April 10, 2025 • 38 mins
Constitutional law expert David Super, a professor at Georgetown Law, discusses President Trump’s recent wins at the Supreme Court. Financial market regulation expert Yesha Yadav, a professor at Vanderbilt University Law School, discusses the Trump administration cutting back on crypto enforcement. Bloomberg Law reporter Parker Purifoy discusses the Trump administration cutting labor mediators from 143 down to only four. June Grasso hosts.
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Speaker 1 (00:02):
This is Bloomberg Law with June Grossel from Bloomberg Radio.
President Trump is turning to the Supreme Court over and
over again as lower court judges reign in his efforts
to push the limits of executive power, and the court's
conservative majority seems to be accommodating him with consecutive but
(00:24):
narrow wins, even as the liberal minority dissents, led by
Justice Sonya Soto Mayor, who expressed concerns for the rule
of law at a Georgetown University forum last week.
Speaker 2 (00:37):
One of the things that's troubling so many right now
is many of the standards that are being changed right
now were norms that government that governed officials into what
was right and wrong. Once norms are broken, then you're
shaking some of the foundation of the rule of law.
Speaker 1 (00:59):
My guest is constitutional law expert David super, a professor
at Georgetown Law. David, if my calculations are correct, the
Trump administration has made eight emergency applications to the Supreme
Court in less than three months. I'm sure that's a record,
But why is the Supreme Court addressing so many of
(01:21):
these issues?
Speaker 3 (01:23):
Well, the Trump administration is making sweeping changes in our
system of government changing things that have been understood at
least since the New Deal, in many of them since
the founding. So these are important enough issues to merit
the Supreme Court's attention when they are enjoyed for being unlawful.
Speaker 1 (01:46):
So last Friday, the Supreme Court allowed the Education Department
to withhold money for teacher training projects in eight states.
It was a five to four decision. Chief Justice John
Roberts side with the court's three liberals, indicating they would
have denied the government's request. Do you see why he
was with the Court's liberals in that particular case.
Speaker 3 (02:08):
Well, he didn't write an opinion and he didn't sign
the opinions written by the liberal justices. So my sense
is that he simply didn't feel that the administration had
made a sufficiently compelling case and he wasn't entirely persuaded
by what the conservative majority wrote in their opinion.
Speaker 1 (02:28):
So did the conservative majority basically go off on a
procedural point.
Speaker 3 (02:33):
Yeah, many of these cases are procedural. The majority is
looking with a very powerful magnifying glass at the procedure
and in particular about which court something is filed in,
and are in three of the most significant cases, finding
(02:55):
that they don't believe it was in the right court.
That says nothing about the parents. If the cases get
refiled in the court that the Supreme Court prefers, which
some of them already have then, So I don't think
we can read very much into it other than that
this Court is hoping against hope that if they give
the administration a little more time, that it will come
(03:18):
into compliance with the law.
Speaker 1 (03:20):
Justice Katanji Brown Jackson, in a dissense, said it was
beyond puzzling that a majority of justices conceive of the
government's application as an emergency. I mean, it doesn't appear
that there's a real emergency in most of these applications
to the Court.
Speaker 3 (03:36):
No, it doesn't. There's no indication that funding these teacher
training programs would do any devastating harm. But everything the
administration does these days, it claims is an emergency. And
their basic theme is that they get to define what
(03:56):
an emergency is, no matter how absurd that claim is.
And for the moment, the Supreme Court is humoring them
on this. My sense is that that game will only
work for so long.
Speaker 1 (04:10):
In probably the most high profile of these emergency petitions,
on Monday, the court allowed Trump to continue deporting Venezuelan
migrants to prison in L Salvador under the Alien Enemies Act,
granting an emergency request on a five to four vote,
without deciding if he was using that law lawfully.
Speaker 3 (04:31):
Yes, they said that that case should not have been
in the district of the District of Columbia, should have
been in the Southern District of Texas, and the reasons
for that are not silly, but not very compelling either.
There certainly were plausible reasons to have file the case
where they did, but I think they're hoping that if
(04:55):
they make the case start all over again in the
Southern District of Texas, is the illustration will chalk that
up as a whin and back off from its absurd policy.
Speaker 1 (05:05):
They also didn't address the fact that hundreds of Venezuelan
migrants have been shipped to L Salvador already and are
in prison there a harsh prison, and a Bloomberg News
review found that just seven out of the two hundred
and thirty eight migrants have been found guilty of serious crimes.
(05:27):
I mean, they're sending people there based on tattoos and
the kind of clothes they're wearing and the court just
let that go by.
Speaker 3 (05:35):
Well, the Court said that there wasn't jurisdiction in the
district of Columbia, so they haven't said this is okay.
They have instead insisted that all that he's be crossed
and all the eyes be dotted before a court takes
action on this. Jurisdiction is one of the fundamental attributes
(05:56):
of courts, and they do need to attend to their jurisdiction.
On the other hand, past court have been willing to
resolve close questions on jurisdiction in favor of getting justice done,
and here five members of the Court were not willing
to do that.
Speaker 1 (06:14):
Again, it was a five to four, but this time
Justice amy Cony Barrett joined the liberal justices. Any accounting
for the sort of the Chief and Justice Barrett switching
positions in these two cases, do you see a reason
for that?
Speaker 3 (06:29):
I think that both cases, the majority's argument was tenuous
and it wasn't enough to persuade the Chief in the
first instance, and it wasn't enough to persuade Justice Barrett
in the second instance. Both of us are signaling that
they are not rubber stamps for the administration. But both
(06:52):
of them, I think, are also signaling that they would
like to give the administration a chance to come into
comply on its own. How long their patients will last
remains to be seen.
Speaker 1 (07:05):
Then on Tuesday, in the first mass firing case to
reach the court, the justices bolstered Trump's campaign to fire
federal workers, blocking a judge's order that required the administration
to reinstate employees. So this was seven to two, with
Justices Sonya Sotomayor and Katanji Brown Jackson dissenting again based on.
Speaker 3 (07:26):
Procedure Yes, The argument was that these cases should have
been brought initially through the merit system's civil service process
and resolved there rather than in federal court. If there
have been one individual person fired based on a quibble
(07:46):
over whether they were taking too much sickly, absolutely, the
merit system's process would be the right place. When it's
being done as a matter of policy on a mass basis,
without any consideration of individual circumstances, an injunction seems more appropriate.
But here the court decided to again insist on jurisdictional perfection.
Speaker 1 (08:10):
Is the majority sort of checking the easy way out
in these cases by making it more about procedure than
about the merits or the administration's policies.
Speaker 3 (08:20):
Oh, yes, very much. So you're not seeing opinions endorsing
what the administration has done. That would be very easy
for them to write either as an opinion of the
Court or as a concurring opinion from Justice Alito or whomever.
And you're just not seeing that. You're seeing nitpicking on jurisdiction.
(08:41):
So no one is sending the administration signs that what
it's doing is okay. And I think if the administration's
lawyers are paying the least bit of attention, they will
recognize that they're being given time but absolutely no encouragement
on the merits. And once the plain is iss follow
the instruction to the court as to how to obtain jurisdiction.
(09:03):
The court is giving the administration no encouragement that it
will get support on the merits.
Speaker 1 (09:09):
Yesterday, after a decision by the entire DC Circuit to
reinstate to independent agency officials fired by Trump without cause,
Trump went to the Supreme Court and the Chief Justice
issued in order putting the federal appeals court decision on hold,
so the fired workers remain fired. Does Robert's action indicate
(09:30):
support for Trump's efforts to remove any limits on his
power to hire and fire.
