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Foreign. Hello and welcome to the Emerging Litigation Podcast. I'm your host, Tom Hagee. Today we're going to talk about the FTC warning law firms about diversity certification programs. This time they're alluding to antitrust in the labor market. These warnings are part of a pattern to broaden the pressure and power of the executive branch over law firms and media companies. It appears right now law firms are staying pretty quiet about this, and understandably so after receiving warnings from the Trump administration that any coordinated efforts, policies or programs to develop diverse teams could be actionable. Their silence is likely because the latest missive, this one from the head of the Federal Trade Commission, is more along the lines of watch your step than you are breaking the law. Also seeing the writing on the wall, some firms have already scaled back their DEI programs, kind of complying in advance FTC chairman Andrew Ferguson sent warning letters to 42 major law firms on January 30, cautioning that participation in Diversity Lab's Mansfield certification program may expose them to liability under section 1 of the Sherman act that prohibits collusion and other agreements that restrained trade. Section two deals with monopolies. As one antitrust lawyer told me, they got that backwards. But anyway, and then also they're saying that these could be could be Violations of Section 5 of the FTC act, which bars unfair methods of competition, including conduct that falls short of a full Sherman act violation. Now, the FTC framed the issue as a labor market antitrust concern, warning that coordinated DEI related benchmarks and structured quote knowledge sharing among competing firms could impair independent decision making and distort competition for legal talent. At the same time, a federal court has weighed in on this Mansfield rule in a different context, rejecting claims that the program creates unlawful quotas. It doesn't. Although that decision doesn't address antitrust, it is relevant to the public conversation about what Mansfield does and does not benchmark when it comes to the legal labor market. So what is the Mansfield rule, you might ask? I ad libbed that part. Mansfield was adopted in 2016 by a diversity testing and certification organization called Diversity Lab. This was during their There's a group that gets together, Women in Law Hackathon, to broaden the pool of candidates for leadership roles at America's law firms. The Women in Law Hackathon is a It's an innovation competition, kind of like Shark Shark Tank. Created by Diversity Lab in partnership with Stanford Law School and Bloomberg Law. Its purpose is to generate new evidence based ideas to advance women in the legal profession. They named it for Arabella Mansfield, who in Iowa in 1869, became the nation's first woman admitted to practice law. Diversity Lab modeled the Mansfield rule on the NFL's 2003 Rooney Rule, which requires teams to interview minority candidates for head coaching and senior positions to ensure they receive genuine opportunities. The Rooney Rule emerged after criticism of the NFL's hiring practices, particularly the 2002 firings of two successful black head coaches. Civil rights attorneys proved that black coaches won more games on average, but were hired less often and fired more frequently. In response, the NFL's Workplace Diversity Committee, chaired by Dan Rooney, owner of the Pittsburgh Steelers, Go Stillers, recommended the rule, which was named in his honor. Like the Rooney Rule, the Mansfield Rule focuses on expanding opportunity, but with a legal industry specific benchmark. Firms must consider at least 30% underrepresented lawyers in candidate pools for promotions and leadership roles. Both rules aim to interrupt. Both rules aim to interrupt structural bias not by mandating outcomes, but by ensuring that qualified diverse candidates are consistently included in leadership pipelines. Mansfield Certification plus recognizes firms that show measurable progress toward the 30% benchmark for considering minority hires. So, you know, this is like, we got a goal in life. We think diversity is a good thing. Let's, let's make an effort to make more diverse. But we're not going to mandate. Nobody's mandating anything. These are not quotas. And the court, and a federal court concluded that as well. Now, the FTC's theory and DEI coordination as a potential labor market escalate. Now, the FTC's theory, the DEI coordination, is a potential labor market collusion. The Trump administration has made it clear that its intentions is to wipe away any and all DEI programs and as, quote, reverse discrimination. There isn't such a thing. In its warning letter, the FTC points to reporting that firms participate in monthly, quote, unquote, knowledge sharing calls. You know, we don't want to share knowledge, especially on calls. Am I, am I editorializing? It's possible. These knowledge sharing calls are joined by other Mansfield firms and they want to discuss implementation of their different programs. Sounds to me like, you know, if you had an HR conference, you know, that's not exactly, you know, Sherma gets to, gets