ContractsProf Blog

Strike News

OCU 1L Megan Neaves could not chow down to her weekly pad thai dinner with boyfriend Zeke and cat Jiji (right), without sharing with me their curiosity about the International  Longshoremen's Union strike on the East Coast. Would their supply of rice noodles and tamarind juice be affected should the ports shut down? Would Jiji have to make do with cheap domestic toys rather than the trinkets and baubles made redolent with the exotic catnip he orders imported from the dark web?

The threatened strike of the longshoremen could have caused major economic ripple effects on the eve of a Presidential election. A lengthy longshoremen's strike would have affected supply chains for perishable goods, like bananas. I hadn't realized just how crucial the banana supply is to our economy, but for some reason, all the reporting mentions bananas. The Daily Show reported that people responded to the strike by panic-buying toilet paper, perhaps just feeling nostalgia for the early days of the pandemic. But we produce our own toilet paper here in the USA, so there really is no reason to hoard it. I'm not judging, but I wish people would stop threatening to shiv me for just browsing in the paper-supply aisle at Costco.

I'm not sure how much of The Daily Show's reporting on this topic is accurate, but it does give a good taste of the issues, starting at around 1:30 in the clip below.

At the heart of the longshoremen's negotiations with management is the thing that might threaten our way of life more than the success of either candidate in the Presidential election: AI. Workers are concerned that their numbers will be reduced due to automation. Happily for us, as Peter Eavis reports in The New York Times, after a three-day work stoppage, the 45,000 union members have returned to the bargaining table, extending their existing contract through January 15th. So this may be one headache that the next President may inherit, or it may be another thing that the current President quietly attended to and for which he will get no credit.

I have seen people on Twitter likening dockworkers to elevator operators. The implication is that only corrupt union power is standing between us more cost-efficient ports. I doubt that the people who write such things know much about what it takes to unload a container ship, but then, neither do I. I do know that people on Twitter also suggest that professors can be replaced with automated learning and that all of education should move online with automated content, in the form of either AI-generated material or pre-recorded lectures that could have medium-to-long shelf lives. That day may come, but if our experience during COVID is any indication, it is still a long way off.

It looks like the parties have agreed to a 62 percent wage increase over the next six years. This would bring their wages more or less in line with those of West Coast longshoremen, who are represented by a different union. As indicated, automation is a key issue that still remains to be worked out. The union will not have won much of a victory if pay rises, but one-half to three-quarters of current workers are laid off due to automation. Industry-side advocates point out that union workers are already very well-paid, estimating that nearly 60% made over $100,000 in 2019-20, but I can't make the math work. The current high end of pay for the workers is $39/hour, so if they work 40-hour weeks that still has the top-paid workers making less than $80,000, assuming two weeks off. Perhaps they work a lot of overtime for higher pay, but if that is the case, we need more longshoremen, not fewer.

Meanwhile, as indicated in The Daily Show report above, the union has a colorful leader  in Harold Daggett. As the prolific Peter Eavis reports in The New York Times here, Daggett has been dogged by allegations of ties to the mob but also by allegations that he has not gotten good results for the workers. Now aged 78, it seems like he wants to capstone his career with a big union victory, and it seems like he will manage to do so.

As The Daily Show's reporting indicates, Mr. Daggett seems to reside in a Tony Soprano-style McMansion in Tony Soprano's home state. However, The Times reports the source of his income, a lavish union salary. I am not a fan of paying executives many multiples of what ordinary workers get, but Mr. Daggett's salary is far closer to those of the workers he represents than is the compensation of the corporate CEOs with whom he is negotiating. As Roman Roy put it, "First they came for the pjs, and I said nothing . . . " But here it is the opposite. We do nothing about the obscene amount of pay that corporate executives earn. On the contrary, when a court recently called into question Elon Musk's $56 billion pay package from Tesla, stockholders voted to award him $45 billion, notwithstanding evidence that the association of the company with Musk has harmed the company's brand. Why do we get so bent out of shape that a union executive is also well compensated?

In other union news, OCU 1L Vanessa Mendoza (left) alerted me to a strike on the West Coast. As Bill Kaczaraba reports for MyNorthwest.com, 33,000 Boeing  machinists have been on strike for nearly a month. It seems that workers were seeking a 40% wage increase over four years. Boeing has come up from 25% to 30%, but the talks have now stalled, it appears.

While the longshoremen have leverage in the form of the potential impact of their work-stoppage on the national economy, the effects of the machinists' strike may not be felt for some time. It may result in delays in the delivery of new aircraft, especially Boeing's strongest selling 737-MAX jets. But the impact on the workers is much more immediate. According to the work of Reuters reporters Allison Lampert and David Shepardson, available on USA Today, Boeing has cut off the workers' health insurance and benefits as of September 30. The union is trying to raise funds here to tide workers over  until a new contract can be negotiated.

Matthew Sluka: More NILs; More TroubILs

I expect that college athletics contracts are going to be the single most popular topic for student notes for the next five years at least. Two students came to me with the same story.  They are Nathan Vann (below left) and Ryan Collins (right). Both have allowed me to use their names and images in exchange for the glory of having their enthusiasm for contracts evidenced on this blog.

It's a refreshing story about how providing support for young athletes enable them to pursue their dreams of university education.

No, it's not that.

It's a refreshing story about how the NCAA's rules allowing student athletes to benefit from  Name, Image, and Likeness (NIL) deals is facilitating support for the students who make college athletics so fun and exciting.

No, it's not that either.

According to Pete Thamel and Adam Rittenberg, writing on ESPN.com, UNLV quarterback Matthew Sluka has left his team after three games because the athletics supporters, also known as the "UNLV's collective," who made oral pledges of an NIL deal did not deliver. Mr. Sluka was allegedly promised $100,000, but the team's head coach refused to honor the promise, which was oral and did not come from him but from an assistant coach.

The news coverage of this story makes much of the fact that that promise was oral, but that is only relevant for evidentiary reasons. Contracts only have to be in writing if they are within the statute of frauds, and this contract was not. It would have to be in writing the parties were contemplating that Mr. Sluka would be UNLV's quarterback for many years, but he only has one year of eligibility remaining. And the team's head coach seems to have acknowledged that the promise was made by the offensive coordinator, so we don't really have an evidentiary problem.

We do have an agency problem. Likely the assistant coach would not have actual authority to bind the university, but he might have apparent authority. However, because players are paid by collectives rather than by universities, it may be that he lacked even that. I suppose it depends on what a college athlete in Mr. Sluka's position would be expected to know about the way these deals are structured. I suspect that they know a hell of lot more about this world than I do, and Mr. Sluka was represented by an agent. Would a reasonable agent know that an assistant coach can't promise $100,000 on behalf of the collective?

The collective paid Mr. Sluka $3000.  UNLV paid Mr. Sluka $3000 for moving expenses. Mr. Sluka's agent for some reason acknowledges that the only "formal offer" from UNLV was $3000/month for four months. Believing he was entitled to more, Mr. Sluka threatened to quit if UNLV and its collective did not make good on their alleged promises. UNLV does not respond kindly to threats. According to ESPN, it "interpreted these demands as a violation of the NCAA pay-for-play rules, as well as Nevada state law."