Speaker 3 (09:37):
That's not clear. The Chief Justice has previously daid actions
of lower courts and then turned around and voted against
the administration on the merits. So at the moment, all
we could assume is that this stay is an indication
that he thinks that all the justices ought to be
able to weigh in, which is sensible enough on an
(09:58):
issue of this scale. I. On the other hand, the
question of independent agencies may be a more complicated one
in the court because several justices have indicated that they
don't like independent agencies or don't believe that their independence
is appropriate. So on this one, it certainly is possible
that one all is said, in time, the administration will
(10:20):
succeed in changing constitutional law. I don't like the administration's
chances on most of the others, really, So you.
Speaker 1 (10:26):
Think that in this one the justices will expand presidential
power even further.
Speaker 3 (10:33):
I think it's possible. There are justices who have said
that the old Humphrey's Executor case, that is the foundation
for independent agencies, was badly decided and should be rejected.
We don't know how most of the Court will rule.
I think it's very possible that some of the justices
will feel that this is not the time to do
(10:55):
away with agencies independence when you have a president who
is hyper power artisan and pursuing an agenda with apparently
very little consultation with lawyers. But it may be that
they will take this as an occasion to make the
ruling that they've hinted at and get rid of the
independence of these agencies.
Speaker 1 (11:14):
Does it seem like there are four solid votes to
allow Trump to do whatever he wants.
Speaker 3 (11:20):
No, I don't think there are. I think if there were,
you would see them writing concurrences endorsing what the administration
is doing on the merits. I think the justices sitting
now are all serious people. They're people who I disagree
with on a great many issues, but I think that
(11:44):
they have to be concerned with the threat to the
rule of law here, and their silence on the merits
could indicate that they're hoping the administration will understand it
can't overplay its hand.
Speaker 1 (11:59):
Administration keeps taking bows saying it's winning. It's you know,
it's winning at the Supreme Court.
Speaker 3 (12:06):
So even though their lawyers are any good, they're telling
them behind the scenes that you're dodging a bullet here
and dodging a bullet there, but that the silence of
even the most conservative justices on the merit of your
action is quite deafening.
Speaker 1 (12:24):
Even if these wins are temporary and procedural, aren't they
backing the backing Trump's actions to transform the federal government,
you know, allowing him to go forward? You know, at
least in the public's mind, that's what they're seeing.
Speaker 3 (12:40):
Oh, certainly the public's perception, this looks like Trump is winning.
And until we get a case that doesn't have the
procedural glitches that the case is getting to the court
so far I've had, we won't know for sure how
the justices will break out on the merits of this.
(13:00):
The fact that they can't hold a consistent five should
be a warning side for the administration, but we won't
know until we get actual decisions. When the administration shows
that it is utterly unwilling to listen to these hints
from the Supreme Court and polity orders from the lower court,
(13:21):
we will get a much clearer decision where the justice
is all right on the merits of some important issue,
and we find that where it all stands, we'll see.
Speaker 1 (13:30):
How long it actually takes them to get to the
merits of a case. Great having you on, David, Thanks
so much. That's Professor David super of Georgetown Law Coming
up next. Crypto enforcement is dying down. This is Bloomberg.
The Justice Department is disbanding its crypto enforcement team and
(13:51):
scaling back on enforcement in line with President Trump's directives.
Joining me is an expert in financial market regulation, Yasha Yadiv, Upper,
professor at Vanderbilt University Law School. The Justice Department has
shut down this unit that investigates cryptocurrency fraud effective immediately.
(14:11):
In a memo, Deputy Attorney General Todd Blanche said, quote,
the prior administration used the Justice Department to pursue a
reckless strategy of regulation by prosecution, which was ill conceived
and poorly executed. Why are they doing this really.
Speaker 4 (14:29):
Well, Jane, It's a very interesting question, because what we
have here is a cryptocurrency enforcement team that I think
was really the envy of the world in many ways.
What this team brought together was a deep amount of
interdisciplinary expertise and intelligence across the Justice Department, which had
(14:50):
proven itself as being extremely effective at marshaling technical expertise,
at coordinating amongst different groups, at developing a strategy for
pursuing some of the most aggressive bad actors in the
crypto currency economy, most particularly like for example, the North
(15:11):
Koreans or Relentless Hackers. One of the most successful cases
of this team was really the Bits the Next Hack,
in which they prosecuted Iliah Liechtenstein and the famous rapper
Razzl Khan infamous rapper in some ways and collected a
great deal of stolen crypto. As a result of this,
they pursued dark markets and what that has shown is
(15:32):
that the Justice Department, through this team, as well as
of the personnel obviously, are extremely adept at keeping up
with some of the technical innovations, the creativity, the cat
and mouth chase that the technology enables, and this team
was bringing that expertise together to do that. You know,
what this enabled was making sure that the prosecutions that
(15:52):
were coming up to hold bad actors accountable had the
evidence that they needed to back them up, had the
technical know how to ensure that the standards of liability
would be met through the evidence of what was really happening.
And so this team did a lot from that perspective,
and so it'll be interesting to see what happens next
in terms of how that expertise as it diffuses across
(16:16):
the Justice Department can be marshaled still to prosecute the
bad actors in the crypto economy.
Speaker 1 (16:21):
I mean, are they interested in pursuing the bad actors?
The Security Exchange Commission has also dismissed lawsuits and pending
investigations involving crypto firms.
Speaker 4 (16:33):
The memo. What it said was essentially that the financial
regulators would play the lead role in taking into account
the regulatory failures that are happening in the cryptoeconomy, and
that the Justice Department would be less aggressive in this regard.
You know, what's interesting at this point is that the
regulatory framework for crypto is still being built. For example,
(16:54):
Congress is working on a number of pieces of legislation
to create that regulation perimeter, to find exactly who gets
to regulate particular kinds of assets, how they're going to
do it, what kind of particular provisions need to be
put in place. So, for example, right now, you know,
one of the major pieces of legislation involves stable coins.
This is the kind of crypto asset that is very,
(17:15):
very popular and impactful for payments. And what that means
when is you know, for something like payments, is that
aspects like money laundering, aspects like you know, knowing people's
identity and how to make sure that bad actors are
not implicated. You know, these things become involved. But at present,
these plainworks are really not there to the same extent,
(17:35):
and so the financial regulator is for example, as you know,
the SEC has said, for example, they won't regulate mean coins.
This is an area of the crypto economy that has
been perceived as being quite cd where allegations of pump
and dumps have been rife, and so the SEC at
that point says this is not their jurisdiction. Other regulators,
that the CFP be, the Consumer Financial Protection Bureau, have
(17:58):
seen a grade to the sort of legal dismantling about
their apparatus. And so the question really is who's going
to police the bad actors here? And you know, in
the case of the justice departments, they have not been
bringing claims with respect to, for example, whether or not
crypto assets or securities, whether there's certain kinds of commodities,
that's not the Justice Department's business. That's not what they're doing.
