Transition to the Trump era
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When the Supreme Court ruled in June to uphold affirmative action at the University of Texas, the decision heartened those who felt that opportunities were narrowing for minorities at a time of increasing racial violence and the pointed slights of Donald Trump’s election campaign.
“The question was whether universities in the US could continue to do this at a time when it has become increasingly important,” says Gregory Garre, the Latham & Watkins attorney whose defence for the University of Texas arguing for “diversity within diversity” secured the Supreme Court win. “If the court held that it was unconstitutional, diversity at the University of Texas would have plummeted.”
The decision in the case, Fisher v University of Texas, “was really significant in that it was really unexpected. It is even more important today after the presidential election,” says Mr Garre, a former US solicitor general.
As the US heads into a period of potentially tumultuous change, the work of lawyers such as Mr Garre has become ever more important. From those defending civil rights to others working on crucial issues to improve the treatment of workers in the so-called gig economy or to redefine prosecutorial action over insider trading, this FT report highlights the work of lawyers in business and society.
The deciding vote in Mr Garre’s Supreme Court case had been cast by one of the more conservative judges on the panel, Justice Anthony Kennedy, which means that for now the balance of the court is not likely to shift on this issue any time soon.
But now that Mr Trump will be picking the Supreme Court’s replacement for the conservative Justice Antonin Scalia, who died in February, some fear that other civil rights of recent years could be overturned. Any big change in the make-up of the Supreme Court will not be immediate, because Scalia would simply be replaced by another conservative judge. But with three justices — Ruth Bader Ginsberg, Anthony Kennedy and Stephen Breyer — in or near their eighties, it is possible that Mr Trump will appoint others during the course of his presidency, especially if he wins a second term.
“The Supreme Court may change dramatically, potentially for a generation, as a result of this election,” says Michael Gottlieb, partner at Boies, Schiller & Flexner, and a former associate White House counsel for President Barack Obama. If President Trump needed to “replace any of Justices Kennedy, Breyer or Ginsberg, the result will be a shift to the right on issues such as the death penalty, civil and reproductive rights, and on the powers of Congress versus the powers of the states. This could yield the most conservative Supreme Court in recent memory.”
Mr Trump has already indicated that he may question abortion rights. Others fear his murky stance on potential conflicts of interest while serving as president could undermine efforts to crack down on corporate crime. Mr Trump said on November 30 he would leave his business empire “in total” amid mounting controversy over the issue. He added that he was “not mandated to” make the move on a legal basis, but felt “it is visually important, as president, to in no way have a conflict of interest with my various businesses”. But he has not explained how he will exit and he has formerly said he would leave his business to the care of his children.
Any ambiguity could lead to foreign governments and multinational corporations asking why they are required to comply with strict US legislation aimed at ensuring the propriety of business deals outside the country, Mr Gottlieb warns. “It creates a dilemma for the Department of Justice leadership.”
The work of lawyers who have defended citizens’ rights in the past year will become ever more critical. Stephen Fishbein, now a partner at Shearman & Sterling, began his career in the late 1980s in the office of Rudy Giuliani, US attorney for the southern district of New York. It made a habit of pursuing insider trading cases, and Mr Fishbein says that sometimes prosecutors pursued weak examples because insider trading cases were easier to try, while some bigger fish slipped through the net. “It’s very tempting for a prosecutor [to pursue insider trading cases] because they know they’re not going to have a problem with the jury . . . They know these cases are understandable to juries.”
Prosecutors have pursued a spate of insider trading cases since the 2008 financial crisis, and Mr Fishbein believes prosecutors have, at times, been overzealous.
In 2014, he won a landmark court of appeal ruling that led the government to rethink its approach. Mr Fishbein defended Todd Newman from charges of insider trading, in which he demonstrated that the information Mr Newman had traded on had already been passed on two or three times. Also, he did not know if the insider who disclosed the information had been paid off or had received any other benefit.
The court ruling narrowed the DoJ’s ability to bring insider trading cases by requiring them to prove a personal benefit, and 12 cases were settled or dropped following the ruling.
For lawyers trying to map a fairer vision for business and society, their work could not come at a more critical time. The gig economy is expanding, and so is the group of workers dubbed “the precariat” because of their insecure jobs, volatile incomes and lack of employment rights and benefits.
Russell Sullivan, a partner at McGuireWoods, has been advising the Aspen Institute, a Washington DC-based not for profit organisation, on a project called “The future of work”. The initiative is seeking to establish a new framework for relations between employers and employees in an economy that is rapidly changing. The aim is to create incentives for employers to help workers gain access to education and training, a key issue in the growing gulf between white-collar and blue-collar workers.
One proposal being hatched would encourage employers to help employees pay off student loans by granting the same tax benefits as for employer investments into a 401k retirement plan. Another calls for incentives to help employers create savings schemes for workers who have not completed college to finish their degrees.
“Most people have decided that one of the driving factors in the US election campaign was that Washington was not doing enough to help middle class workers get better jobs and opportunities for advancement,” Mr Sullivan says. “We can’t continue to try to conform to an employer-employee relationship based on a model designed for the 1970s.”
For many with long experience in Washington, the hope is the work of such lawyers will also act as a constraint on any potential excesses of the new era.
“We have to have faith in the system,” says Norman Eisen, the former ethics tsar for President Obama and previously a litigation partner at Zuckerman Spaeder.