Under NCAA rules, Mr. Sluka, having played only three games, can "redshirt" and thus preserve his eligibility for another season. According to an earlier ESPN.com report, he had already been at Holy Cross for four years before coming to UNLV. I guess it doesn't matter if it takes a quarterback six years to graduate college. [Update: an alert reader pointed out that Mr. Sluka already got his undergraduate degree from Holy Cross; he is now pursuing a graduate degree.] None of the reporting mentions Mr. Sluka's course of studies, his major, or what he would like to do with his college degree, assuming he does not become a professional athlete. He does not seem to be attending college with the primary aim of getting an education.

It's all very confusing. Where was Mr. Sluka's agent when it came time to formalize the promise? To make matters more confusing still, the NCAA, in an attempt to head off an antitrust suit, seems poised to allow colleges to pay their students directly, eliminating the need for "collectives." That's probably a good thing, because it seems very likely that the NIL agreements are really just means for allowing local boosters to pay student-athletes, disproportionately football players, it seems, to attend particular schools. That model, one can imagine, creates a complicated relationship among coaching staffs, players, and boosters, with the latter suddenly assuming a position similar to that of equity investors. For example, Kalan Hooks reports for ESPN that car dealerships are frequent sponsors of NIL deals. But at the University of Utah, eighty-five football players on scholarship received leases for pickup trucks.

OKCU 1L Nathan Vann shared with me the additional news that, as Mike McDaniel reports in Sports Illustrated, the CEO of a local resort and sportsbook offered to pay $100,000 to Sluka to keep him at UNLV. Consistent with its previous position that paying Mr. Sluka would violate NCAA rules and Nevada law, UNLV declined the offer, also noting that Mr. Sluka had already left the team. If a sportsbook is what I think it is, I can certainly imagine no negative externalities if such entities were placing bets in the form of NIL contracts on the players on whose performance they were also taking bets.

In its first game without its star quarterback, UNLV won by a score of 59-14. The backup quarterback completed 13 of 16 passes for 182 yards and three touchdowns.  He also rushed for 119 yards and a touchdown. Rebel fans will have to hope that he doesn't start looking around for an NIL deal.

We wouldn't have this problem if we in the United States were just normal about sports and did not think of universities as bloated justifications for semi-pro leagues funded by boosters' donations. No other country in the world does sports this way, people! We want young athletes to have access to higher education, but if we had real development leagues, such young athletes could pursue their professional dreams and get paid sufficiently to also attend universities if that's what they wanted to do. They could do so either as part-time students or, after their careers, when they were older and better able to get the most out of the educational experience.

Universities could still adopt local teams as though they were their own. After all, many big-time college sports programs are based in small towns that would not be able to attract a sports team if they were not college towns. Here, in Oklahoma, the most popular teams are located in Norman and Stillwater. They could continue to be there, even if those teams were part of the "SEC Development League" or whatever. Just for starters, that would save Oklahoma taxpayers $15 million because they would no longer have to pay the salaries of the head coaches at those schools. Or perhaps that money could be put to some use at those universities in the form of scholarships for deserving students or resources to serve their educational needs.

I just had to say it. As you were.

Troubling Case of an Anthropology Professor Fired for Pro-Palestinian Speech

Maura Finkelstein (left) was, until recently, a tenured anthropology professor at Muhlenberg College. She is Jewish, but she is also fierce critic of Israel and a supporter of Palestinians. Her Twitter and BlueSky accounts are about little else. As far as I can tell, her scholarship is about other things, but she taught courses at Muhlenberg College on Palestine, so her commitment to Palestine did not prevent her advancement, even at a college whose student body is 30% Jewish.

According to Ryan Quinn, writing for Inside Higher Education, in May, Professor Finkelstein became the first professor to be fired for pro-Palestinian speech since October 7th. She is appealing the decision and is still being paid by the College. The speech occurred on Professor Finkelstein's Instagram page in January. She reposted the following statement by a Palestinian poet:

Do not cower to Zionists. Shame them. Do not welcome them in your spaces. Why should these genocide loving fascists be treated any different than any other flat out racist. Don’t normalize Zionism. Don’t normalize Zionists taking up space.

There seems to have been a coordinated campaign against Professor Finkelstein. The College came under pressure from multiple directions. A complaint, referencing Professor Finkelstein, was filed against the College with the Department of Education. The College and media outlets were deluged with thousands of automated e-mails about Professor Finkelstein.  What the reporting thus far does not reveal is any evidence of student dissatisfaction with Professor Finkelstein or her teaching. She awaits a hearing on her appeal. The College won't talk about personnel matters. nor will any of the faculty members who recommended firing Professor Finkelstein comment. None of that is surprising.

Muhlenberg College, by Duempel, CC BY-SA 3.0 

The AAUP is alarmed, and Graham Piro, the faculty legal defense fund fellow at the Foundation for Individual Rights and Expression, calls Professor Finkelstein's firing "extremely disturbing." So far, everyone is talking about academic freedom, but nobody is addressing the role of contracts in securing such freedom. We really have some work to do getting language into faculty handbooks that expressly acknowledges contractual elements of tenure and provides real-world protections for faculty members who speak their mind in ways that their colleagues find alarming or off-putting.

I am not a "I do not like what you say but I will fight to the death for the right to say it" person.  I don't think it factually accurate to imply that all Zionists are genocide-loving fascists. I don't think responsible adults, let alone faculty members, should promote such views. I will not fight to the death for Professor Finkelstein's right to do so. But if having tenure confers on faculty members significant freedom to speak their minds, especially when one does so outside of the context of one's professional responsibilities, then those rights ought to be protected in the manner of any other rights that arise through private legislation.

Friday Frivolity: Arizona Couple Excluded from Mickey Mouse Club

Thanks to OCU 1L Lynne Neveu (left) for sharing with me this cringe-inducing story. According to Seth Abramovitch of The Hollywood Reporter, Scott and Diana Anderson are both sixty, and they have been together for forty-four years. They own a golf course in Arizona.

Little known to those of us who think of Disney parks as places to take the children for occasional trips, Disney has an exclusive venue for Disney VIPs (that is, people who shell out a lot of money) called Club 33. The Andersons worked at it for twelve years before they were invited to join the Club, and they paid $50,000 (or $40,000, the story is not entirely internally consistent) for their first year of membership. Club 33, in case you were wondering, is located above the Pirates of the Caribbean ride, and they serve hard liquor there, a fact that will play a role in the rest of our story.  There is also a venue in California Adventure called the 1901 Lounge -- I hope that's because there you can also get absinthe and laudanum, or perhaps some old timey Coca Cola with all the original ingredients, but I digress. The Andersons visited these elite establishments upwards of eighty days a year.

But then tragedy struck. Mr. Anderson was cited for public intoxication at one of the venues. He protested that his symptoms were explained by a vestibular migraine brought on when he had a sip or two of red wine. Disney expelled the Andersons from the club forever. To make matters worse, Disney had Snow White's stepmother (right) deliver the news. The Andersons claim that Disney was retaliating against them for having accused another Club member of sexual harassment.  $400,000 in legal fees later, a jury sided with Disney.

Initially, it seemed that the Andersons were going to continue to fight, but now they have decided to take the high road. The article in The Hollywood Reporter includes a lengthy, dishy interview with the couple. Some highlights include:

• Annual fees for membership is $32,000, which the Andersons, who spent twelve times that amount trying to say in the Club, now say is "just insane";
• "Club 33 is really a glorified annual pass";
• And yet, Club members get booted out if Tom Hanks decides to have Thanksgiving Dinner at the venue, and don't get them started on Katy Perry!