(18:20):
What they've been doing is prosecuting cases that involve criminal
activity very much on their beats, such as money laundering,
terrorist financing, fraud, and so the question becomes, really, how
are these kinds of bad, you know, illicit activity is
going to be dealt with going forward. One last thing
just to say on this is that the need to
(18:41):
protect the crypto market, the need to ensure it's clean,
the need to make sure that it's perceived as being
immaculate and trustworthy, is something that many in the industry
wants themselves. They want to see this industry as being
one that people can trust, particularly after dream cooins scams, STX,
sam Backmin Freed and you know Celsius and other, you know,
(19:04):
various hacks that have happened. You know, the industry itself
wants to be seen as, you know, it's one that's
worthy of trust. And so the Justice Department has played
a big role in that. Certainly not perfect. There have
been lots of instances where it's been criticized for certain cases,
but broadly, by and large, they've shown themselves as being
extremely intelligent and adept at doing the job that they've done.
Speaker 1 (19:24):
So you mentioned Sam Bankman freed, would a case like
his go under the radar without this unit in place
and with the new emphasis at the Justice Department, Well, the.
Speaker 4 (19:36):
Memo did say that they would be pursuing hacks, that
they'd be pursuing illicit activities connected with crypto, for example,
things like human trafficking. The memo also mentioned, you know,
the potential for kind of defive protocols that may be
facilitating cleaning post a kind of hack, that these would
also be pursued. So it's certainly not ruling out prosecutions
(19:59):
for crypto so currency related criminal activity. What the dismantling
of this unit, however, potentially could lead to is difficulties
in creating the evidentiary trails and keeping track of where
the vulnerabilities are with respect to the hackers having a
leg up in terms of technical advantage and speed and
(20:21):
the capacity to innovate, and the government not having the
ability then to keep up with these developments and so,
you know, one of the things that was interesting in
the bits the Next Hack for example, and the prosecutions
of Ilia Liechtenstein and Rassal Khan, was that the government
Saffa David showed that they were incredibly good at following
really complicated transaction trails where money was being filtered through
(20:44):
numerous blockchains and using you know, various kinds of different
marketplaces darkness that kind of clean the cash. And so
these are evidentiary intelligence that this unit was able to create.
And similarly for sambagmuin Freed and other sort of major
large scale wrongdoers that are very sophisticated potentially at moving crypto,
(21:06):
at hiding their evidence of their transactions. Even though the
blockchain is transparent, one can use all sorts of different
protocols to try and you know, maybe clean the money
very quickly, as it happened with respect the North Korean
bibit hack. And so you know, these are things that
this unit was good at. And so it's not that
the prosecutions are not likely to happen. I'm sure that
(21:27):
you know, the Justice Department will do what the Justice
Department does. But at the same time, it's about being
able to collate that evidence, to be able to get
ahead of the technology, to be able to predict where
some of the bad actors might go next, and then
prepare the government to make those prosecutions really stick.
Speaker 1 (21:44):
Do you think there'll be an increase in state regulatory activity?
Last month, California's AG said it would continue protecting consumers
from crypto confidence scams and ags in New York, Massachusetts
and Illinois said similar things things. You think we'll see
more enforcement on the state level.
Speaker 4 (22:03):
Absolutely, so. I think the states are definitely revving up
to step into some of the gaps that may be
left here. One has seen states in general over the
last couple of years is you know, crypto has been
gaining a foothold in the mainstream, states have stepped up
in any event to try and regulate this marketplace. So
some notable examples here include New York and Wyoming, for example,
(22:27):
that have put you know, perimeters in place for cryptoactivities.
And so with respect to just general wrongdoing in crypto,
certainly one is going to see the states step up,
you know, as you mentioned California, New York and others.
I'm sure we'll be paying close attention. In addition, of course,
you know, one aspect that does need to be addressed
(22:47):
here is that certain crimes are federal crimes which do
require federal intervention. So when one thinks of money laundering,
terrorist financing, why are fraud these are cases that are
being brought federally as federal crimes. Often these can carry
higher penalties and therefore potentially have you know, a steeper
(23:08):
the terrance effect? And so the question really becomes, does
the lack of federal emphasis here? I mean, there's certain
kinds offenses such as money laundering, terrorists, financing, fail to
get the intensity or prosecution that they have currently and
what will be the effect of that on you know,
bad actors in this economy potentially taking advantage off the US,
(23:29):
which has been the kop on the block worldwide, not
just here in the US, of the Justice Department, potentially
taking its foot off the pedal with respect to the
aggressiveness of which it pursues these claimed.
Speaker 1 (23:40):
I mean, do you think this sort of led up
in crypto enforcement is because Trump wants to make this
the crypto capital of the planet. Do they see less
enforcement as part of that goal?
Speaker 4 (23:56):
I think one of the you know, one of the
aspects here that was indicated in the memo itself is
a reaction to the perception of the last administration was
very aggressive in using litigation as a strategy for creating
a regulated perimeter for crypto. So, in general, there has
been a lot of criticism of regulation by enforcements trying
(24:17):
to make cryptocurrency fit existing rules through litigation, through bringing
lawsuits rather than creating rules, and creating a perimeter through
a conversation with the industry rather than mis litigating against
the industry. So, you know, it feels like this memo
seems to be kind of reflecting a backlash to that approach.
(24:39):
One of the aspects that the memo sort of singles
out is that it speaks to the perception that some
of the cases that were brought by the Justice Department,
for example against Tornado Cash, against developers in this space
were ones that were overly aggressive, were ones that you
overstep the balance of what the Justice Department should be doing.
(25:00):
And particularly, just to give you some background, the Justice
Department brought a case against a number of developers, those
who write the code. You know, they were bringing cases
against developers of mixers. These were codes that can potentially
create a greater degree of obfuscation between who owns the
crypto and the kind of transaction trails that might exist there.
(25:20):
And for the developers, these were privacy enhancing code. There's
a privacy enhanting tools. And furthermore, you know, writing code,
they have argued, is a free speech right, and so
prosecuting it led to a great deal of criticism against
the Justice Department from the industry, and so part of
this memoir appears to reflect that feeling that developers, that
(25:42):
those who are writing code, that those who are creating
in this space were potentially being targeted in ways that
were unfair. But you know, equally, the question and becomes
what happens when you know the entire enforcement approach is
geared towards scaling back, especially when the industry is now
becoming mainstream, when every day users are looking to get
into crypto in a big way, when it's being encouraged
(26:04):
as a very mainstream activity for Americans, spy an administration
that's really backing this industry, and the industry is coming
into its own.
Speaker 1 (26:12):
At this point, it seems like something may fall through
the cracks. Thanks so much for being on the show.
That's professor Yasha Yadiv of Vanderbilt University Law School coming
up next. Trump cuts labor mediators from one hundred and
forty three down to four. This is Bloomberg. The Federal
(26:33):
Mediation Conciliation Service is a small labor agency that has
played an outsized role in some of the nation's largest
workplace negotiations over the last several years, including those at Starbucks, Boeing,
and Apple. But now the Trump administration has gutted the
FMCS of nearly all its labor mediators, endangering a key
(26:57):
means of resolving employer union conflicts, driving up negotiation costs
and potentially leading to more strikes and lockouts. Joining me
is Bloomberg Law reporter Parker Purifoid. Parker tell us about
the Federal Mediation and Conciliation Service.
Speaker 5 (27:14):
It was, you know, kind of a small agency and
its main role was to provide mediators to employers and unions.
They do both public sector and private sector work, so
they send mediators in when there's some kind of dispute
over a contract or grievance or something like that. They'll
(27:38):
try to get the parties both on the same page.
Speaker 1 (27:41):
There are one hundred and forty three mediators before Trump
took office. How many are there now?
