Higher Education Report

Higher Education Report

Deadlines Applicable to Colleges and Universities Approaching for Participation in SEC’s Continuing Disclosure Cooperation Initiative

Posted in Securities and Exchange Commission

OVERVIEW

On March 10, 2014, the Securities and Exchange Commission (“SEC”) announced a voluntary self-reporting program for issuers and underwriters of municipal bonds for reporting of inaccurate statements made in offering documents regarding prior continuing disclosure compliance through a program called the Municipalities Continuing Disclosure Cooperation Initiative (the “MCDC initiative”).

The MCDC initiative permits issuers and obligated persons, for a limited time only, to self-report misstatements concerning prior compliance with continuing disclosure obligations in an official statement for a municipal bond issue.  In exchange, the SEC Division of Enforcement agrees to recommend favorable settlement terms for issuers and obligated persons involved in the offering of those municipal bonds. The Division of Enforcement has warned that it will likely recommend seeking significant financial sanctions against issuers and obligated persons that elect not to participate in the MCDC initiative and that are determined to have made material misstatements in an official statement concerning their prior compliance with their continuing disclosure obligations.

Both underwriters and issuers (a term which includes colleges and universities as obligated persons) can participate in the MCDC initiative by completing a questionnaire and submitting it no later than September 10, 2014 in the case of underwriters, or December 1, 2014 in the case of issuers and obligated persons.

The MCDC initiative potentially applies to all colleges and universities that issued tax-exempt debt during the last five years.

CONTINUING DISCLOSURE

For official statements for bonds issued on behalf of a college or university, institution is considered to be the issuer with responsibility for the various statements in the official statement, including statements concerning its prior compliance with its continuing disclosure obligations.  Generally, under SEC Rule 15c-2(12), colleges or universities are required to describe failures to comply with prior continuing disclosure obligations over the last five years.

Since 1993, SEC Rule 15c-2(12) has obligated underwriters to require colleges or universities to enter into continuing disclosure agreements that mandate annual filing of audited financial statements and certain financial and operating data for dissemination to the municipal marketplace.
The obligation to provide continuing disclosure applies to most long-term bond issues with the exception of certain variable rate demand bonds secured by letters of credit.

Under most continuing disclosure agreements, a college or university is required to file its annual financial statements and certain operating and financial data with designated repositories, currently the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access (“EMMA”) system within 180 days of the end of each fiscal year.

Colleges and universities must also file notices of certain material events.  Material events include:

(a)        principal and interest payment delinquencies;

(b)        non-payment related defaults, if material;

(c)        unscheduled draws on any debt service reserves reflecting financial difficulties;

(d)       unscheduled draws on credit enhancements reflecting financial difficulties;

(e)        substitution of credit or liquidity providers, or their failure to perform;

(f)        adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB), or other material event notices or determinations with respect to the tax status of the bonds, or other material events affecting the tax status of the bonds;

(g)        modifications to the rights of holders of the bonds, if material;

(h)        bond calls, if material, and tender offers;

(i)         defeasances;

(j)         release, substitution, or sale of property securing repayment of the bonds, if material;

(k)        rating changes;

(l)         any bankruptcy, insolvency, receivership or similar event of the obligor;

(m)       the consummation of a merger, consolidation or acquisition involving the obligor or the sale of all or substantially all of the assets of the obligor, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and

(n)        appointment of a successor or additional trustee or the change of name of a trustee, if material.

Notices of material events are generally required to be filed within ten (10) business days of the occurrence of the material event.

CONTINUING DISCLOSURE COMPLIANCE PROBLEMS

Generally, under SEC Rule 15c-2(12), colleges and universities are required to describe failures to comply with prior continuing disclosure obligations over the last five years.  There is a five year statute of limitations for SEC enforcement actions so the MCDC initiative covers potential continuing disclosure compliance misstatements or omissions in official statements published within the past five years.