And then the real dishy stuff begins:

• Club members get up to 100 park tickets, which they (not the Andersons, of course) then sell to Muggles;
• Club members (not the Andersons, of course) raid the Club for the latest merch and then sell it to . . . Muggles;
• Club members used to have access to Walt Disney's rooms, with original furnishings, and they could even use his bathroom, but now it is all roped off (I wonder why . . . ) and the furniture has been replaced with replicas;
• "It's a cult, and Walt's the messiah," say the couple, who brag about using Walt's toilet.

The couple had been disciplined by the Club before. After a member of their party knocked over a drink, the Club refused to offer them any more alcoholic beverages. Mrs. Anderson had words, at least one of which began with "f," with the manager, which resulted in a suspension.  Was Mrs. Anderson drunk? Impossible! Because "everyone knows" that she waters down her drinks.

Heard enough? Imagine how the reporter feels.  The interview, which I have reduced to bullet points, had already been edited for length and clarity and still was the length of a short Bildungsroman. And yet I still have so many follow-ups!

And that's the news from the Happiest Place on Earth, where the men are strong, the women's drinks are watered, and the children . . .  are not allowed entry.

Exploitative Contracts for Foreign Care Workers in the UK

According to Kiran Stacey, reporting in The Guardian, there has been a sixfold increase in the past three years in the number of complaints by foreign care workers that they are trapped in exploitative contracts.  The number of such complaints is still small (134), but the nature of the exploitation is an interesting sign of the times. Working on what seems like an analogy to Training Reimbursement Agreement Provisions (TRAPs), employers are demanding large payments to cover "hiring costs,"  as high as £10,000, when workers try to leave their jobs.  

One consequence of Brexit was that it suddenly because much harder to find social care workers.  The Tory government tried to stop the bleeding with a band-aid, making it easier for foreign workers to serve in the sector, and the number of foreign workers increased from 10,000 to 94,000.  The sector grew too quickly for the government to monitor all of the practices involved.  According to The Guardian, "The Gangmasters and Labour Abuse Authority reported that it received 123 reports of modern slavery and human trafficking in the care sector in 2023 and that the sector accounted for more than half of all reports of forced labour."

I wish the story had provided some examples of the contractual language at issue. Does the contract have language indicating that there is an obligation to reimburse "hiring costs" in cases of early termination of the contract?  That is a tricky issue. I don't know what UK law has to say about the enforceability of such provisions.  If there is no provision and employers are using threats of deportation to extort payments, that seems much more clearly unlawful.

Two District Courts Weight in on the FTC's Ban on Non-Competes

Back in April, we posted about the new Federal Trade Commission (FTC) rule that bans most non-competes and may also ban some other restraints on the ability of employees to leave their jobs.  The response was quick and predictable.  Ryan, LLC v. Federal Trade Commission was filed pretty much immediately in the Northern District of Texas.  ATS Tree Services, LLC (ATS) filed its claim in the Eastern District of Pennsylvania two days after the new rule was promulgated.

The Ryan court struck first, issuing a preliminary injunction in early July.  The Eastern District denied ATS's motion for a preliminary injunction in ATS Tree Services, LLC  v. Federal Trade Commission in late July.  Then, on August 20th, the District Court in the Ryan case granted Ryan's motion to set aside the non-compete rule and enjoined it from going into effect on its effective date of September 4th or thereafter.

In the Pennsylvania case, ATS claimed that it would be irreparably harmed if it could not require that its employees sign non-compete clauses prohibiting them from working for rival tree-trimming services for one year after leaving ATS.  ATS claimed that is non-compete clause is necessary to enable ATS to recoup its investment on the specialized training that its employees receive.  ATS argued that the FTC either lacked regulatory power to ban non-competes or exceeded that power.  In the alternative, ATS argued that the ban was arbitrary and capricious.  If none of those things are true, ATS maintained that the FTC Act is an unconstitutional delegation of legislative power to the agency under the major questions doctrine.

In denying ATS's motion for a preliminary injunction Judge Hodge (left) first found that ATS would suffer no irreparable harm from the non-compete ban.  Moreover, she concluded that ATS had not established that it would likely win on the merits.  ATS could not establish irreparable harm because its alleged losses were either de minimis or in any case insufficient to amount to irreparable harm.  Moreover, ATS  failed to make a credible factual  allegation that there was any danger that it would lose employees once the ban goes into effect. 

Judge Hodge was no more impressed with the somewhat exotic argument that the rule would strip ATS of its contractual rights.  She did not find any binding caselaw endorsing the argument that loss of contractual rights amounts to irreparable harm. To the extent that the harm related to employees using their ATS training to benefit rival businesses, she did she not see why ATS could not protect its contractual rights through the less onerous mechanism of non-disclosure agreements.

On the merits, Judge Hodge was satisfied that the FTC had power to enact the law and that doing was was not arbitrary and capricious.  She also found that the FTC had previously issued equally sweeping rules without implicating the major questions doctrine and that this situation was thus distinguishable from recent cases in which SCOTUS invoked that doctrine.  Finally, Judge Hodge rejected ATS's argument based on Schechter Poultry  because it's not 1935, or at least not yet.

Things went differently before Judge Brown (right) in the Northern District of Texas.  Having already granted the motion for a preliminary injunction, it is hardly surprising that Judge Brown went ahead and granted the full injunction.  Unlike her preliminary injunction, however, which applied only to the named plaintiffs and intervenors, this injunction is nationwide.

She granted the motion for an injunction on multiple grounds.  First, she concluded that the FTC  lacked substantive rule-making authority with respect to unfair methods of competition and thus lacked authority to create the non-compete ban. In addition, Judge Brown found that the FTC acted arbitrarily and capriciously in creating the ban.  She found that the ban was "based on inconsistent and flawed empirical evidence," and that the FTC failed to consider the upside of non-compete agreements, disregarding substantial evidence supporting such agreements.  Just as Judge Hodge chided ATS for failing to consider how it might use devices other than its sweeping non-compete to protect its investment in its employees, Judge Brown faults the FTC for failing to consider less sweeping alternatives to the ban it imposed.  Having ruled on statutory grounds, Judge Brown did not address Ryan's constitutional claims.

Both opinions are persuasive in their own terms and they reach their conclusions categorically and without acknowledgment that the case is a close one.  It is challenging for a non-expert in administrative law to know which judge got it right.  My hunch is that this challenge would have been dismissed without much fanfare in the period between Schechter Poultry and the Roberts Court, and I suspect that an opinion like Judge Brown's would have been hard to imagine before Gundy. It may also be that executive agencies have gotten much more ambitious in this era of Congressional gridlock.  And so perhaps rules like this one were relatively rare before, say 2009.

Update from St. Thomas University School of Law

Two weeks ago, we reported on an attempt to dismiss a tenured law professor in a manner that did not accord with the procedural rights created by the university's faculty handbook.  She sued for wrongful termination.

Last Thursday, Julianne Hill, writing for the ABA Journal reported that St. Thomas University has now reinstated Professor Lauren Gilbert but also has initiated termination proceedings against her.  In its reinstatement letter, the University reiterated its view that Professor Gilbert's acts of "insubordination" justified termination, and it added a new, unspecified charge of an "inappropriate relationship" with a student.  In response, Professor Gilbert's attorney has promised to add a defamation claim to her suit against the university.

The University seems to have handled this episode with unique incompetence. The original termination letter cited a university handbook for staff that it claimed governed its relationship with Professor Gilbert in relevant part. Its decision to reinstate her and to follow the procedures set forth in the faculty handbook suggests a total abandonment of that position, which ought to be a matter of considerable embarrassment to university counsel or outside counsel or both. 

