We have a regretful this day in legal history today, which is the flipside of yesterday’s anniversary of Brown v. Board of Education. Plessy v. Ferguson, widely regarded as a low watermark for the court and the origin of the “separate but equal” doctrine overturned in Brown was decided on this date in 1896. The case involved a Louisiana state law that permitted segregation by race, providing for "equal but separate accommodations" for white and colored individuals. The ruling upheld the constitutionality of the law, with Justice Henry Brown arguing that the separation did not imply inferiority, but rather was an interpretation chosen to be taken up by the “colored race.” Justice John Marshall Harlan dissented, considering the law to be inconsistent with personal liberties and the spirit of the U.S. Constitution. The decision reinforced the doctrine of "separate but equal" and allowed for the continued enforcement of racial segregation laws. It was not until the aforementioned landmark Supreme Court decision in Brown v. Board of Education in the 1950s and subsequent civil rights legislation that state-enforced segregation was officially dismantled.
The Second Circuit Court of Appeals is set to hear arguments regarding a challenge to a New York City law that requires just cause for terminating fast-food workers. The law, enacted in 2021, limits the authority of fast-food companies to fire employees without valid reasons. If upheld, this law could have broader implications for exceptions to the at-will employment doctrine in other industries and regions. The New York City Council is also considering extending just-cause protections to all industries, and similar legislation is pending in Illinois. The case has attracted numerous amicus briefs from both business groups and worker advocacy organizations. The at-will employment doctrine, which allows companies to terminate workers for any reason except for discriminatory ones, is uncommon among industrialized democracies. Exceptions to this doctrine exist in the form of anti-discrimination laws and specific employment agreements. New York City's law applies to fast-food chains with a minimum of 30 locations and includes requirements for progressive discipline and written explanations for terminations. A US District Judge previously rejected the challenge to the law, ruling that it does not infringe on the collective bargaining process. The arguments in the Second Circuit will further determine the fate of the law.
The EPA's $27 billion clean energy fund is driving the establishment of green banks in various states, irrespective of their political affiliation. Over the past two years, several states, including California, Colorado, Illinois, Nevada, and Pennsylvania, have launched green banks, while others are moving closer to implementing them. The Inflation Reduction Act, which includes the $27 billion fund, has encouraged states to embrace green banks as a means of generating job opportunities and investment in renewable energy. Typically associated with blue states, green banks are now gaining traction in red states like Alaska, Florida, and Texas. The EPA's funding could mobilize over $250 billion in total investment, addressing a significant portion of the emissions reductions required to achieve President Biden's net zero emissions goal by 2050. Local green banks, such as Maryland's Montgomery County Green Bank, are well-positioned to leverage federal funding and have a track record of aligning with environmental equity objectives. However, advocates express concerns that Republican-led efforts to rescind climate provisions could undermine the benefits for disadvantaged communities. Despite the establishment of green banks, some Southern states still have policies that discourage residential solar projects, posing additional challenges to clean energy adoption.
Simpson Thacher, a prominent Big Law firm, has implemented a policy stating that associates must be present in the office at least three days a week to be eligible for annual and discretionary bonuses. The firm recently updated its employee handbook, warning that associates who fail to comply may have their bonuses reduced or become ineligible. As the pandemic subsides, in reality or in practice, law firms are grappling with how to encourage lawyers, particularly junior associates who, the logic goes, benefit from in-person training, to return to the office. Simpson Thacher's move follows a similar announcement by Sidley Austin, another major Big Law firm, which emphasized that attendance would be a factor in bonus considerations. The adjustment in firm policies is attributed to the decrease in leverage for associates due to a slowdown in demand and cost-cutting measures. Simpson Thacher, a top performer in the mergers and acquisitions space, reported substantial gross revenue of nearly $2.2 billion last year. However, some associates express dissatisfaction with the requirement to work in the office while partners often work remotely, leading to challenges in communication and collaboration. Still others see it as a generational difference in work style.
A little bit of tax talk. The Internal Revenue Service (IRS) has announced increased contribution limits for Health Savings Accounts (HSAs) in 2024. Individuals with self-only coverage under a high-deductible health plan can save up to $4,150, compared to $3,850 in 2023. For family plans, the contribution limit has risen to $8,300 from $7,750. To qualify, individuals must have a high-deductible health plan with a minimum annual deductible of $1,600 for self-only coverage or $3,200 for family coverage. These adjustments allow individuals to deposit more tax-free money into their HSAs.
Montana Governor Greg Gianforte has signed legislation to ban Chinese-owned TikTok from operating in the state, making it the first U.S. state to ban the popular short video app. The ban, which takes effect on January 1, 2024, prohibits Google and Apple's app stores from offering TikTok within the state. However, there will be no penalties imposed on individuals using the app. TikTok, owned by ByteDance, responded by stating that the new law infringes on First Amendment rights and that it will continue to defend the rights of its users. The app has faced concerns about potential Chinese government influence and has over 150 million American users, mostly teenagers. The ban is likely to face legal challenges, and the American Civil Liberties Union (ACLU) has criticized it as unconstitutional. Former President Donald Trump's attempt to ban TikTok and WeChat in 2020 was blocked by multiple courts. If the ban is effective, users of TikTok will have to get their Big Sky content from neighboring North Dakota which has, at best, a solid Medium Sky.