Tag: decision

  • Five regulatory process points you may have missed from the University of Sussex decision

    Five regulatory process points you may have missed from the University of Sussex decision

    We’ve covered elsewhere the implications for policy related to academic freedom and freedom of speech stemming from the Office for Students’ decision to fine the University of Sussex for breaches of ongoing registration conditions E1 and E2.

    The publication of a detailed regulatory report also allows us insight into the way in which OfS is likely to respond to future breaches of registration conditions. It is, effectively, case law on the way OfS deals with concerns about higher education providers in England – and while parts of your university will be digesting what the findings mean for academic freedom policies, others will be thinking more widely about the implications for regulation.

    The University of Sussex, perhaps unsurprisingly, wishes to challenge the findings. It is able to challenge both the regulatory decisions and the amount of the fines at a first tier tribunal.

    As always, appeals are supposed to be process based rather than just a general complaint, so the university would have to demonstrate that the application of the registration conditions was incorrect, or the calculation of the fine was incorrect, or both. As above, there is no meaningful defence of the way the fines were calculated or discounted within the judgement so that would feel like the most immediately fertile ground for argument.

    Here’s some of the points that stood out:

    How and why was the decision to investigate made?

    We are told that, on 7 October 2021, the OfS identified reports about an incident at the University of Sussex. This followed the launch of a student campaign at the University of Sussex the previous day – which involved a poster campaign, a masked demonstrator holding a sign, and a hashtag on social media – calling for Kathleen Stock (a professor in the philosophy department) to lose her job.

    This was widely covered in the media at the time, and sparked commentary from interest groups including the Safe Schools Alliance UK and the Free Speech Union. The OfS subsequently contacted the university seeking further information, before starting a full investigation on 22 October 2021. However, despite significant public interest, the decision to start an investigation was not made public until a statement by an education minister in the House of Lords on 16 November (when we were told that the Department for Education was notified on 11 November).

    Kathleen Stock resigned from her role at the university on 28 October – six days after the start of the investigation, and substantially before the public announcement. She noted that “the leadership’s approach more recently had been admirable and decent”, while the university claimed to have “vigorously and unequivocally defended Prof Kathleen Stock’s right to exercise her academic freedom and lawful freedom of speech, free from bullying and harassment of any kind”.

    What’s not clear from this timeline is the nature of the notification on which the Office for Students was acting: the regulatory framework in place at the time suggested OfS would take action on the basis of lead indicators, reportable events, and other intelligence and sources of information. There are no metrics involved in this decision, and we are told the provider did not notify the OfS so there was no reportable event notification.

    We are left with the understanding that “other sources of information” were used – these could be “volunteered by providers and others, including whistleblowers”. Perhaps it was the same “source of information” that caused then Minister Michelle Donelan to shift from backing the university response on 8 October to calling for action on 10 October?

    We also know that – despite OfS’ insistence that it “does not currently have a role to act on behalf of any individual” – it appears that the only person to submit a “witness statement” to OfS was Stock. If OfS was concerned generally about the potential for a chilling effect on academic speech, would it not want to speak to multiple academics to confirm these suspicions? Doesn’t speaking to just one affected individual feel a little like acting “on behalf” of that individual?

    Finally – sorry to bang on – we don’t know who at OfS made the decision to conduct an investigation or on what basis. Can, say, the director of regulation just decide (based on a story in the press, or general vibes) to investigate a university – or is there a process involving sign-off by other senior staff, ideally involving some kind of assessment of the likelihood of a problem being identified within a reasonable period of time? If I were an internal auditor I would also want to be very clear that the decision was made using due process and free from political or ideological influence (for instance I’d be alarmed that someone was content for then-chair James Wharton to posit an absolutist definition of free speech in the Telegraph) shortly after the investigation started.

    Why did it take so long to investigate and make a decision?

    The only clue we are given in the regulatory report is that this is a “complex area”. OfS requested a substantial amount of documentation from Sussex – it even used a “compliance order” to make sure that no evidence was destroyed. However, it does not appear that OfS ever visited the provider to speak to staff and students – in other regulatory investigation reports, OfS has been assiduous in logging each visit and contact. There is none of that here – we don’t know how many interactions OfS had with Sussex, or on how many occasions information was requested. Indeed, OfS appears not to have visited Sussex at all. Arif Ahmed told us:

    “There may have been occasions where the university wanted to meet in person and communication was done in writing instead

    Various points of law are referred to in the regulatory report : it is notable that none of this is new law requiring additional interpretation or investigation (the new Higher Education (Freedom of Speech) Act had not even left the House of Commons committee stage at this point). It shouldn’t really take a competent lawyer that knows the sector more than a few weeks to summarise the law as it then stood and present options for action.

    The investigation into the University of Sussex was mentioned in the Chief Executive’s report from the 2 December 2021 Board meeting, and it turned up (often just as an indication that the investigation was ongoing)

    If OfS was able to fine a university for a breach of an ongoing registration relating to academic freedom, why do we need the Higher Education (Freedom of Speech) Act?