The charges added to the reinstatement letter are extraordinarily odd.  Her termination letter cited Professor Gilbert's failure to attend graduation (with notice but without permission) as another "act of insubordination by you."  If the University was going to cite petty offenses, it might have mentioned conduct that, standing alone, would justify for-cause termination.  If, as Professor Gilbert contends, there is no basis for the allegation, the University has, at the very least, created another legal issue that will increase its costs or perhaps increase what it will have to pay to settle the matter.  

Meanwhile, because Professor Gilbert has been reinstated, she will continue to draw her salary and benefits.  However, because of the University's rather outré claim that she constitutes a threat to endanger the community and/or students, she cannot teach or even set foot on campus.  Assuming that the grounds in the original termination letter were the best justifications that the University could concoct for the summary dismissal of a tenured professor, Professor Gilbert deserves a better academic home.  But because the University has now conceded that she is entitled to full salary and benefits until the appropriate termination process is completed, she has some time to find one.

George Santos Sues Jimmy Kimmel Over Use of Cameo Video

Not a great week for George Santos (left).  First, he had to plead guilty to wire fraud and identity theft. Now, he has lost his case against Jimmy Kimmel.

What do you do when you have been expelled from the House of Representatives and your campaign for re-election as an Independent has failed?  One option is to capitalize on your notoriety by posting personalized videos through Cameo.  Rudy Giuliani does it. Rod Blagojevich does it.  Why shouldn't George Santos do it?  According to The Guardian, the money is good, and Mr. Santos has bills to pay.  As part of his plea agreement, he has to pay $375,000.

There is one down-side, of course.  Some mean-spirited people might use the videos to make fun of Mr. Santos.  According to the allegations of the complaint, that is what Jimmy Kimmel and his co-defendants did. Under the "guise of fandom," the defendants intentionally deceived Mr. Santos, broadcast his videos on television in order to demean and humiliate him, and then bragged about how it would be a "dream come true" if Mr. Santos were to sue, alleging fraud.  Well, Mr. Santos knows a lot about fraud, and he did not hesitate to make Mr. Kimmel's dreams come true.

Mr. Santos filed suit in Santos v. Kimmel in February, alleging copyright infringement, fraudulent inducement, breach of contract, and unjust enrichment.  The Complaint concedes that Cameo users can request videos licensed for personal or business purposes.  However, Mr. Santos claims, neither license permits the national broadcast of the videos.  Using pseudonyms, Mr. Kimmel allegedly created fourteen fake Cameo user accounts and solicited different personal videos from Mr. Santos for those fake accounts.  Mr. Santos claims to have provided videos for these accounts, subject to licenses for personal use.  Mr. Kimmel then broadcast five videos on his show, Jimmy Kimmel Live, and on various social media accounts in a segment he called "Will Santos Say It?."  The answer, in every case is yes.  Some examples are below, starting at around 6:50 in.  Kinda lame actually.  Not great comedy.  Whatever.

Mr. Kimmel moved to dismiss the complaint, and Mr. Santos then amended the complaint.  I have not been able to find a link to the amended complaint online. Mr. Kimmel then renewed his motion to dismiss.  On August 19, the District Court dismissed the complaint based on the fair use doctrine.  Mr. Santos's claims for breach of an express or implied contract were duplicative of his copyright claims and thus were also subject to dismissal.

Disney, Contracts of Adhesion, and Arbitration-Clause Bootstrapping

Disney is in the news this week, and not in a good way.  For the truly awful facts of the case, you can't do better than Emily Crane's and Alexandra Steigrad's reporting in the New York Post here and here.  In short, Dr. Kanokporn Tangsuan had severe allergies.  She ate in a Disney restaurant.  She informed the restaurant of her allergies and the restaurant staff gave repeated assurances that her food was allergen-free.  Soon after her meal, she was dead, and an autopsy revealed that her death was caused by allergens. 

Okay, those are terrible facts. But what's going on with arbitration clauses in contracts of adhesion is, perhaps less dramatic, but still highly concerning.  Christopher Leslie has described what he terms "arbitration bootstrapping."  Professor Leslie defines bootstrapping as the corporate practice of loading "mandatory arbitration clauses with unconscionable contract terms."  Richard Frankel has published a thoughtful response here.  Increasingly, we are seeing a new form of arbitration bootstrapping; let's call it "arbitration-clause bootstrapping."  Once a consumer has "agreed" to an arbitration provision through one interaction with a business entity, that entity then tries to apply that same arbitration provision to some completely unrelated interaction with the entity.  I've been stockpiling posts all summer, and I keep on coming across these situations.  Earlier in the summer, we wrote about Andrea Boyack's scholarship on abuse on contract, and there's plenty more where that came from.

Image by DALL-E

So, getting back to the case, when Dr. Tangusuan's husband, Jeffrey Piccolo, sued Disney for negligence, Disney responded with a motion to compel arbitration.  It did so on two grounds.  First, Mr. Piccolo years ago signed up for a trial subscription to Disney +, and when he did so he "agreed" that all disputes should go to arbitration.  Second, one month before his wife's death, Mr. Piccolo bought tickets to the Epcot theme park using the "My Disney Experience" app, which also has an arbitration provision.  So, Disney's argument seems to be if you "agree" to arbitration with respect to one transaction with the company, you are agreeing to arbitration with respect to all interactions with the company.  And, as Christopher Leslie's scholarship suggests, that arbitration provision can be used to bootstrap additional terms, that otherwise might not be enforceable, into the parties' "agreement."  As Andrea Boyack's scholarship illustrates, consumers do not read the boilerplate terms of contracts of adhesion, hence the scare quotes bracketing forms of the word "agree" throughout this post.  

You might wonder what's so bad about arbitration.  Substantively, there might not be any difference in this case.  Still, I can think of at least two reasons why Mr. Piccolo and his attorneys might prefer litigation.  First, they might trust a jury rather than an arbitral panel to appropriately value their claim.  Second, they might want the publicity associated with litigation to shine a spotlight on Disney's conduct.  Of course, Disney's arbitration-clause bootstrapping has not helped it to avoid publicity in this case.  Nonetheless, both of those reasons to prefer litigation are also reasons why the threat of litigation enhances the settlement value of the claim.

None of this might matter in this case.  Even if the court allows Disney to engage in arbitration-clause bootstrapping, it might not think that the arbitration clause applies in this case, given that the suit is being brought on behalf of Dr. Tangusan's estate, which never "agreed" to arbitration.

UPDATE: David Horton (left), who is either maddeningly youthful or really needs to update his website, has provided a link to Disney's motion to compel.  My post noted that the estate is not a party to an arbitration provision.  David adds that neither is the defendant in the case, Walt Disney Parks and Resorts, U.S., Inc.  David's forthcoming article Accidental Arbitration, which was on my summer reading list but is now on my urgent reading list, covers the subject matter that I have called arbitration-clause bootstrapping.  He speaks of it in terms of defendants attempts "to enforce ultra-broad arbitration agreements that nobody at the time of contracting could have foreseen would be relevant to the lawsuit."  It is a topic that he also addressed in his already-published article Infinite Arbitration Clauses.

Oklahoma Supreme Court Finds Contract for Catholic Charter School Violates the Establishment Clause

I mean, is anybody really surprised? This case was brought by Oklahoma's Attorney General, Gentner Drummond (right), a conservative Republican, who believes in the rule of law.  That quality has caused a series of clashes between the Attorney General and the more committed cultural warriors in his party. 

