Tag: decision

  • 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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  • NLRB Issues Decision Blocking Certain Provisions in Severance Agreements, CUPA-HR to Hold Webinar – CUPA-HR

    NLRB Issues Decision Blocking Certain Provisions in Severance Agreements, CUPA-HR to Hold Webinar – CUPA-HR

    by CUPA-HR | March 20, 2023

    On February 21, the National Labor Relations Board (NLRB) issued its decision in McLaren Macomb deciding that employers cannot offer employees severance agreements that require employees to waive rights under the National Labor Relations Act (NLRA), such as confidentiality and non-disparagement requirements.

    The Board explained in its press release on the decision that if an employer offers a severance agreement with a provision that requires the employees to broadly give up their rights under the Act, the employer violates the NLRA. The simple offering of the agreement “is itself an attempt to deter employees from exercising their statutory rights, at a time when employees may feel they must give up their rights in order to get the benefits provided in the agreement.” NLRB Chair Lauren McFerran said “It’s long been understood by the Board and the courts that employers cannot ask individual employees to choose between receiving benefits and exercising their rights under the National Labor Relations Act.”

    McFerran issued the decision alongside NLRB Democratic Members Gwynne Wilcox and David Prouty, while Republican Board Member Marvin Kaplan dissented. The decision reverses two Trump-era NLRB decisions, Baylor University Medical Center and IGT d/b/a International Game Technology. Both of these decisions determined severance agreements with confidentiality and non-disparagement provisions not unlawful in and of themselves.

    Importantly, this decision does not apply to public sector employees as the NLRB only has statutory jurisdiction over private sector employees. Additionally, the ruling does not apply to employees in supervisory or managerial positions.

    CUPA-HR will hold a webinar on this rulemaking and its potential impact on higher ed institutions on March 30, 2023 at 1:00 p.m. ET. Registration is required for participation, but free to all CUPA-HR members. To register, please visit the event’s web page.



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  • Supreme Court Issues Decision Regarding Retirement Plan Fiduciary Duties in Hughes v. Northwestern – CUPA-HR

    Supreme Court Issues Decision Regarding Retirement Plan Fiduciary Duties in Hughes v. Northwestern – CUPA-HR

    by CUPA-HR | March 18, 2022

    On January 24, the Supreme Court issued its unanimous decision in Hughes v. Northwestern University, a case dealing with 403(b) retirement plan fiduciary duties under the Employee Retirement Income Security Act (ERISA). The court criticized the standard applied by the lower courts and sent the case back to the 7th Circuit to reevaluate the plaintiffs’ allegations.

    In the case, the three plaintiffs, all current or former employees of the university, alleged the plan fiduciaries violated the duty of prudence standard under ERISA by “(1) failing to monitor and control recordkeeping fees, resulting in unreasonably high costs to plan participants; (2) offering mutual funds and annuities in the form of ‘retail’ share classes that carried higher fees than those charged for otherwise identical share classes (institutional share class) of the same investments; and (3) offering investment options that were likely to confuse investors.”

    In their decision, which was written by Justice Sotomayor, the court explained that, when determining if a plan fiduciary violated the duty of prudence standard under ERISA, courts must engage in “a context-specific inquiry of the fiduciaries’ continuing duty to monitor investments and to remove imprudent ones” as articulated in Supreme Court precedent, Tibble. The court said the 7th Circuit was wrong in concluding that by providing a choice of investment options, plan fiduciaries insulated themselves from liability claims. It is important to note that the court chose not to weigh in on the plausibility of the plaintiffs’ claims, only on the standard applied by the lower courts.

    CUPA-HR, along with 17 other higher education associations, participated in an amicus brief filed in the case. In the brief, we supported the 7th Circuit’s decision in favor of Northwestern University. We explained, “The question in this case is whether petitioners have pleaded sufficient facts to state a plausible claim for breach of fiduciary duty in administering a retirement plan” under ERISA, but the complaints in this case “overlook important features of the university retirement system and ignore the discretion ERISA affords to plan fiduciaries.” We also clarified that universities and plan fiduciaries “must have the flexibility o administer the plans based upon the particular needs and preferences of the plan participants, without constant second-guessing.”

    The 7th Circuit now has the opportunity to revisit the case. It may choose to dismiss much of the case or review the record again.

    Following the decision, our amicus briefing counsel was quoted saying, “Despite some of the early headlines that have already been written suggesting this case is a really big deal, in fact, I view this as a limited ruling… [T]he Supreme Court did not reach any specific or detailed conclusions that any of the investments offered by the defendants in this case are actually inappropriate, nor did the justices come down and say a fiduciary can never offer retail shares of funds within their institutional retirement plans. Instead, what they said, in a nutshell, is that the 7th Circuit simply did not give enough consideration of the duty-to-monitor precedents set by Tibble.”

    Importantly, the final sentence of the Supreme Court’s decision provided a silver lining; “At times, the circumstances facing an ERISA fiduciary will implicate difficult tradeoffs, and courts must give due regard to the range of reasonable judgments a fiduciary may make based on her experience and expertise.” The court here is clarifying that fiduciaries must be given due deference when making tough decisions.

    That being said, the decision could pave the way for more cases on fiduciary duties to be filed, as plaintiffs’ attorneys may take advantage of the potential opening in order to force settlements.



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