    Well, quite. On our reckoning, the Act would have made no difference to the entire affair, save potentially for a slight chilling effect on students being empowered to exercise their own freedom of speech, and a requirement for both providers and OfS to promote free speech. The ability of the OfS to reach the conclusion it reached, and to instigate regulatory consequences, suggests that further powers were not necessary to uphold freedom of speech on campus – despite the arguments made by many at the time. There is nothing OfS could have done better, or quicker, or more effectively had the Act been in force. Sussex, in fact, had a freedom of speech policy at the time, something that the regulatory report fails to mention or take account of.

    It is curious that the announcement of the investigation came at the start of a long pause in parliamentary activity on the Higher Education (Freedom of Speech) Act – at that time we were keenly anticipating a report from the House of Commons committee stage, but we got no action at all on the bill until it was carried forward into the next session of parliament.

    How was the amount of the fine arrived at?

    There is a detailed account of the process by which it was decided to fine Sussex £360,000 for a breach of registration condition E1, and £225,000 for a breach of registration condition E2. It appears thorough and convincing, right until the point that you read it.

    OfS appears to be using a sliding scale (0.9 per cent of qualifying income for “failing to uphold the freedom of speech and academic freedom governance principle”, 0.5 per cent of qualifying income for “a failure to have adequate and effective management and governance arrangements in place”, an additional 0.2 per cent for not reporting the breach, a 0.2 per cent reduction for taking mitigating action…) and although Regulatory Notice 19 takes us through the process in broad terms we don’t get any rationale for why those proportions apply to those things.

    It’s all a bit “vibes based regulation” in truth.

    It is to be welcomed that OfS reduced its initial calculation of a £3.7m (1.6 per cent of qualifying income) fine to a more manageable £585,000 – but why reduce to that amount (by a hair under 85 per cent) purely because it is the first fine ever issued for this particular offence? What reduction will be applied to the next fines issued under registration conditions E1 and E2? If none, why not – surely “sufficient deterrence” is possible at that amount so why go higher?

    The documentation covers none of this – it is very hard to shake the impression that OfS is pulling numbers out of the air. When you compare the £57,000 (0.1 per cent) fine issued to the University of Buckingham for not providing audited accounts for two years (something which would have yielded something altogether nastier from Companies House you do have to ask whether the Sussex infractions were 1.5 percentage points more severe at the initial reckoning?

    Are the wider implications as the regulator intends?

    There are so many questions raised that will now be hurriedly posed at universities and higher education all over England – and my colleague Jim Dickinson has raised many of them elsewhere on the site. He’s had enough material for four pieces and I’m sure there will be many more questions that could be explored. Why – for example – should the regulator have a problem with “prohibiting the harmful use of stereotypes”? Is there a plausible situation where we would want to encourage the harmful use of stereotypes?

    It would also be worth noting the many changes to the policy that appears to have caused the initial concern (the Trans and Non-Binary Equality Policy Statement) between 2018 and 2024. Perhaps these changes demonstrated the university dealing with a rapidly shifting public debate (conducted, in part, by people with the political power to influence culture more generally) as seemed appropriate at each point? So why is OfS not able to sign off on the current iteration of this policy? Why is it hanging a hefty fine on a single iteration on what is clearly a living document?

    There’s also a burden issue.Is it the position of the regulator that every policy of each university needs to be signed off by the academic council or governing bodies? Or are there any examples of policies where decisions can be delegated to a competent body or individual? A list would be helpful, if only to avoid a burdensome “gold plating” of provider-level decision making.

    Beyond the freedom of speech arguments

    There are 24 ongoing conditions of registration currently in force at the Office for Students – a regulatory report and a fine (or other sanctions) could come about through an inadvertent breach of any one of them. Many of these conditions don’t just apply to students studying on your campus – they have an applicability for students involved in franchised (and in some cases validated) provision around the world.

    We should be in a position where the sector can be competently and reliably regulated, where providers can understand the basis, process, and outcomes of any investigation, and that these are communicated promptly and clearly to the wider public. On the evidence of this report, we are a long way off.



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  • DOL files fresh appeal of a Texas decision vacating its new overtime rule

    DOL files fresh appeal of a Texas decision vacating its new overtime rule

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    Dive Brief:

    • The U.S. Department of Labor has appealed a Texas federal judge’s 2024 decision blocking its Biden-era final rule which sought to expand overtime pay protections under the Fair Labor Standards Act, according to a Feb. 28 court filing.
    • Last December, Judge Sam Cummings of the U.S. District Court for the Northern District of Texas ruled against DOL in Flint Avenue, LLC v. U.S. Department of Labor, vacating and setting aside the final rule. Cummings’ decision came just over one month after another Texas judge similarly vacated and set aside the rule in a separate lawsuit filed by the state of Texas and parties including the Plano Chamber of Commerce.
    • The appeal takes Flint Avenue to the 5th U.S. Circuit Court of Appeals, the same court in which DOL filed an appeal of the decision in the State of Texas case last year. DOL’s public affairs staff did not immediately respond to a request for comment. The U.S. Department of Justice, which represents the DOL, did not respond to a request for comment submitted via its online form.