Speaker 5 (27:48):
There are four lefts now, from what we can tell
from speaking to employees there, The administration gave various offers
for early retirement and sent to or other like more
buy out structured incentives to leave. So we know that
some of the mediators took those incentives to leave the
(28:09):
administration and then the rest after that were laid off.
So they're on administrative leave right now, and then they'll
be kind of rolled into the reduction enforce procedures and
laid off.
Speaker 1 (28:24):
Explain how the mediation service has been crucial in preventing
and ending strikes in recent years. Tell us about some instances.
Speaker 5 (28:34):
Yeah, I always say that they kind of fly under
the radar because no one really talks about them. Reporters
don't talk to them, like they're not quoted in any
of these big stories. But they are on hand a
lot in these, you know, really big labor disputes. So
one example was the strike between Boeing and their machinists
(28:58):
last year. The fm CS mediators were on hand for that,
and also, as I'm sure you can recall, there's been
some contract disputes with the dock workers in East and
West Coast ports over the last couple of years, and
the mediators were also on hand during that. Another examples
that they helped facilitate a first contract between Apple and
(29:22):
some of its retail workers up in Thousand, Maryland last
year as well in twenty twenty three, they helped negotiate
almost twenty five hundred collective bargaining negotiations, so they're involved
in quite a lot of them.
Speaker 1 (29:37):
Jefferson Diedrich and FMCS commissioner said in March twenty sixth
post that it saved the economy over five hundred million
annually with less than one hundred and fifty mediators and
point zero zero one four percent of the federal budget.
So this was a tiny agency comparatively, right.
Speaker 5 (29:59):
I think it's budget was somewhere in the ballpark of
fifty to seventy million dollars, so really tiny compared to,
you know, most of the other agencies. But yeah, as
Jefferson said in his post, they certainly have kind of
an outsized impact on the economy when you think about
all of the work that they do to prevent strikes
(30:20):
that could be you know, crippling to the economy.
Speaker 1 (30:23):
Has the effect of this been felt yet.
Speaker 5 (30:27):
Yeah, definitely. I actually spoke to a number of attorneys,
mostly in the in the private sector, who said that
they found out about the layoffs because the mediators that
they were working with in their you know, current negotiations
had to leave the bargaining table because they were told
(30:47):
that they were laid off. One concrete example is Starbucks
and Starbucks Workers United has been involved in kind of
a month long negotiation process to try to come up
with a framework for bargaining their contracts, and their negotiations
were being mediated by FMCS mediators, and one of the
(31:09):
two of their mediators were laid off and pulled off
of the table. But I think that more than that,
I have heard a lot of anxiety amongst attorneys in
the last couple of weeks who say that now they're
going to have to look to getting private mediators, and
they're going to have to split the costs, you know,
(31:30):
the employer in the union are going to have to
split the cost of the mediators, and so all of
this is just going to drive up the cost of
negotiations and also bring in more potential for strikes or
lockouts or other eventualities like that.
Speaker 1 (31:47):
What happens in the public sector where some federal and
state agencies are contractually required to mediate through fmcs, So
what would happen there?
Speaker 5 (31:59):
Yeah, I think it's pretty fact specific, but like you said,
a lot of state and federal agencies have to involve
an FMCS mediator somewhere in their process before they can
go to either like arbitration over a dispute, or in
the federal sector, when a union is trying to negotiate
(32:23):
a contract and they're having a difficult time reaching an
agreement with the government, the mediator will step in try
to mediate that dispute. If the mediator can't you help
them reach an agreement, then the mediator needs to sign
off in order for the dispute to go before a
panel who will ultimately decide what the terms of the
(32:45):
agreement are. So this is kind of just placing, i
would say, even more significant roadblocks for the public sector
because they are contractually obligated to seek the approval of
FMCS mediators and now that you could potentially take months
or years to do that. Now that there are only
(33:06):
four mediators available for the whole country.
Speaker 1 (33:10):
Can other agencies within the federal government fill in the gaps,
like the NLRB.
Speaker 5 (33:17):
So the NLRB legally cannot use any of their money
that's been appropriated by Congress to pay for mediation services.
A lot of times, the NLRB will help connect parties
to fmcs, but the NLRB cannot do that themselves. The
(33:37):
Labor Department has been involved a little bit. Labor Department
officials will frequently, I guess, get involved in some of
these higher profile strikes or contract disputes, like under the
Biden administration, Acting Labor Secretary Julie Sue would go out
to negotiations pretty frequently to help negotiate. But you know,
(34:01):
I think taking up all of the work that FMCS
and just folding it into the Labor Department. What I've
heard from sources is that that is not a feasible
option at this point.
Speaker 1 (34:14):
A coalition of twenty one states sued the Trump administration
last week over laying off staff and reducing the functions
of seven federal agencies, including the FMCS. What are the
grounds for that lawsuit?
Speaker 5 (34:29):
The states are basically alleging that the actions by the
administration are having adverse impact on the states. So the
states do mentioned in regard to the fmcs. They mentioned
that a lot of their state agencies need to go
through fmcs and if they were to have to engage
(34:50):
with private mediators that that would place a large financial
burden on the states to do so. And yeah, they're
basically alleging that the agencies, not just FMCS, but these
other small agencies, were created by acts of Congress, and
they believe that the president can't just unilaterally essentially get
(35:12):
rid of them.
Speaker 1 (35:13):
Is the FMCS just one agency among many that has
been targeted or do people say that it's been targeted
because it has to do with labor and labor unions,
which the Trump administration has also targeted.
Speaker 5 (35:30):
I mean, I think, you know, the federal government is
being pretty unprecedented level of layoffs. Certainly, Trump has stated
and has indicated that he is willing to do everything
that he can to, you know, reduce what he says
is administrative blowed and fraud and wasting of taxpayer dollars.
(35:53):
But certainly FMCS is only one of the labor agencies
that has been impacted. Trump also fired one of the
NLRB members right at the beginning of his term, along
with members of other agencies that resolve disputes within the
federal government. So certainly, many of the labor side attorneys
(36:16):
that I talked to say that this is a deliberate
targeting of the labor agencies in order to kind of
remove workers' ads towards getting recourse, you know, in any
of these these actions.
Speaker 1 (36:30):
According to an agency fact sheet, FMCS was involved in
two thy four hundred sixty seven collective bargaining negotiations, one
two hundred and sixty five high impact grievance mediations, and
conducted one thousand, five hundred and sixty six training programs
in twenty twenty three. Thanks so much, Parker. That's Bloomberg
(36:53):
Law reporter Parker Purifoy. In other legal news, at the
Justice Department, we're Attorney General Pam Bondi's has coincided with
the removal or reassignment of a growing number of career officials.
According to Bloomberg sources, the Justice Department removed the acting
National Security head from his post hours after Bondie saw
(37:15):
a portrait of former President Joe Biden continuing to hang
in the division's front office. This happened in February, just
weeks after Devin de Backer was elevated to serve as
the acting chief of the National Security Division. He's a
former associate White House counsel during the first Trump administration.
(37:36):
His devotion came the same day BONDI saw the portraits
of Biden, former Vice President Kamala Harris, and former Attorney
General Merrick Garland still on the wall. And that's it
for this edition of The Bloomberg Law Show. Remember you
can always get the latest legal news on our Bloomberg
Law Podcast. You can find them on Apple Podcasts, Spotify,
(37:57):
and at www dot bloomberg dot com com slash podcast
slash Law, And remember to tune into The Bloomberg Law
Show every weeknight at ten pm Wall Street Time. I'm
June Grosso and you're listening to Bloomberg
This is Bloomberg Law with June Grossel from Bloomberg Radio.