In this case, Oklahoma's Virtual Charter School Board (the Board) has exclusive authority to form virtual schools. In October, 2023, the Board voted 3-2 to approve a charter contract with St. Isidore, a charter school formed by the Catholic Archdiocese of Oklahoma City and Catholic Diocese of Tulsa. St. Isidore describes itself as an instrument of the Catholic Church committed to the Church's evangelizing mission.

The contract entered into between the Board and St. Isidore departed in key ways from the standard contract that the Board entered into with other charter schools.  While a typical  charter school must warrant that it is not affiliated with a sectarian school or religious institution, the contract with St. Isidore states that St. Isidore is affiliated with a sectarian school or religious institution.  Other charter schools have to be non-sectarian.  St. Isidore's contract specifically recognizes its right to freely exercise its religious beliefs and practices consistent with its religious protections.

On June 25th, in Drummond v. Oklahoma Statewide Virtual Charter School Board, by a vote of 7-1, with one Justice recused, Oklahoma's Supreme Court found that the Board's plan to allow for a publicly-funded Catholic charter school violates Oklahoma's constitution.  Six Justices also found that the contract violated the federal Constitution's Establishment Clause.  

The Supreme Court first concluded that the Board's contract with St. Isidore violates Article II, Section 5 of the Oklahoma Constitution, which reads:

No public money or property shall ever be appropriated, applied, donated, or used, directly or indirectly, for the use, benefit, or support of any sect, church, denomination, or system of religion, or for the use, benefit, or support of any priest, preacher, minister, or other religious teacher or dignitary, or sectarian institution as such.

That seems pretty clear, and Oklahoma courts have repeatedly construed this provision as prohibiting state funding for sectarian schools.  Consistent with the state constitution, the Act allowing for the creation of charter schools also requires that they be non-sectarian.

The Supreme Court next finds that St. Isidore is a state actor because of its reliance on state funding.  I'm not sure why this holding is even necessary to the outcome of the case, as the suit is brought in mandamus against the Board.  St. Isidore intervened.  The point of the case is that the Board should be enjoined from contracting with St. Isidore.  I suspect that finding St. Isidore to be a state actor is relevant to the Court's Free Exercise discussion, which I summarize in the next paragraph.

Finally, the Court turns its attention to the U.S. Constitution.  It first finds that the contract with St. Isidore also fails under the U.S. Constitution's Establishment Clause.  It next finds no violation of the Free Exercise Clause, notwithstanding the recent trilogy of SCOTUS cases allowing for public funding to flow to private sectarian schools for certain purposes.  The difference here is that St. Isidore would be a public school.

The ability to admit that one is wrong about the law has been excised from the DNA of many Republican politicians.  And so, Oklahoma's Superintendent of Schools, Ryan Walters, previously discussed on this blog here and here and here, without the benefit of any legal training, doubles down on his commitment to state-funded religious eduction, writing on Twitter:

It’s my firm belief that once again, the Oklahoma Supreme Court got it wrong. The words ‘separation of church and state’ do not appear in our Constitution, and it is outrageous that the Oklahoma Supreme Court misunderstood key cases involving the First Amendment and sanctioned discrimination against Christians based solely on their faith.

Mr. Walters cites to the lone dissenting Justice (whose opinion can be found here), who found that because St. Isidore is not a state actor, denying it the opportunity to run a virtual charter school violates the U.S. Constitution's Free Exercise clause.  Because the dissent finds that St. Isidore is not a state actor, the relationship between the Board and the school is purely contractual, and there is nothing unconstitutional about the state contracting with sectarian entities.  Moreover, following on recent SCOTUS cases allowing state funds to flow to sectarian schools, the dissenting Justice finds that the Majority's order that the Board rescind its contract with St. Isidore violates the Free Exercise Clause.

This is a cutting-edge argument and an opportunity to petition SCOTUS for review.  SCOTUS has gone quite far in eliminating the "play in the joints" that once characterized its understanding of the First Amendment's religion clauses.  It used to be that states could allow funds to flow to sectarian educational institutions, either to be used for non-sectarian purposes or indirectly by allowing students or parents to direct state fellowships or education vouchers to the schools of their choice.  Recently, SCOTUS has held that where public education funds are available to private non-sectarian schools, they also must be available to private sectarian schools. Will SCOTUS be willing to take the next step and allow for the creation of public sectarian schools?  Stay tuned.

Update: Forever War Means Forever Detention Without Trial

Last week, in a fit of irrational exuberance, I reported on a plea deal to resolve the cases against three of the architects of the 9/11 attacks on the United States.  That plea deal has now been scuppered through the usual combination of thirst for retribution, political posturing on the one hand, and lack of political will on the other.  In short, as Carol Rosenberg and Eric Schmitt reported in The New York Times yesterday, under pressure from relatives of the dead and the same knuckleheads who prevented the overdue closure of the Guantanamo detention center during the Obama administration, Defense Secretary Lloyd J. Austin, III cancelled the plea deals.  Families of victims who supported the deal suffered "emotional whiplash."

Millions of people who were  alive that day feel some special connection to the events of 9/11.  Mine is that I worked in the World Trade Center and watched my office building burn that morning from the street.  I made it home in time to watch that building collapse on television. I reflected on that experience here. The men responsible for that catastrophe need to have their guilt adjudicated in a court of law which can be a context for fact-finding and some sort of ending to our national ordeal. 

Because the George W. Bush administration engaged in systematic violations of the laws of armed conflict in the form of "enhanced interrogation techniques" universally denounced as torture and cruel, inhuman and degrading treatment, it will not be possible to have a fully satisfying adjudication of the perpetrators' guilt.  One of the five defendants is now unfit to stand trial, likely because the conditions of his detention rendered him so. Evidence gathered against the others may not be admissible because it was produced under conditions that render it of dubious reliability as a true accounting of the facts.

The plea deals were likely the only path forward towards some sort of final reckoning with these mass murderers.  That path is now foreclosed and the national shame of indefinite detention without adjudication of guilt will continue.  Inhumane treatment of the detainees will not bring back the dead.  It just heaps on top of a human tragedy a national disgrace which also provides fodder for the sort of hatred that fueled the attacks whose perpetrators, it seems, will never be held to account.

Friday Frivolity: Nutty Warranty Claim Against Cold Stone Creamery Can Proceed

It was as if Judge Gary Brown (right) of the U.S. District Court for the Eastern District of New York knew he was writing fodder for Friday frivolity.  Ruling on defendant's motion to dismiss purported class action claims arising from frustrated ice cream customers, he began with a citation to Van Halen, "They say all my flavors are guaranteed to satisfy." The opinion includes a liberal sprinkling of such citations. 

In general, I'm not a fan of jokey legal opinions, unless they are really well done, and they rarely are. It is not that there is no place for humor in a courtroom.  Part of the appeal of a Justice Scalia or a Justice Kagan is their wit. But it is another matter when a judge treats a claim as a joke or when an opinion scoffs at the serious legal wrongs alleged.

Here, the court's attempts at witticisms fall short.  Blogs can be serious without being solemn, but people bring lawsuits when they are genuinely aggrieved.  One ought to treat such claims with the sobriety they deserve.  And if the claims are not serious, wasting court resources also is not the stuff of jokes.  