    Dive Insight:

    The Feb. 28 notice of appeal may come as a surprise to employers who expected the Trump administration to abandon the final rule; attorneys who previously spoke to HR Dive said that the rule was effectively “dead” despite DOL’s State of Texas appeal because of the Trump administration’s conservative policy stance on overtime.

    In fact, the new administration had already filed motions in the 5th Circuit pertinent to overtime rule litigation. On Jan. 22, two days after President Donald Trump’s inauguration, DOJ attorneys sent a letter to the 5th Circuit requesting a 30-day extension on the deadline set by the court to file an opening brief in the State of Texas appeal. The court granted the request and the agency’s filing deadline is currently set to March 7.

    The April 2024 final rule proposed a two-step process that would have eventually raised the minimum annual salary threshold for overtime pay eligibility under the FLSA from $35,568 to $58,656 by Jan. 1, 2025. The rule would then have implemented a mechanism for automatically adjusting the threshold every three years using current wage data beginning in July 2027.

    But a series of Texas court decisions froze the rule. The judge in State of Texas held that the rule exceeded DOL’s authority and was unlawful. Likewise, Cummings said in his decision that he found the State of Texas judge’s reasoning “persuasive,” and he adopted the same reasoning in ruling for the plaintiffs.

    There is some intrigue in how the 5th Circuit might rule on the two appealed judgments given that the court signed off on DOL’s overall use of a salary basis test for determining overtime pay eligibility in last year’s Mayfield v. U.S. Department of Labor. The Mayfield plaintiffs alleged that the salary basis test had no basis in the FLSA’s text, but the 5th Circuit disagreed. The court did hold, however, that DOL “cannot enact rules that replace or swallow the meaning” of the FLSA’s text, adding that particular salary threshold may raise legal issues because of their size.

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  • SCOTUS decision safeguards schools’ E-rate discounts

    SCOTUS decision safeguards schools’ E-rate discounts

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    The U.S. Supreme Court on Friday unanimously ruled that reimbursement requests filed with the federal E-rate program, which subsidizes internet access for schools and libraries, qualify as claims under the False Claims Act, allowing a whistleblower suit to proceed against a telecommunications company.

    Whistleblower Todd Heath alleged in 2008 that telecommunications provider Wisconsin Bell overcharged schools and libraries by not offering them discounted rates required under the E-rate program and submitting reimbursement requests for higher amounts than E-rate should have paid. The False Claims Act allows civilians to bring lawsuits against companies on behalf of the government when federal money is at stake.

    E-rate is administered by the Universal Service Administrative Co. under the direction of the Federal Communications Commission. Wisconsin Bell argued that because the Universal Service Administrative Co. is a private, nonprofit corporation and program money comes from fees collected by service providers, its reimbursement requests didn’t qualify as claims under the False Claims Act.

    Under that law, a request for money qualifies as a claim if the government “provides or has provided any portion of the money or property requested or demanded.” Justice Elena Kagan, writing for the court, rejected Wisconsin Bell’s arguments because the government provided part of the funds that schools and libraries applied for.

    “In the years in which those requests were made, the Government transferred more than $100 million from the Treasury into the pool of funds used to pay E-Rate subsidies,” Kagan wrote. “That is enough to create a ‘claim’ under the Act, and to allow a suit alleging fraud to go forward.”

    Wisconsin Bell’s argument that the $100 million was entirely from fees collected by carriers also overlooked the government’s role in delivering that money to the program, Kagan wrote, stating that the government was not a “passive throughway” for those funds.

    The Supreme Court sent Wisconsin Bell, Inc. v. United States, ex rel. Todd Heath back to the 7th U.S. Circuit Court of Appeals for its whistleblower claims to proceed.

    The Schools, Health and Libraries Broadband Coalition hailed the ruling as helping to strengthen enforcement measures and safeguard broadband funding.

    “This decision is a win for schools and libraries who rely on the E-rate program for essential broadband services,” said John Windhausen, the coalition’s executive director, in a statement. “By clarifying the applicability of the False Claims Act to E-rate reimbursements, the Court helps ensure that schools and libraries are able to obtain prices that are no higher than the rates charged to similarly situated customers. This ruling helps improve the efficiency of the Universal Service Fund and the E-Rate program.”

    Attorney Allyson Ho, who represented Wisconsin Bell in the case, did not immediately respond to a request for comment.

    The narrow scope of the ruling, however, makes it difficult to forecast how the justices might rule on another pending E-rate matter this term. In a case consolidated from two pre-existing ones FCC v. Consumers’ Research and Schools, Health and Libraries Broadband Coalition v. Consumers’ Research — the program’s future could be decided as the court determines the constitutionality of the funding mechanism for the FCC’s Universal Service Fund, which is overseen by USAC.

    “The court was very clear in its emphasis that it has no opinion on issues regarding the constitutionality of the universal fund and of USAC’s role that it will decide in that upcoming Consumers case,” said Noelle Ellerson Ng, associate executive director of advocacy and governance for AASA, The School Superintendents Association. 

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