President Trump is turning to the Supreme Court over and
over again as lower court judges reign in his efforts
to push the limits of executive power, and the court's
conservative majority seems to be accommodating him with consecutive but
(00:24):
narrow wins, even as the liberal minority dissents, led by
Justice Sonya Soto Mayor, who expressed concerns for the rule
of law at a Georgetown University forum last week.
Speaker 2 (00:37):
One of the things that's troubling so many right now
is many of the standards that are being changed right
now were norms that government that governed officials into what
was right and wrong. Once norms are broken, then you're
shaking some of the foundation of the rule of law.
Speaker 1 (00:59):
My guest is constitutional law expert David super, a professor
at Georgetown Law. David, if my calculations are correct, the
Trump administration has made eight emergency applications to the Supreme
Court in less than three months. I'm sure that's a record,
But why is the Supreme Court addressing so many of
(01:21):
these issues?
Speaker 3 (01:23):
Well, the Trump administration is making sweeping changes in our
system of government changing things that have been understood at
least since the New Deal, in many of them since
the founding. So these are important enough issues to merit
the Supreme Court's attention when they are enjoyed for being unlawful.
Speaker 1 (01:46):
So last Friday, the Supreme Court allowed the Education Department
to withhold money for teacher training projects in eight states.
It was a five to four decision. Chief Justice John
Roberts side with the court's three liberals, indicating they would
have denied the government's request. Do you see why he
was with the Court's liberals in that particular case.
Speaker 3 (02:08):
Well, he didn't write an opinion and he didn't sign
the opinions written by the liberal justices. So my sense
is that he simply didn't feel that the administration had
made a sufficiently compelling case and he wasn't entirely persuaded
by what the conservative majority wrote in their opinion.
Speaker 1 (02:28):
So did the conservative majority basically go off on a
procedural point.
Speaker 3 (02:33):
Yeah, many of these cases are procedural. The majority is
looking with a very powerful magnifying glass at the procedure
and in particular about which court something is filed in,
and are in three of the most significant cases, finding
(02:55):
that they don't believe it was in the right court.
That says nothing about the parents. If the cases get
refiled in the court that the Supreme Court prefers, which
some of them already have then, So I don't think
we can read very much into it other than that
this Court is hoping against hope that if they give
the administration a little more time, that it will come
(03:18):
into compliance with the law.
Speaker 1 (03:20):
Justice Katanji Brown Jackson, in a dissense, said it was
beyond puzzling that a majority of justices conceive of the
government's application as an emergency. I mean, it doesn't appear
that there's a real emergency in most of these applications
to the Court.
Speaker 3 (03:36):
No, it doesn't. There's no indication that funding these teacher
training programs would do any devastating harm. But everything the
administration does these days, it claims is an emergency. And
their basic theme is that they get to define what
(03:56):
an emergency is, no matter how absurd that claim is.
And for the moment, the Supreme Court is humoring them
on this. My sense is that that game will only
work for so long.
Speaker 1 (04:10):
In probably the most high profile of these emergency petitions,
on Monday, the court allowed Trump to continue deporting Venezuelan
migrants to prison in L Salvador under the Alien Enemies Act,
granting an emergency request on a five to four vote,
without deciding if he was using that law lawfully.
Speaker 3 (04:31):
Yes, they said that that case should not have been
in the district of the District of Columbia, should have
been in the Southern District of Texas, and the reasons
for that are not silly, but not very compelling either.
There certainly were plausible reasons to have file the case
where they did, but I think they're hoping that if
(04:55):
they make the case start all over again in the
Southern District of Texas, is the illustration will chalk that
up as a whin and back off from its absurd policy.
Speaker 1 (05:05):
They also didn't address the fact that hundreds of Venezuelan
migrants have been shipped to L Salvador already and are
in prison there a harsh prison, and a Bloomberg News
review found that just seven out of the two hundred
and thirty eight migrants have been found guilty of serious crimes.
(05:27):
I mean, they're sending people there based on tattoos and
the kind of clothes they're wearing and the court just
let that go by.
Speaker 3 (05:35):
Well, the Court said that there wasn't jurisdiction in the
district of Columbia, so they haven't said this is okay.
They have instead insisted that all that he's be crossed
and all the eyes be dotted before a court takes
action on this. Jurisdiction is one of the fundamental attributes
(05:56):
of courts, and they do need to attend to their jurisdiction.
On the other hand, past court have been willing to
resolve close questions on jurisdiction in favor of getting justice done,
and here five members of the Court were not willing
to do that.
Speaker 1 (06:14):
Again, it was a five to four, but this time
Justice amy Cony Barrett joined the liberal justices. Any accounting
for the sort of the Chief and Justice Barrett switching
positions in these two cases, do you see a reason
for that?
Speaker 3 (06:29):
I think that both cases, the majority's argument was tenuous
and it wasn't enough to persuade the Chief in the
first instance, and it wasn't enough to persuade Justice Barrett
in the second instance. Both of us are signaling that
they are not rubber stamps for the administration. But both
(06:52):
of them, I think, are also signaling that they would
like to give the administration a chance to come into
comply on its own. How long their patients will last
remains to be seen.
Speaker 1 (07:05):
Then on Tuesday, in the first mass firing case to
reach the court, the justices bolstered Trump's campaign to fire
federal workers, blocking a judge's order that required the administration
to reinstate employees. So this was seven to two, with
Justices Sonya Sotomayor and Katanji Brown Jackson dissenting again based on.
Speaker 3 (07:26):
Procedure Yes, The argument was that these cases should have
been brought initially through the merit system's civil service process
and resolved there rather than in federal court. If there
have been one individual person fired based on a quibble
(07:46):
over whether they were taking too much sickly, absolutely, the
merit system's process would be the right place. When it's
being done as a matter of policy on a mass basis,
without any consideration of individual circumstances, an injunction seems more appropriate.
But here the court decided to again insist on jurisdictional perfection.
Speaker 1 (08:10):
Is the majority sort of checking the easy way out
in these cases by making it more about procedure than
about the merits or the administration's policies.
Speaker 3 (08:20):
Oh, yes, very much. So you're not seeing opinions endorsing
what the administration has done. That would be very easy
for them to write either as an opinion of the
Court or as a concurring opinion from Justice Alito or whomever.
And you're just not seeing that. You're seeing nitpicking on jurisdiction.
(08:41):
So no one is sending the administration signs that what
it's doing is okay. And I think if the administration's
lawyers are paying the least bit of attention, they will
recognize that they're being given time but absolutely no encouragement
on the merits. And once the plain is iss follow
the instruction to the court as to how to obtain jurisdiction.
(09:03):
The court is giving the administration no encouragement that it
will get support on the merits.
Speaker 1 (09:09):
Yesterday, after a decision by the entire DC Circuit to
reinstate to independent agency officials fired by Trump without cause,
Trump went to the Supreme Court and the Chief Justice
issued in order putting the federal appeals court decision on hold,
so the fired workers remain fired. Does Robert's action indicate
(09:30):
support for Trump's efforts to remove any limits on his
power to hire and fire.