In Duncan v. Kahala Franchising, the claims are borderline. Plaintiff alleges that Cold Stone Creamery's pistachio ice cream contains no actual pistachios. Rather, the pistachio flavor was produced through chemical means.  The complaint alleged violations of New York's General Business Law, §§ 349 & 350, which prohibit deceptive acts and false advertising, as well as breach of warranty claims. On the one hand, why can't the seller just be honest and fess up that is selling pistachio-flavored ice cream?  On the other hand, get a life!  It's not as though you ordered a kale smoothy as part of a cleanse regimen and received a St. Patrick's Day ice cream float instead.  You ordered ice cream; you got ice cream.  Did it taste good?

Other ice cream brands, readers may be relieved to learn, include actual pistachios in their pistachio ice cream, and Cold Stone Creamery's strawberry and banana ice creams include strawberries and bananas respectively.  The proposed plaintiff class provided survey evidence indicating that the vast majority of pistachio ice cream buyers expect it to contain pistachios.  

Interestingly enough, New York courts have developed a line of cases addressing allegations such as those at issue here in a line of cases relating to claims that food products were "vanilla."  In order to make out of a claim under §§ 349 & 350, courts consider:

(1) the presence or absence of express representations, (2) context of the alleged misrepresentation, (3) etymological analysis, (4) allegations about competitor products and (5) consumer survey evidence . . . 

Here, Cold Stone Creamery did not represent that its pistachio ice cream was "made with" or contained pistachios. However, the court was not impressed with the defendant's disclosure of its true ingredients online. Such disclosure is not helpful to a person who is just looking for a treat. 

By Stan Shebs, CC BY-SA 3.0

What the test calls "etymology" turns out to be more of a usage question.  In the vanilla cases, plaintiffs claims were dismissed, because vanilla is more of an adjective than a noun.  But "pistachio," when used as an adjective, is used to describe a color, according to the Oxford English Dictionary, so Judge Brown gives the edge on that one to the defendant.

Oh, please. Now, this opinion is actually pissing me off. A dictionary is a mirror.  If you hand it to a lawyer who has no background in linguistics, don't expect Paul frickin' Grice to peer out. "Pistachio" can also be used adjectivally to mean "pistachio-flavored," and the usage here undoubtedly related to flavor rather than color.  If the purpose of the name were to describe the ice cream's color, it might have been called anything from Avocado to Chartreuse to Lime to pea pod. Still, the fourth and fifth categories clearly favored plaintiffs, at least as to their allegations relating to the pistachio ice cream.

Given the joking tone, it is something of a relief that Judge Brown found that the proposed class had alleged sufficient facts to survive defendant's motion to dismiss, at least as to its pistachio-related claims sounding in §§ 349 and 350, as well as in breach of express warranties.  Plaintiffs made the same claims relating to other flavors but did not present the same kind of evidences relating to those other flavors.  In any case, plaintiffs produced no customers who were disappointed that, e.g., their butter pecan ice cream contained no butter.  All non-pistachio claims were accordingly dismissed.

Friday Frivolity: Constructive Firing in China

This isn't that frivolous, except that I learned of it through National Public Radio's comedic news quiz, "Wait, Wait, Don't Tell Me."

As reported by Yating Yang in the South China Morning Post, a company in China moved its headquarters from an urban center to a remote mountain top in order to get its employees to quit and avoid having to pay them severance.  The commute took two hours each way.  Employees who did not have their own vehicles had to take public transportation, a bus that ran only once every three hours, and then they had to climb a three-kilometer mountain path.  On their way home, often in the dark, they had to watch out for packs of stray dogs.  The facilities at the new location lacked basic amenities.  Female employees had to walk to the nearest village to use public toilets.

Image by Liuxingy, CC BY-SA 4.0  via Wikimedia Commons

Then, once 70% of the workers had quit, the company returned to its urban setting and began hiring new staff.  A company spokesperson claimed that the move was a cost-cutting measure and was always intended to be temporary so that the company could continue to operate while its main offices were being renovated.   Employees claim that they were told that the relocation would last an unspecified amount of time and could stretch into the new year.  The company claimed that it was considering legal action against the departing employees for damaging the firm's reputation. 

Although the story broke in January, I have found no updates.

University of California Sues Its Graduate Student Union

Just one week ago, I wrote about the University of California's union, which includes 48,000 graduate students and other employees engaged in teaching and research.  That post was about how the union has done amazing work winning significant wage increases for these workers who contribute with their minds rather than through physical labor.

But now, as Parker Purifoy reports here on Bloomberg, the University of California is suing its union to get them to stop rolling strikes on five of the University's campuses.  According to the complaint filed in the case (thanks, Parker, for including the link -- you are a model for your peers to emulate!), the collective bargaining agreement between the University and the Union prohibits strikes.  The Complaint alleges that the Union authorized the strike on May 17, and the strike began at the Santa Cruz campus on May 20.  Their mascot may be a banana slug, but they won this race!  The strike then expanded to UCLA, UC Davis, UC Santa Barbara, UC San Diego, and UCI.

The cause of the strike is itself a matter of dispute.  The Union communicated that it was to protest the University's unfair labor practices, but the strike communications almost all relate to the conflict in Gaza and demands that the University divest from Israeli companies.  With the UC system on the quarter system, and the quarter due to end in June, the strike threatens to interfere with the submission of grades, and thus the University alleges a threat of irreparable harm.  According to the Complaint, the UAW has stated that the aim of its strike is to “maximize chaos and confusion for the employer,” and a strike during the exam period is a good way to do so. Indeed, the complaint alleges that on each striking campus UAW members "have refused to teach classes, lead discussion sections, conduct research, or otherwise . . . perform their job duties." 

The complaint alleges only one cause of action, for breach of contract.  The University seeks an order enjoining all strike activities while the collective bargaining agreement is in effect.  It also seeks unspecified damages and attorneys' fees.

Politicians Can Do Quid Pro Quo Deals, Can Naval Officers?

Last term, SCOTUS decided two cases involving political corruption. In Ciminelli v. United States, the Court rejected New York's right of control theory as a tool in fighting corruption in government bid practices, as we discussed here and here. In Percoco v. United States, the Court reversed and remanded a conviction for violation of the federal "honest services" statute because jury instructions in the case were too vague. This builds on a line of cases going back to the Bridgegate case in which SCOTUS has made it increasingly difficult to prosecute political corruption.

In April, SCOTUS again indicated its willingness to make it difficult to prosecute politicians who receive kickbacks.  Snyder v. U.S. is about a former mayor of Portage, Indiana who was convicted in a kickback scheme.  He was found to have rigged a bid to favor a particular company and then to have approached that company demanding a payment of $15,000.  He received $13,000, which was characterized as a consulting fee for services yet to be rendered to the company.  In oral argument, the court seemed poised to overturn the conviction.  There was a lot of discussion in the oral arguments about the difference between a gratuity and a bribe, and the Justices seemed very concerned that honest politicians would be accused of bribery just for accepting a $100 Starbucks gift card.

Really?  I wouldn't accept a $100 Starbucks gift card from a student.  Why would a politician accept a $100 Starbucks gift card from a constituent to whom he is steering a contract if not as a bribe?  There might be nothing nefarious going on, but that is a matter of determining intent, a feat that is not beyond the capabilities of courts. It's just weird that the Justices have a hard time recognizing corruption when it's staring them in the face.  It's almost as if one of them had  accepted gifts that raised questions about their ability to remain neutral when the interests of the gift-giver are implicated in pending matters.