everybody together. It's hardly collusion. Anyway, the commission suggests that these calls may create avenues for reduced independent decision making. May. It may also, they also may facilitate the sharing of competitively sensitive information. They may, I think you get up in the morning, you may break the law, but, you know, who's going to give us a warning letter anyway? It may also lead to wage suppression, the FTC says the commission warns that any exchange of pay or benefits information among competitors could harm competition for talent. Okay. The commission also emphasizes that its letters are not findings of illegality. They're just love notes. But cautioning, they're just cautionary notes encouraging firms to review their DEI related interactions with competing law firms. So watch your step. Despite the seriousness of the warnings, as I said earlier, the law firms have remained silent. I've looked around and I'll keep looking, but of course they haven't been charged with anything. So, you know, I've never run a law firm, but I don't know, you want to send me a, you know, send me a love note, a Christmas card? I don't have to respond, oh, it's nice to send back something after, after Christmas or whatever holidays for those who celebrate now. This is the Trump administration's second volley at Mansfield. The first one I alluded to earlier was, was lobbed in the context of employment law. But in a 2025 opinion that's last year in Perkins Coey vs DOJ, Judge Beryl Howe rejected the government's claim that Mansfield participation reflected discriminatory hiring. Here's a quote, the Mansfield rule expressly does not establish any hiring quotas or other illegally discriminatory practices, requiring only that participating law firms consider attorneys for, from diverse backgrounds for certain positions and end quote. The judge concluded that the FTC failed to provide any evidence of any anti discrimination law violations. Briefing in the FTC's appeal. Of course, of course they would appeal to the D.C. circuit begins next month. In March, the administration's assault on big law firms was a headliner during the first year of President Trump's second term. Also last year, who could forget an executive order challenged in Jenner and Block vs Dog go. Jenner was issued with the clear intent to punish the firm for the clients that represented, the cases it pursued and the political viewpoints the administration attributed to it. Judge John Bates decided the order explicitly criticized this is the executive order explicitly criticized Jenner and Block for engaging into what it labeled as partisan litigation and for its association with an attorney who had publicly opposed Trump. And it imposed punitive restrictions, such as suspending security clearances to the firm, limiting access to federal buildings. They're all very nice. Who doesn't want to go there? And pressuring agencies and contractors to sever ties with the firm, all measures designed to cripple its ability to function in matters involving the federal government anyway. Judge Bates struck down the executive order in full, finding that unconstitutional retaliation had violated the first Amendment's prohibition on government imposed political orthodoxy and improperly chilled legal advocacy, noting that, quote, few stars are as fixed, end quote, in the Constitution as the rule that no official may dictate what is and what is not acceptable political viewpoints. Of course, the DOJ has appealed Judge Base's ruling to the U.S. court of Appeals for the D.C. circuit. You know, this also marks at least the second instance of the Trump administration trying to leverage antitrust laws to advance its ideology or orthodoxy driven policies. The the DOJ submitted a statement of interest in favor of alternative media companies who are alleging that mainstream media companies and social media platforms colluded via something called the Trusted News Initiative to suppress alternative content on Facebook, Instagram, LinkedIn, Twitter and YouTube. The defendant publishers put it this way though, that they said that this tni, this Trusted News initiative, is merely a media partnership whose goal is to identify and combat disinformation harmful to the nation's health. This was related to the COVID 19 vaccine, for example. They say it's also harmful to the democratic process because unfounded reports also were circulating challenging the legitimacy of the 2020 election. This has been repeatedly discredited and they were merely trying to say, let's, let's keep an eye on some of this stuff that's just false and let's not circulate it. If you want to state it as opinion, that's different. But they were trying to, you know, keep, keep actual fake, fake news from being being circulated. But you know, the, the social media companies could do whatever they wanted. You know, the, the newspapers, et cetera, would say, hey, this is fake by the way. And the media company, the social media companies could say we don't care. Or they can say, good, thanks for letting us know. Now, the case was Originally brought in January 2023 by now Secretary of Health and Human Services. It's really hard to say. Robert F. Kennedy Jr. The anti