Speaker 3 (09:37):
That's not clear. The Chief Justice has previously daid actions
of lower courts and then turned around and voted against
the administration on the merits. So at the moment, all
we could assume is that this stay is an indication
that he thinks that all the justices ought to be
able to weigh in, which is sensible enough on an
(09:58):
issue of this scale. I. On the other hand, the
question of independent agencies may be a more complicated one
in the court because several justices have indicated that they
don't like independent agencies or don't believe that their independence
is appropriate. So on this one, it certainly is possible
that one all is said, in time, the administration will
(10:20):
succeed in changing constitutional law. I don't like the administration's
chances on most of the others, really, So you.
Speaker 1 (10:26):
Think that in this one the justices will expand presidential
power even further.
Speaker 3 (10:33):
I think it's possible. There are justices who have said
that the old Humphrey's Executor case, that is the foundation
for independent agencies, was badly decided and should be rejected.
We don't know how most of the Court will rule.
I think it's very possible that some of the justices
will feel that this is not the time to do
(10:55):
away with agencies independence when you have a president who
is hyper power artisan and pursuing an agenda with apparently
very little consultation with lawyers. But it may be that
they will take this as an occasion to make the
ruling that they've hinted at and get rid of the
independence of these agencies.
Speaker 1 (11:14):
Does it seem like there are four solid votes to
allow Trump to do whatever he wants.
Speaker 3 (11:20):
No, I don't think there are. I think if there were,
you would see them writing concurrences endorsing what the administration
is doing on the merits. I think the justices sitting
now are all serious people. They're people who I disagree
with on a great many issues, but I think that
(11:44):
they have to be concerned with the threat to the
rule of law here, and their silence on the merits
could indicate that they're hoping the administration will understand it
can't overplay its hand.
Speaker 1 (11:59):
Administration keeps taking bows saying it's winning. It's you know,
it's winning at the Supreme Court.
Speaker 3 (12:06):
So even though their lawyers are any good, they're telling
them behind the scenes that you're dodging a bullet here
and dodging a bullet there, but that the silence of
even the most conservative justices on the merit of your
action is quite deafening.
Speaker 1 (12:24):
Even if these wins are temporary and procedural, aren't they
backing the backing Trump's actions to transform the federal government,
you know, allowing him to go forward? You know, at
least in the public's mind, that's what they're seeing.
Speaker 3 (12:40):
Oh, certainly the public's perception, this looks like Trump is winning.
And until we get a case that doesn't have the
procedural glitches that the case is getting to the court
so far I've had, we won't know for sure how
the justices will break out on the merits of this.
(13:00):
The fact that they can't hold a consistent five should
be a warning side for the administration, but we won't
know until we get actual decisions. When the administration shows
that it is utterly unwilling to listen to these hints
from the Supreme Court and polity orders from the lower court,
(13:21):
we will get a much clearer decision where the justice
is all right on the merits of some important issue,
and we find that where it all stands, we'll see.
Speaker 1 (13:30):
How long it actually takes them to get to the
merits of a case. Great having you on, David, Thanks
so much. That's Professor David super of Georgetown Law Coming
up next. Crypto enforcement is dying down. This is Bloomberg.
The Justice Department is disbanding its crypto enforcement team and
(13:51):
scaling back on enforcement in line with President Trump's directives.
Joining me is an expert in financial market regulation, Yasha Yadiv, Upper,
professor at Vanderbilt University Law School. The Justice Department has
shut down this unit that investigates cryptocurrency fraud effective immediately.
(14:11):
In a memo, Deputy Attorney General Todd Blanche said, quote,
the prior administration used the Justice Department to pursue a
reckless strategy of regulation by prosecution, which was ill conceived
and poorly executed. Why are they doing this really.
Speaker 4 (14:29):
Well, Jane, It's a very interesting question, because what we
have here is a cryptocurrency enforcement team that I think
was really the envy of the world in many ways.
What this team brought together was a deep amount of
interdisciplinary expertise and intelligence across the Justice Department, which had
(14:50):
proven itself as being extremely effective at marshaling technical expertise,
at coordinating amongst different groups, at developing a strategy for
pursuing some of the most aggressive bad actors in the
crypto currency economy, most particularly like for example, the North
(15:11):
Koreans or Relentless Hackers. One of the most successful cases
of this team was really the Bits the Next Hack,
in which they prosecuted Iliah Liechtenstein and the famous rapper
Razzl Khan infamous rapper in some ways and collected a
great deal of stolen crypto. As a result of this,
they pursued dark markets and what that has shown is
(15:32):
that the Justice Department, through this team, as well as
of the personnel obviously, are extremely adept at keeping up
with some of the technical innovations, the creativity, the cat
and mouth chase that the technology enables, and this team
was bringing that expertise together to do that. You know,
what this enabled was making sure that the prosecutions that
(15:52):
were coming up to hold bad actors accountable had the
evidence that they needed to back them up, had the
technical know how to ensure that the standards of liability
would be met through the evidence of what was really happening.
And so this team did a lot from that perspective,
and so it'll be interesting to see what happens next
in terms of how that expertise as it diffuses across
(16:16):
the Justice Department can be marshaled still to prosecute the
bad actors in the crypto economy.
Speaker 1 (16:21):
I mean, are they interested in pursuing the bad actors?
The Security Exchange Commission has also dismissed lawsuits and pending
investigations involving crypto firms.
Speaker 4 (16:33):
The memo. What it said was essentially that the financial
regulators would play the lead role in taking into account
the regulatory failures that are happening in the cryptoeconomy, and
that the Justice Department would be less aggressive in this regard.
You know, what's interesting at this point is that the
regulatory framework for crypto is still being built. For example,
(16:54):
Congress is working on a number of pieces of legislation
to create that regulation perimeter, to find exactly who gets
to regulate particular kinds of assets, how they're going to
do it, what kind of particular provisions need to be
put in place. So, for example, right now, you know,
one of the major pieces of legislation involves stable coins.
This is the kind of crypto asset that is very,
(17:15):
very popular and impactful for payments. And what that means
when is you know, for something like payments, is that
aspects like money laundering, aspects like you know, knowing people's
identity and how to make sure that bad actors are
not implicated. You know, these things become involved. But at present,
these plainworks are really not there to the same extent,
(17:35):
and so the financial regulator is for example, as you know,
the SEC has said, for example, they won't regulate mean coins.
This is an area of the crypto economy that has
been perceived as being quite cd where allegations of pump
and dumps have been rife, and so the SEC at
that point says this is not their jurisdiction. Other regulators,
that the CFP be, the Consumer Financial Protection Bureau, have
(17:58):
seen a grade to the sort of legal dismantling about
their apparatus. And so the question really is who's going
to police the bad actors here? And you know, in
the case of the justice departments, they have not been
bringing claims with respect to, for example, whether or not
crypto assets or securities, whether there's certain kinds of commodities,
that's not the Justice Department's business. That's not what they're doing.
(18:20):
What they've been doing is prosecuting cases that involve criminal
activity very much on their beats, such as money laundering,
terrorist financing, fraud, and so the question becomes, really, how
are these kinds of bad, you know, illicit activity is
going to be dealt with going forward. One last thing
just to say on this is that the need to
(18:41):
protect the crypto market, the need to ensure it's clean,
the need to make sure that it's perceived as being
immaculate and trustworthy, is something that many in the industry
wants themselves. They want to see this industry as being
one that people can trust, particularly after dream cooins scams, STX,
sam Backmin Freed and you know Celsius and other, you know,
(19:04):
various hacks that have happened. You know, the industry itself
wants to be seen as, you know, it's one that's
worthy of trust. And so the Justice Department has played
a big role in that. Certainly not perfect. There have
been lots of instances where it's been criticized for certain cases,
but broadly, by and large, they've shown themselves as being
extremely intelligent and adept at doing the job that they've done.