Last week's New York Times brings a story from Michael Levenson about the arrest of a retired naval officer based on allegations that seem quite similar to those in Snyder.  According to the Times, Robert Burke, once the second highest-ranking officer in the Navy, steered a government contract worth hundreds of millions of dollars to a company in exchange for a position with that company that guaranteed him a salary of $500,000 plus 100,000 stock options.  If the transaction in Snyder is held to be a gratuity rather than a bribe, this seems more gratuity than bribe.  Admiral Burke and his alleged co-conspirators have nonetheless been charged with bribery and conspiracy to commit bribery.  If the arrest leads to a conviction, it will be interesting to see if SCOTUS keeps up its string of standing up for officials accused of corruption. 

Non-Disclosure Agreements and the Public Interest

In 2019, David Hoffman and Erik Lampmann published Hushing Contracts, which among other things, specified the ways in which non-disclosure agreements (NDA) externalize the social costs of unsavory behaviors by corporations and their agents. They address the danger that NDAs can protect people against sexual harassment claims and may enable them to move from job to job despite a history of tortious or even criminal misconduct.

We posted eighteen months ago about the Speak Out Act, which rendered NDAs unenforceable with respect to allegations of sexual assault or sexual abuse. Stacey Lantagne (left) was posting about NDAs and sexual harassment on this blog long before then.  We have posted repeatedly about the limits of NDAs imposed on employees of the Trump campaign and the Trump administration. Last week, a new Trump NDA issue arose and a second one re-surfaced.

Previously, we have focused on NDAs in the #metoo and First Amendment (free speech) context.  The latest Trump NDA scandal has to do with his alleged use of the "n-word" in connection with the reality television series, The Apprentice. Former producer for the show, Bill Pruitt, published the details on Slate.  From my perspective, as someone who regards reality television as the monetization of the basest of human qualities, the story has a Leopards Ate My Face vibe to it. Mr Trump, whatever his virtues, is not known for his moral probity.  The 20-year NDA that threatened criminal sanctions for breach should have been a tip-off that this was not your usual work gig.  Is anybody surprised by this latest confirmation that there is no social convention that Mr. Trump will not flout? 

Well, I guess the pee tapes thing wasn't true.

It is common to ruminate in such situations whether it would have have made a difference if Mr. Pruitt could have come forward with his allegations at some point between the famous descent on the tacky gold escalator and the 2016 elections. As someone who, after the release of the "Access Hollywood" video, confidently predicted "he'll never be President," I can't very well say.  Perhaps with Mr. Pruitt's NDA expiring, others will also expire and we will benefit from a series of revealing anecdotes about Mr. Trump saying the sorts of racist, sexist, homophobic, etc. things he undoubtedly routinely says when the mikes are off and all auditors are gagged by NDAs.

But being offensive is his brand.  He's already been found liable for defamation in connection with a sexual assault, for fraud in connection with both his main business and his "charitable" foundation, and now he's been found guilty on 34 felony counts.  While there is some dispute about the application of this particular statute in these particular circumstances, I don't think anybody can doubt that the underlying conduct occurred and is not very Presidential.  So he used some salty language? Why would anybody care about that if they don't mind him saying that he will be a dictator on day one of his second term, if he gets one?

But I digress, the real question is whether public policy can or ought to ban NDAs that prevent people from reporting such offensive conduct. Hofmann and Lampmann articulate an expressive theory of NDAs, arguing that we should concern ourselves not only with the law's commands but with the messages legal actors send. If courts uphold NDAs that facilitate impunity for sexual predators, the law expresses indifference to the plights of the victims of sexual predators and to the problem of sexual predation more generally.  Beyond the use of an offensive racial epithet, here, arguably, Mr. Trump made a decision that had an adverse impact on someone's employment based on the potential employee's race.  Does it matter that the employment opportunity was part of a reality television show?  Would we want the law to set aside NDAs when they stand in the way of unmasking racists? How about if the racists later run for public office? 

The other Trump NDA news is that, as Michael M. Grynbaum reports in The New York Times, a NY appellate court ruled last week that Mr. Trump's suit against his niece, Mary Trump (her book is at right), can proceed.  [Aside: the Times calls her his "estranged" niece, .  I'm not sure what it means for a niece to be "estranged." Again, Mr. Trump operates in ways that raise questions we thought we'd never have to ask ourselves.] The issue was whether Mary Trump violated the NDA entered into in connection with a 1999 financial settlement relating to the will of Mr. Trump's father when she shared information with the Times that resulted in article alleging that Mr. Trump had engaged in tax evasion and fraud.  The appellate division found that Mr. Trump had established a basis for a breach of contract claim, although it noted that issues regarding in the scope and enforceability of the NDA remained.  Mr. Trump's attorney proclaimed that Ms. Trump had committed a "blatant and egregious breach of contract," which, if nothing else, is blatant and egregious hyperbole and also irrelevant, unless New York has some statute that allows for special damages in the case of "blatant and egregious" breaches of contract.  Either it's a breach or it's not. Pounding the table with extra verbiage is not a sign of strength or confidence.  It's a sign that someone is wont to behave like a toddler needing a nap rather than a professional who will develop arguments applying the law to the facts.

Tech Workers in Kenya Appeal to President Biden

We've been posting a lot late about OpenAI. Whether it is paying Reddit so they can mine our brains to feed their chatbot, purloining Scarlett Johansson's voice and pretending they hadn't, or just being generally creepy by wanting its audio assistant to sound like the sex-obsessed operating system at the center of a disturbing, quasi-dystopian fantasy movie, OpenAI is fast becoming a tech giant that I hate as much as all the other tech giants.

This open letter to President Biden from Kenyan tech workers gives me a new reason to hate OpenAI, as well as some new reasons to hate the other tech giants.  The Kenyan workers want President Biden to know that US tech giants are "systematically abusing and exploiting African workers," undermining local labor laws in Kenya, and violating international law standards, by imposing conditions tantamount to modern-day slavery.

Nairobi has very high unemployment.  People are desperate for work and eager to work in the tech sector. But the opportunity comes at too high a price.  The Kenyan workers perform content moderation for the platforms, labeling and training AI tools by "watching murder and beheadings, child abuse and rape, pornography and bestiality, often for more than 8 hours a day." For this work, some are paid less than $2/hour.  They allege that they were not informed of the nature of their work when they were hired and that their work has caused them to suffer from post-traumatic stress disorder.

According to the authors, when Kenyan workers try to organize, they are collectively sacked, and the two companies, Meta and ScaleAI, simply moved their content moderation operations to other states, without paying workers back wages, even when ordered by Kenyan courts to do so. The workers call on President Biden to live up to his commitment to labor rights and worker-centered trade. Kenyans want tech jobs, but not tech jobs that will ruin their lives.  

It doesn't seem like a big ask.  The U.S. government should have the power to pressure the tech giants into paying foreign workers living wages, fostering humane work conditions, and complying with the laws of the foreign states in which they operate. These companies are the face of the United States abroad, and we want that face to be associated with technological innovation and economic opportunity, not with worker oppression bordering on enslavement.

Speaking of the Crappification of Work . . .

On Tuesday, I posted about Barbara Ehrenreich and the professional managerial class (PMC).  in that post, I shared an anecdote from the Know Your Enemy Podcast episode devoted to Ehrenreich's legacy in which one of the podcasters shared a story about trying to organize graduate students into a union.  The students were resistant, in part because they didn't think themselves worthy of a union. 

