrasession breaks.

Definitions. The Third Circuit explained at length the history behind recess appointments, and described the three meanings of “the Recess of the Senate.” Intersession breaks, which the appeals court found operative, are between an adjournment sine die and the start of the next session. The second is intersession and intrasession breaks that last a non-negligible period, historically 10 days. The third is the definition advanced by the Board: any time the Senate is “not open for business” and thus unavailable to provide advice and consent on nominations. Interpreting the phrase “the Recess of the Senate,” the appeals court found that the Board’s position was implausible, noting that the under the Board definition recess appointments could occur “whenever [Senators] leave for the weekend, go home for the evening, or even take a break for lunch..”

To determine what the phrase does mean, the appeals court turned to the Recess Appointments Clause itself and noted that it contained some temporal guidelines which suggest that “recess” meant intersession breaks only. Citing the text of the clause, the appeals court explained that recess-appointed officers’ terms “shall expire at the End of [the Senate’s] next Session,” implying that their appointments were made during a period between sessions. If, on the other hand, recess were to include intrasession breaks, the recess appointment term would be expected to last only until the end of “that” term, the court suggested. Finding support in the nuances of the word “next,” the appeals court concluded that the term “recess” could only contemplate an intersession break.

Recent practice aside, the Third Circuit found no support in the Constitution for the second definition of “the Recess of the Senate.” Rather, that practice, appearing with recent frequency beginning with President Ronald Regan, was incompatible with the Constitution, the appeals court found. “This means the current practice is contrary to the structural framework set out in the Constitution and must be held unconstitutional.” Thus, only intersession breaks constitute “the Recess of the Senate,” the Third Circuit held.

Invalid appointment. Because he was appointed during the March 2010 intrasession break, Member Becker was invalidly appointed, the Third Circuit ruled. The delegee group had fewer than three members when it issued its August 26 order and, therefore, acted without power and lacked jurisdiction when it did so. The majority vacated the Board‘s orders without addressing whether the substantive decision was correct—or whether the delegee groups that issued subsequent reconsideration orders (which included Griffin and Block) were properly composed.

Dissent. Judge Greenaway dissented, arguing that the majority’s reasoning “undoes an appointments process that has successfully operated within our separation of powers regime for over 220 years.” He would hold that “the Recess” refers to both intrasession and intersession recesses because the Senate can be unavailable to provide advice and consent during both. Consequently, Greenaway would hold that Member Becker (as well as Members Block, Flynn, and Griffin) were all appointed under a valid exercise of the executive power granted to the president by the Recess Appointments Clause.

“The inclusion of intrasession recesses in the ambit of the Recess Appointments Clause is the interpretation most faithful to the text of the Constitution, the intent of the Framers, the purpose of recess appointments, and the tradition and practice of both the President and the Senate.”

Ruling’s impact. While the D.C. Circuit’s Noel Canning decision held the NLRB lacked a quorum since January 2012, the Third Circuit today found the Board has been without a valid quorum since as far back as August 2011—with the departure of former Board Chair Wilma Liebman—thus calling into question even more agency rulings. As the anti-union National Right to Work Legal Defense Foundation noted, more than 1,500 NLRB decisions may be invalidated as a result of the Third Circuit’s holding.

Specifically, today’s ruling “puts into question most decisions still remaining in the circuit court in which Craig Becker (a March 2010 recess appointee) was a panel member,” noted Jeffrey M. Hirsch, an associate professor at the University of North Carolina School of Law (and contributor to the popular Workplace Prof blog). “The court held that any three-member panel that included Becker was invalid. So any case with Becker, except for the bigger ones that included more than three Board members, would be vacated under this decision. It would kill all decisions with Becker from August 28, 2011, to January 3, 2012, and all three-member decisions with Becker the rest of the time. For cases that were pending before Noel Canning in another court, if I were counsel for an employer, I would wave this argument around.”

“The bigger, near-term issue is, now there is another circuit court that will not uphold any decisions with Members Block or Griffin,” Hirsch said. “Practically speaking, this isn’t that big of a deal because any employer (or union) could bring any Board case to the D.C. Circuit, but for employers with cases before the Third Circuit, they can pursue that avenue of appeal as well.”

Another outcome of today’s decision: “It already knocks the NLRB’s morale a bit lower,” said Hirsch, a former appellate attorney for the agency.

Coincidentally, the ruling was handed down the same day that the Senate HELP Committee was holding a hearing on the full package of current NLRB nominees (including Griffin and Block, who had been prodded by Republicans to resign following Noel Canning). It’s not clear what impact, if any, today’s decision will have on the HELP committee vote, scheduled for next week.

“I don’t think the Block and Griffin nominations were going anywhere anyway,” Hirsch told Employment Law Daily. “This ruling even decreases that chance, no matter their individual qualifications. When the White House nominated the two Republican nominees [Harry I. Johnson and Philip Andrew Miscimarra], I had a slight sliver of hope that there was a deal in the works. But I have no idea whether that’s true or not.”

Similarly, that the Supreme Court will take up Noel Canning is widely considered a certainty, so it’s not clear that New Vista will affect the High Court’s decision whether to grant cert. “The issue is a pretty big one,” Hirsch notes, adding that with today’s decision, “the highly probable grant of cert has gotten even higher.”

Hirsch, for one, is curious to see how the Supreme Court will rule on the issue. “These courts are flipping 150 years of practice,” he observed. “It’s really kind of startling.”

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