Speaker 1 (19:24):
So you mentioned Sam Bankman freed, would a case like
his go under the radar without this unit in place
and with the new emphasis at the Justice Department, Well, the.
Speaker 4 (19:36):
Memo did say that they would be pursuing hacks, that
they'd be pursuing illicit activities connected with crypto, for example,
things like human trafficking. The memo also mentioned, you know,
the potential for kind of defive protocols that may be
facilitating cleaning post a kind of hack, that these would
also be pursued. So it's certainly not ruling out prosecutions
(19:59):
for crypto so currency related criminal activity. What the dismantling
of this unit, however, potentially could lead to is difficulties
in creating the evidentiary trails and keeping track of where
the vulnerabilities are with respect to the hackers having a
leg up in terms of technical advantage and speed and
(20:21):
the capacity to innovate, and the government not having the
ability then to keep up with these developments and so,
you know, one of the things that was interesting in
the bits the Next Hack for example, and the prosecutions
of Ilia Liechtenstein and Rassal Khan, was that the government
Saffa David showed that they were incredibly good at following
really complicated transaction trails where money was being filtered through
(20:44):
numerous blockchains and using you know, various kinds of different
marketplaces darkness that kind of clean the cash. And so
these are evidentiary intelligence that this unit was able to create.
And similarly for sambagmuin Freed and other sort of major
large scale wrongdoers that are very sophisticated potentially at moving crypto,
(21:06):
at hiding their evidence of their transactions. Even though the
blockchain is transparent, one can use all sorts of different
protocols to try and you know, maybe clean the money
very quickly, as it happened with respect the North Korean
bibit hack. And so you know, these are things that
this unit was good at. And so it's not that
the prosecutions are not likely to happen. I'm sure that
(21:27):
you know, the Justice Department will do what the Justice
Department does. But at the same time, it's about being
able to collate that evidence, to be able to get
ahead of the technology, to be able to predict where
some of the bad actors might go next, and then
prepare the government to make those prosecutions really stick.
Speaker 1 (21:44):
Do you think there'll be an increase in state regulatory activity?
Last month, California's AG said it would continue protecting consumers
from crypto confidence scams and ags in New York, Massachusetts
and Illinois said similar things things. You think we'll see
more enforcement on the state level.
Speaker 4 (22:03):
Absolutely, so. I think the states are definitely revving up
to step into some of the gaps that may be
left here. One has seen states in general over the
last couple of years is you know, crypto has been
gaining a foothold in the mainstream, states have stepped up
in any event to try and regulate this marketplace. So
some notable examples here include New York and Wyoming, for example,
(22:27):
that have put you know, perimeters in place for cryptoactivities.
And so with respect to just general wrongdoing in crypto,
certainly one is going to see the states step up,
you know, as you mentioned California, New York and others.
I'm sure we'll be paying close attention. In addition, of course,
you know, one aspect that does need to be addressed
(22:47):
here is that certain crimes are federal crimes which do
require federal intervention. So when one thinks of money laundering,
terrorist financing, why are fraud these are cases that are
being brought federally as federal crimes. Often these can carry
higher penalties and therefore potentially have you know, a steeper
(23:08):
the terrance effect? And so the question really becomes, does
the lack of federal emphasis here? I mean, there's certain
kinds offenses such as money laundering, terrorists, financing, fail to
get the intensity or prosecution that they have currently and
what will be the effect of that on you know,
bad actors in this economy potentially taking advantage off the US,
(23:29):
which has been the kop on the block worldwide, not
just here in the US, of the Justice Department, potentially
taking its foot off the pedal with respect to the
aggressiveness of which it pursues these claimed.
Speaker 1 (23:40):
I mean, do you think this sort of led up
in crypto enforcement is because Trump wants to make this
the crypto capital of the planet. Do they see less
enforcement as part of that goal?
Speaker 4 (23:56):
I think one of the you know, one of the
aspects here that was indicated in the memo itself is
a reaction to the perception of the last administration was
very aggressive in using litigation as a strategy for creating
a regulated perimeter for crypto. So, in general, there has
been a lot of criticism of regulation by enforcements trying
(24:17):
to make cryptocurrency fit existing rules through litigation, through bringing
lawsuits rather than creating rules, and creating a perimeter through
a conversation with the industry rather than mis litigating against
the industry. So, you know, it feels like this memo
seems to be kind of reflecting a backlash to that approach.
(24:39):
One of the aspects that the memo sort of singles
out is that it speaks to the perception that some
of the cases that were brought by the Justice Department,
for example against Tornado Cash, against developers in this space
were ones that were overly aggressive, were ones that you
overstep the balance of what the Justice Department should be doing.
(25:00):
And particularly, just to give you some background, the Justice
Department brought a case against a number of developers, those
who write the code. You know, they were bringing cases
against developers of mixers. These were codes that can potentially
create a greater degree of obfuscation between who owns the
crypto and the kind of transaction trails that might exist there.
(25:20):
And for the developers, these were privacy enhancing code. There's
a privacy enhanting tools. And furthermore, you know, writing code,
they have argued, is a free speech right, and so
prosecuting it led to a great deal of criticism against
the Justice Department from the industry, and so part of
this memoir appears to reflect that feeling that developers, that
(25:42):
those who are writing code, that those who are creating
in this space were potentially being targeted in ways that
were unfair. But you know, equally, the question and becomes
what happens when you know the entire enforcement approach is
geared towards scaling back, especially when the industry is now
becoming mainstream, when every day users are looking to get
into crypto in a big way, when it's being encouraged
(26:04):
as a very mainstream activity for Americans, spy an administration
that's really backing this industry, and the industry is coming
into its own.
Speaker 1 (26:12):
At this point, it seems like something may fall through
the cracks. Thanks so much for being on the show.
That's professor Yasha Yadiv of Vanderbilt University Law School coming
up next. Trump cuts labor mediators from one hundred and
forty three down to four. This is Bloomberg. The Federal
(26:33):
Mediation Conciliation Service is a small labor agency that has
played an outsized role in some of the nation's largest
workplace negotiations over the last several years, including those at Starbucks, Boeing,
and Apple. But now the Trump administration has gutted the
FMCS of nearly all its labor mediators, endangering a key
(26:57):
means of resolving employer union conflicts, driving up negotiation costs
and potentially leading to more strikes and lockouts. Joining me
is Bloomberg Law reporter Parker Purifoid. Parker tell us about
the Federal Mediation and Conciliation Service.
Speaker 5 (27:14):
It was, you know, kind of a small agency and
its main role was to provide mediators to employers and unions.
They do both public sector and private sector work, so
they send mediators in when there's some kind of dispute
over a contract or grievance or something like that. They'll
(27:38):
try to get the parties both on the same page.
Speaker 1 (27:41):
There are one hundred and forty three mediators before Trump
took office. How many are there now?
Speaker 5 (27:48):
There are four lefts now, from what we can tell
from speaking to employees there, The administration gave various offers
for early retirement and sent to or other like more
buy out structured incentives to leave. So we know that
some of the mediators took those incentives to leave the
(28:09):
administration and then the rest after that were laid off.