Not so at the University of California, where graduate student organizing has led to salary increases to $36,000 in the Fall.  So I learned from this story from the Mother Ship, Paul Caron's TaxProf Blog.  According to the story, clipped from the Chronicle of Higher Education, Amanda Reiterman was hired as a Lecturer to teach two 120-student sections of classes covering classical texts and Greek history at the University of Santa Cruz.  She recommended that the history department hire as her T.A. a recent graduate who was pursuing a masters degree.  When the department copied her on its offer letter to her former student, Professor Reiterman learned that the student's salary to be her teaching assistant would be 10% higher than her salary to teach the course.  She responded by quitting one of her two sections, instead teaching a small history course for which she would not need a T.A. She experienced learning that her student was earning more than her as "a gut punch."

Strange story, right? I mean how can it be that there are 240 students at UC Santa Cruz who want to attend a lecture course on ancient history? I wonder if any of them would be interested in taking contracts at the Oklahoma City University in the Fall, because I would love to have them.  The response is odd too. Learning that her T.A. is relatively well paid should not make Professor Reiterman want to quit.  She should just be happy that the union's efforts mean that her students can afford decent housing and meals other than packaged ramen noodles.  It should make her want to organize and demand the sort of remuneration she deserves. 

More generally, I wonder about the economics of the California state university system generally.  T.A's now earn four times what I earned when I was a graduate student at Cornell in the 1990s.  I did fine on my princely stipend, and when my wife and I both landed visiting professorships, bringing our household income over the $50,000 threshold, we felt financially secure in the moment (although prospects for future employment were gloomy).  

I understand that the cost of living in California is shockingly high, so I'm not sure $36,000/year in California goes any father than my $9000 in Ithaca, NY.  I just don't get where the money comes from.  According to the story from the Chronicle, there are 48,000 unionized graduate students, researchers and postdocs who work in the University of California system.  Their aggregate salary is now $1.728 billion, representing a $500 million increase over their aggregate salary from 2023.  The mind boggles.  If universities start spending that much money on graduate assistants, how do they have money left to recruit a football team? I mean, have the Santa Cruz Banana Slugs (above right) ever even played in bowl game? 

Taxpayers of Oklahoma Pay for a PR Firm to Promote Its State Superintendant of Schools

Corruption in Oklahoma is probably no worse than corruption in other states, but it just seems like it is both more petty and more shameless.

There's the Epic schools scandal. This was the state's first virtual charter school, and its founders syphoned off millions of taxpayer dollars for their own private use.  Meanwhile, between 2014 and 2020, the principals donated $500,000 to the campaigns of individual Oklahoma politicians and $2 million to various political action committees. The fraud investigation began in 2014.  The principals were charged in 2022 with racketeering, embezzlement, obtaining money by false pretense, conspiracy to commit a felony, violation of the Computer Crimes Act, submitting false documents to the state, and unlawful proceeds.  Who knows if the public will ever disgorge their ill-gotten gains or if they will ever serve time for their crimes. 

Then there's the Swadley's Foggy Bottom Kitchen scandal, which we summarized here.  In short, the state gave a local restaurant chain an exclusive license to provide food service in Oklahoma's state parks. The restaurant won the opportunity through a process in which it was the only bidder and then it overcharged the state for management fees.

The latest is a chapter from the hijinks and shenanigans of the State Superintendent of Schools, Ryan Walters (right), some of which were recounted here and here.  Last week, Jennifer Palmer, writing for The Oklahoman reported that a Republican lawmaker is trying to introduce limits on the state's 2025 budget to prohibit funds from being used to pay for Mr. Walter's  national publicity contract with Washington, D.C.-based Vought Strategies.

The contract potentially pays hundreds of thousands of dollars to the PR firm.  Mr. Walters claims that the purpose of the contract is to help recruit teachers.  Critics contend that the purpose of the contract is really to promote Mr. Walters' career on a national level.  None of the advertising spots thus far produced relate to teacher recruitment.  Rather, according to The Oklahoman, "Vought Strategies pitched interviews about fentanyl and the southern border, drag queens in the classroom, teacher unions, library books and [Mr. Walters'] appointment of Chaya Raichik, the far-right social media influencer behind Libs of TikTok, to a library advisory committee."

Despite clear political ties between Mr. Walters and the agency, inappropriate communications with the agency during a nominally competitive bid process, and questions about the agency's qualifications for a government contract under Oklahoma law, the contract remains in force.  If the Epic scandal is any indication, investigations will be on-going, and indictments will be handed down somewhere around 2035.  Meanwhile, if Mr. Walters really wants to attract teachers to Oklahoma, maybe he should stop trying to revoke their licenses for giving students access to books.

OpenAI: All You Really Need for a Contract Is an Offer

Contracts are all about efficiency. I make a promise to you; you make a promise to me.  If we both perform, we both will be made better off.  But how can I trust you to perform and how can you trust me?  Contracts law makes it so that neither of us will profit from breaking our promises, and due to litigation costs, we may be made worse off for failure to perform.  Thus contracts law contributes to the prevention of the economic waste associated with broken promises.

But traditional contracts require offer, acceptance, an exchange of consideration, and mutual assent. That's so many steps! Wouldn't things be more efficient if you could just make an offer and then have a contract? I mean, sure there could be problems with such a model, but what if the offeror is really, really confident that the offeree should accept their offer because it will be . . . like . . . really cool? 

Thus OpenAI proposes to make contracting still more efficient.  According to Nitasha Tiku, Pranshu Verma, and Gerrit De Vynck, all writing in The Washington Post, Sam Altman (right) of OpenAI approached Scarlett Johansson last September to be the voice of the company's AI voice system.  Ms. Johansson was an inspired choice because of her role in voicing the AI virtual assistant with whom Joaquin Phoenix falls in love in the movie her. I have not seen the film, but let's just say that, based on the plot summary I read, Mr. Altman's desire to embrace the AI voice of that film for his company's SI voice system seems problematic.  It's a typical story of boy meets AI virtual assistant, boy falls in love with AI virtual assistant, AI virtual assistant arranges for boy and her to be intimate through the use of a sex surrogate (it doesn't go well), AI virtual assistant falls in love with boy but also with hundreds of others, boy loses AI virtual assistant, because AI virtual assistant is much more into other AIs than she is into humans. This is the reality to which Mr. Altman seems to think we all aspire. Ms. Johansson turned down the offer.

Two days before the release of OpenAI's new "Sky" audio system, Mr. Altman reached out to Ms. Johansson again.  Before she could respond, OpenAI released a demo of Sky that people thought sounded very much like Johansson's voice in her.  Here's a demo of what it sounds like:

I don't know about you, but I did not think the AI sounded remotely human.  I mean that "Rocky" character just didn't seem real to me.  So robotic. At best, he was like what we might imagine coders imagine people to be like.  Oh, wait, he was supposed to be the real human?  Well, compared to him, yeah, I guess the AI voice sounded more human.

Ms. Johansson threatened legal action against OpenAI, presumably to enjoin the company from using her voice.  While Mr. Altman introduced "Sky" with a single word Tweet, "Her," the company now insists that Sky's voice is not based on the Samantha character voiced by Ms. Johansson in the movie her.  Rather, the company insists that it reviewed submissions from over 400 actors and chose five voices for its voice AI and paid the actors who voluntarily participated "above top-of-the-market" rates for the use of their voices.  The company also suspended Sky.

You know, you can't spell "suspend" without "sus".