SEC SETTLEMENT TERMS

Under the MCDC initiative, if the SEC Division of Enforcement concludes that there has been a violation, the SEC settlement would require the college or university to do the following as part of an agreed cease and desist order resolving the SEC proceeding:

  • Establish policies, procedures and training regarding continuing disclosure obligations within 180 days;
  • Comply with existing continuing disclosure undertakings and bring all prior filings up to date within 180 days of institution of the proceedings;
  • Cooperate with any subsequent investigation by the SEC Division of Enforcement regarding  the false statements, including the roles of individuals and/or other parties involved (underwriters, financial advisors, attorneys);
  • Disclose in a clear and conspicuous fashion the settlement terms in the final official statement for any offering by the college or university within five years of the date of institution of the proceeding; and
  • Provide the SEC staff with a compliance certification regarding the applicable continuing disclosure undertakings by the college or university on the one year anniversary of the date of institution of the proceedings.

PRISONER’S DILEMMA

The MCDC initiative creates tension between obligors and underwriters, or what is called a “prisoner’s dilemma.”.  Both the college or university and the underwriter are required to self-report any material misstatement or omission in a final official statement concerning prior compliance with continuing disclosure obligations.  If one party self-reports and the other does not, a problem arises for the second party if the SEC staff determines that the facts warrant an enforcement action.  The MCDC initiative is clear that favorable settlement terms are only available for institutions and underwriters that elect to self-report.  The SEC’s Division of Enforcement has stated that it will likely recommend and seek financial sanctions in amounts greater than those available under the MCDC initiative.

Another complication is that the MCDC initiative only applies to institutions and underwriters as entities.  Although a college or university may self-report and obtain a settlement under the predetermined terms, the SEC retains the right to seek enforcement action against individuals who may be culpable. This may include individuals working at the college or university, or third parties such as attorneys or financial advisors. This increases the difficulty in deciding whether and what to self-report.

WHAT TO DO

Any college or university that issued tax-exempt bonds in the last five years, it needs to review the statements made in the official statements concerning compliance with prior continuing disclosure obligations over the previous five years.  In the case of a bond issue in 2010, this would require examination of continuing disclosure filings from 2005.  If prior unreported continuing disclosure violations are discovered – failures to file, late filings, or non-reporting of material events that were not disclosed in an official statement – an analysis needs to be performed as to whether the misstatement or omission was “material.”.  “Material” is not defined in securities law or regulations and depends on the overall facts and circumstances of a situation.  One factor in this analysis is whether the failure would affect a bondholder’s confidence in the institution’s covenant to provide ongoing continuing disclosure.

In the first instance, a college or university may make its own determination as to whether or not to self-report certain violations on the grounds that they are immaterial.  For difficult cases, the MCDC initiative does provide a second review by the SEC staff.   The SEC will review each submission and only recommend taking the predetermined enforcement action if the misstatements or omissions were material.  Thus, a college or university may self-report while arguing that the circumstances disclosed are not material and should not result in enforcement action.  If, however, SEC staff determines otherwise, the institution is still entitled to accept the sanctions included in the MCDC initiative.

The ABA Journal is working on their annual list of the 100 best legal blogs. If you are a fan of this blog we would appreciate you taking the time to submit a Friend-of-the-Blawg Brief by 5 p.m. ET on Aug. 8, 2014. Following is a link to the submission form:  http://www.abajournal.com/blawgs/blawg100_submit/

 

Subject to Change: Department of Education Issues Latest Guidance on Campus SaVE Act VAWA Amendments and Cautions Against Reliance on Proposed Regulations

Posted in Clery Act

On July 14, 2014, the United States Department of Education issued a “Dear Colleague” letter reiterating its prior guidance to institutions for complying their Clery Act obligations under Campus SaVE Act provisions of the Violence Against Women Reauthorization Act of 2013 (“VAWA”).  Institutional obligations under the new statutory provisions affect the Clery Act Annual Security Report that institutions must issue by October 1, 2014.

During early 2014, the Department engaged in a negotiated rulemaking process that culminated in consensus on a set of draft regulations, and the publication of proposed regulations for public comment on June 20, 2014.  The Department has stated that it expects to publish final regulations by November 1, 2014, which would then become effective July 1, 2015.