So they're on administrative leave right now, and then they'll
be kind of rolled into the reduction enforce procedures and
laid off.
Speaker 1 (28:24):
Explain how the mediation service has been crucial in preventing
and ending strikes in recent years. Tell us about some instances.
Speaker 5 (28:34):
Yeah, I always say that they kind of fly under
the radar because no one really talks about them. Reporters
don't talk to them, like they're not quoted in any
of these big stories. But they are on hand a
lot in these, you know, really big labor disputes. So
one example was the strike between Boeing and their machinists
(28:58):
last year. The fm CS mediators were on hand for that,
and also, as I'm sure you can recall, there's been
some contract disputes with the dock workers in East and
West Coast ports over the last couple of years, and
the mediators were also on hand during that. Another examples
that they helped facilitate a first contract between Apple and
(29:22):
some of its retail workers up in Thousand, Maryland last
year as well in twenty twenty three, they helped negotiate
almost twenty five hundred collective bargaining negotiations, so they're involved
in quite a lot of them.
Speaker 1 (29:37):
Jefferson Diedrich and FMCS commissioner said in March twenty sixth
post that it saved the economy over five hundred million
annually with less than one hundred and fifty mediators and
point zero zero one four percent of the federal budget.
So this was a tiny agency comparatively, right.
Speaker 5 (29:59):
I think it's budget was somewhere in the ballpark of
fifty to seventy million dollars, so really tiny compared to,
you know, most of the other agencies. But yeah, as
Jefferson said in his post, they certainly have kind of
an outsized impact on the economy when you think about
all of the work that they do to prevent strikes
(30:20):
that could be you know, crippling to the economy.
Speaker 1 (30:23):
Has the effect of this been felt yet.
Speaker 5 (30:27):
Yeah, definitely. I actually spoke to a number of attorneys,
mostly in the in the private sector, who said that
they found out about the layoffs because the mediators that
they were working with in their you know, current negotiations
had to leave the bargaining table because they were told
(30:47):
that they were laid off. One concrete example is Starbucks
and Starbucks Workers United has been involved in kind of
a month long negotiation process to try to come up
with a framework for bargaining their contracts, and their negotiations
were being mediated by FMCS mediators, and one of the
(31:09):
two of their mediators were laid off and pulled off
of the table. But I think that more than that,
I have heard a lot of anxiety amongst attorneys in
the last couple of weeks who say that now they're
going to have to look to getting private mediators, and
they're going to have to split the costs, you know,
(31:30):
the employer in the union are going to have to
split the cost of the mediators, and so all of
this is just going to drive up the cost of
negotiations and also bring in more potential for strikes or
lockouts or other eventualities like that.
Speaker 1 (31:47):
What happens in the public sector where some federal and
state agencies are contractually required to mediate through fmcs, So
what would happen there?
Speaker 5 (31:59):
Yeah, I think it's pretty fact specific, but like you said,
a lot of state and federal agencies have to involve
an FMCS mediator somewhere in their process before they can
go to either like arbitration over a dispute, or in
the federal sector, when a union is trying to negotiate
(32:23):
a contract and they're having a difficult time reaching an
agreement with the government, the mediator will step in try
to mediate that dispute. If the mediator can't you help
them reach an agreement, then the mediator needs to sign
off in order for the dispute to go before a
panel who will ultimately decide what the terms of the
(32:45):
agreement are. So this is kind of just placing, i
would say, even more significant roadblocks for the public sector
because they are contractually obligated to seek the approval of
FMCS mediators and now that you could potentially take months
or years to do that. Now that there are only
(33:06):
four mediators available for the whole country.
Speaker 1 (33:10):
Can other agencies within the federal government fill in the gaps,
like the NLRB.
Speaker 5 (33:17):
So the NLRB legally cannot use any of their money
that's been appropriated by Congress to pay for mediation services.
A lot of times, the NLRB will help connect parties
to fmcs, but the NLRB cannot do that themselves. The
(33:37):
Labor Department has been involved a little bit. Labor Department
officials will frequently, I guess, get involved in some of
these higher profile strikes or contract disputes, like under the
Biden administration, Acting Labor Secretary Julie Sue would go out
to negotiations pretty frequently to help negotiate. But you know,
(34:01):
I think taking up all of the work that FMCS
and just folding it into the Labor Department. What I've
heard from sources is that that is not a feasible
option at this point.
Speaker 1 (34:14):
A coalition of twenty one states sued the Trump administration
last week over laying off staff and reducing the functions
of seven federal agencies, including the FMCS. What are the
grounds for that lawsuit?
Speaker 5 (34:29):
The states are basically alleging that the actions by the
administration are having adverse impact on the states. So the
states do mentioned in regard to the fmcs. They mentioned
that a lot of their state agencies need to go
through fmcs and if they were to have to engage
(34:50):
with private mediators that that would place a large financial
burden on the states to do so. And yeah, they're
basically alleging that the agencies, not just FMCS, but these
other small agencies, were created by acts of Congress, and
they believe that the president can't just unilaterally essentially get
(35:12):
rid of them.
Speaker 1 (35:13):
Is the FMCS just one agency among many that has
been targeted or do people say that it's been targeted
because it has to do with labor and labor unions,
which the Trump administration has also targeted.
Speaker 5 (35:30):
I mean, I think, you know, the federal government is
being pretty unprecedented level of layoffs. Certainly, Trump has stated
and has indicated that he is willing to do everything
that he can to, you know, reduce what he says
is administrative blowed and fraud and wasting of taxpayer dollars.
(35:53):
But certainly FMCS is only one of the labor agencies
that has been impacted. Trump also fired one of the
NLRB members right at the beginning of his term, along
with members of other agencies that resolve disputes within the
federal government. So certainly, many of the labor side attorneys
(36:16):
that I talked to say that this is a deliberate
targeting of the labor agencies in order to kind of
remove workers' ads towards getting recourse, you know, in any
of these these actions.
Speaker 1 (36:30):
According to an agency fact sheet, FMCS was involved in
two thy four hundred sixty seven collective bargaining negotiations, one
two hundred and sixty five high impact grievance mediations, and
conducted one thousand, five hundred and sixty six training programs
in twenty twenty three. Thanks so much, Parker. That's Bloomberg
(36:53):
Law reporter Parker Purifoy. In other legal news, at the
Justice Department, we're Attorney General Pam Bondi's has coincided with
the removal or reassignment of a growing number of career officials.
According to Bloomberg sources, the Justice Department removed the acting
National Security head from his post hours after Bondie saw
(37:15):
a portrait of former President Joe Biden continuing to hang
in the division's front office. This happened in February, just
weeks after Devin de Backer was elevated to serve as
the acting chief of the National Security Division. He's a
former associate White House counsel during the first Trump administration.
(37:36):
His devotion came the same day BONDI saw the portraits
of Biden, former Vice President Kamala Harris, and former Attorney
General Merrick Garland still on the wall. And that's it
for this edition of The Bloomberg Law Show. Remember you
can always get the latest legal news on our Bloomberg
Law Podcast. You can find them on Apple Podcasts, Spotify,
(37:57):
and at www dot bloomberg dot com com slash podcast
slash Law, And remember to tune into The Bloomberg Law
Show every weeknight at ten pm Wall Street Time. I'm
June Grosso and you're listening to Bloomberg
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