vaccine Children's Health Defense Organization, which Kennedy founded, and a group of these alternative media producers, Creative Destruction Media and Trial Site News, are among them. The alternative media companies say they were deplatformed by the publishers and the platform operators because their health care and political views were outside the mainstream. Yeah, that's why the defendants, the Washington Post, the BBC, the Associated Press and writers stand by their anti disinformation efforts and say the case fails to meet any of the requirements of the Sherman Act. So this case is pending. I looked at the docket, not a lot happening right now for some reason, but you know, can't read too much into that, so keep checking on that case. But anyway, it's just interesting that the government's position is no, these companies should be free to put on social media things that are absolutely wrong and dangerous. I'm, I guess I am editorializing now these let's talk about media mergers because it's another merging mergers are another key aspect of competition law, whether they're, you know, whether they're going to hurt competition or help competition anyway. So these, these interventions are seeing they're part of a broader pattern. Axios has documented Trump's practice of applying regulatory leverage and public pressure to influence media ownership, shaping which companies expand and which stall in merger review. Similar dynamics surfaced in earlier episodes, from pressuring regulators on station ownership caps to public publicly urging approval of the nexstar Tegna merger as a way to counter quote fake news competitors. Collectively, these actions demonstrate how the merger review has become another arena in which the administration seeks to reward aligned media companies and disadvantage those as critical, reinforcing the same concerns about retaliatory government power that underlie the federal court's skepticism in the law firm cases. Trump administration has also made headlines by inserting itself directly into some major media industry mergers, often involving companies with news divisions that the president has publicly criticized. Recent recent reporting shows that Trump signaled that he would be, quote, involved in evaluating Netflix's proposed $83 billion acquisition of Warner Brothers Discovery, commenting that the deal, quote, could be a problem because the market share would create for the company. Days later, the Guardian reported that his financial disclosure revealed more than $1 million in in bond purchases from Netflix and Warner Brothers Discovery transacted while the merger awaited regulatory review, raising concerns about potential influence over the process. At the same time, a competing hostile bid by Paramount Skydance, backed financially by Jared Kushner and connected to Trump aligned investors positioned the administration even closer to decisions over who would control cnn, HBO and other outlets frequently targeted by the president. So stand up or stand down Recent recent actions by the Trump administration make it clear that both law firms and media companies remain prime targets. The White House perceives that they wield excessive influence and have leveraged their positions for financial and strategic gain. So I'll say that again. The White House believes that the law firms and the media companies, they have wielded excessive they wield excessive influence, and they've leveraged that influence for financial and strategic gain and with a straight face. So by invoking antitrust and other federal laws, the administration signals its determination to challenge what it sees as abuses of power, abuses of power, which we don't like that now, whether that's in the context of diversity initiatives within legal, within law firms or in the operations of major media partnerships, particularly news outlets. So this ongoing scrutiny reflects a broader ideological stance that these institutions, in the administration's view, have crossed lines in ways that justify government intervention both to restore competition and to curtail perceived outreach in the pursuit of of profit and political objectives. You don't want to overreach in your pursuit of profit and political objectives as, I don't know, as these skirmishes, these warnings, whatever lawsuits play out, law firms and media organizations are going to have to continue to navigate this new environment, this new whitewater of heightened enforcement and political pressure. The outcomes of these disputes are going to shape not only antitrust, freedom of speech, diversity initiatives and employment practices, but the broader relationship between private power and government oversight. It's worth noting that the law firms, all the law firms, they either have the law firms at least were received these letters. They all have robust antitrust practices, so they're familiar with antitrust, or they have employment law practices, so they get employment law too. In some cases, some of the firms have both. So there you go. Thanks for listening. Once again, this is Tom Hagee, Emerging Litigation Podcast. If you ought to reach out to me, write to me@editoritigationconferences.com thanks for listening.