Given the delay between the effective date of the new statutory requirements and the effective date of the new regulations, the Dear Colleague letter reiterates the Department’s expectation that, until the Department’s regulations are adopted in final form and become effective, institutions “must make a good-faith effort to comply with the statutory provisions as written.”  The Department cautions that the proposed regulations may be modified in response to public comments and, accordingly, that reliance on the proposed regulations will not necessarily ensure compliance.  In particular, the Department observed that “outside parties may be offering training to institutions on how to comply with the new requirements under the Clery Act. None of this training has been reviewed or endorsed by the Department and the Department is not bound by any statements made by these parties.  Moreover, we also remind institutions that the proposed regulations … may be changed after we review the public comments. Therefore, training which relies on the proposed regulations may not fully capture what is required for compliance once the final regulations are effective.”

While the Department is correct that compliance with the proposed regulations does not guarantee compliance with VAWA’s Clery Act provisions, and it is understandable that the Department wishes to distance itself from the various training programs being offered by private parties (many of which adopt conflicting approaches and interpretations of  the statutory requirements), the proposed regulations are certainly helpful in illustrating the Department’s current thinking as to the meaning of the statutory requirements.  As a result, it is difficult to envision an institution being criticized for designing interim compliance measures based on the proposed regulations, albeit with the knowledge that the requirements may change, and thus institutional policies and procedures may correspondingly need to be modified, upon adoption of the final regulations.  The key lies in ensuring that measures implemented now are indeed revisited to ensure conformity with the final version of the regulations, rather than being adopted and simply left “on the shelf.”

Lab Safety – Yet Another Harsh Reminder

Posted in Risk Management
Image courtesy of Photokanok / FreeDigitalPhotos.net

Image courtesy of Photokanok / FreeDigitalPhotos.net

Institutions make great efforts to ensure that their research labs are safe for students and staff, because it is the right thing to.  Even then, accidents can happen that puts those working in these labs in harm’s way. A recent LA Times report highlights what can go wrong, for all involved.

According to the report, in 2008, a 23 year old recent graduate who went to work in a University lab as a staff research assistant was fatally burned in a lab accident at UCLA.  The student was handling a syringe containing tert-Butyllithium, which can ignite spontaneously in air.  She died of injuries she suffered 18 days after the accident. It was alleged that the research assistant was relatively inexperienced, had been provided little training and was not wearing a protective lab coat.

Felony charges were brought against both the University and the faculty member for whom she worked in what is believed to be the first time criminal charges have been filed in a fatal university lab accident.  In 2012, three felony counts were dropped against the University after it agreed to new safety measures and funded a $500,000 scholarship in the research assistant’s name.

Criminal charges lingered against the faculty member.  He faced four felony counts and up to 4 ½ years in prison.  Just about two weeks ago, a plea bargain was also reached in connection with the charges against the faculty member.  Under the plea, the criminal charges will be dropped in five years and he will avoid a prison term, provided he develops and teaches an organic chemistry course for college-bound inner-city students for five summers, completes 800 hours of non-teaching community service in the UCLA Hospital System, and pays $10,000 to a designated burn center in lieu of restitution.

This case should serve as one more stark reminder to institutions and faculty, individually, of the risks associated with not ensuring lab safety for those in their charge.

Amicus Briefs Submitted to NLRB on Appeal of Northwestern University Decision

Posted in Higher Education

As previously noted in this blog, the National Labor Relations Board (“NLRB”) has sought amicus curiae briefing in the Northwestern University and College Athletes Players Association matter on review of the NLRB Regional Director’s decision that the University’s grant in aid scholarship football players are employees and the subsequent direction of election.  A number of interested parties, including the Higher Education Council of the Employment Law Alliance (“HEC-ELA”), filed amicus curiae briefs in support of Northwestern University, the putative employer, in the case.  Bond, Schoeneck & King, PLLC, a member of the HEC-ELA, served as counsel on the amicus brief along with a number of other law firms.  To download or read the HEC-ELA amicus curiae brief, please click here.

The NLRB’s decision in the Northwestern University matter could have far reaching implications, not only for Division I college athletes, but also for graduate students and others should the Board decide to revisit its ruling in Brown University, 342 NLRB 483 (2004).  After the Regional Director’s decision and direction of election, the NLRB did conduct an election, but those ballots have been impounded pending the outcome of the proceeding at the Board level.

New York’s Campus Safety Act: Proposed Legislation to Require Notice of Violent Felonies and Missing Persons

Posted in Campus Safety, Clery Act, Higher Education

The New York State Senate passed a bill today that would amend New York’s Campus Safety Act to require institutions, effective immediately upon its enactment, to notify law enforcement of any report of a violent felony or that a student who resides in institution owned or operated student housing is missing.  The proposed legislation, which was previously passed by the New York State Assembly on May 5, 2014, will now be presented to the Governor for signature.  Under the proposed legislation, institutions would be required to notify law enforcement as soon as practicable, but no later than 24 hours after receiving any such report.  The New York State Education Law currently requires institutions to adopt and implement plans for notifying law enforcement, but does not mandate that notification be given.

Under federal law, the Clery Act requires institutions to have a policy that encourages the reporting of all crimes to campus police and to law enforcement.  The Clery Act already requires institutions to notify law enforcement when any student who lives in on-campus housing has been determined to be missing for 24 hours.  Therefore, if the proposed legislation is enacted, institutions would comply with its missing student notification requirements by continued compliance with the notification procedures required under the Clery Act.

Notably, the proposed legislation’s reporting requirements “shall take into consideration applicable federal law, including, but not limited to, the federal Campus Sexual Assault Victims’ Bill of Rights under Title 20 U.S. Code Section 1092(f) which gives the victim of a sexual offense the right on whether or not to report such offense to local law enforcement agencies.”  This language makes clear that if a sexual assault occurs which constitutes a violent felony under New York State law, an institution’s reporting requirements under the proposed legislation would give way to the rights of the victim under federal law to decide whether or not to report the incident.

New York City’s Human Rights Law Extends Protection to Unpaid Interns; Is New York State Far Behind?

Posted in Higher Education, Interns

internshipEffective June 14, 2014, the New York City Human Rights Law will extend its nondiscrimination protections to unpaid interns.  An intern is defined as “an individual who performs work for an employer on a temporary basis whose work: (a) provides training or supplements training given in an educational environment such that the employability of the individual performing the work may be enhanced; (b) provides experience for the benefit of the individual performing the work; and (c) is performed under the close supervision of existing staff.”

The amendment was enacted in response to Wang v. Phoenix Satellite Television US, Inc., a 2013 Southern District of New York decision which held that unpaid interns do not qualify as employees under the New York City’s Human Rights Law.

There is a similar effort underway to amend the New York State Human Rights Law, which could reach a Senate vote shortly.

This has implications for higher education institutions in New York City who host interns from other institutions on their campuses, as well as for their own students who intern off-campus.  And in those circumstances where an institution is sufficiently involved with a hosting employer that it could constitute a joint employer for employment law purposes with that hosting employer, there is the potential for additional exposure.  In this latter instance, the impact of the amendment could even extend to institutions outside of New York City (and the direct jurisdiction of the NYC Human Rights Law) that send students to intern with New York City employers.  The nondiscrimination policies of all these institutions should be reviewed to ensure that they appropriately address interns.

On a somewhat related note, lawyers from Bond recently submitted an amicus brief on behalf of the American Council on Education, and others, urging the Second Circuit to defer to higher education institutions on the value of unpaid internships in the context of federal wage-hour law.

What Are College and University Presidents Thinking?

Posted in Higher Education

university pillarInside Higher Education recently issued its 2014 Survey of College and University Presidents, conducted by Gallup, and it makes for some very interesting reading.  The survey results are based on responses from 846 college and university presidents and chancellors (and some other top administrators), with 438 responses from public institutions, 347 from private institutions and 37 from the for-profit sector.

The survey provides responses to questions covering government collection of data and reporting, budget and finances, sexual assault policies, race relations and the American Studies Association Boycott of Israeli universities.

With respect to the federal government’s efforts to collect and publish career data and other outcomes for graduates, about half of the respondents agreed that it was appropriate (with 17% strongly agreeing) for the government to do so.  However, only 13% agreed (2% strongly) that the government would accurately collect and report that data.

Just a little more than 60% of responding institutions indicated that they now report institutional average loan debt of graduates on their websites, with just under 60% reporting institutional job placement rates for graduates.  Far fewer reported average loan debts (19%) and job placement rates (45%) at the program level, although that information likely would be more valuable to students.  Interestingly, 53% reported that they should report program level debt and 74% reported that they should report program level job placement rates, raising the obvious question of why so many more institutions think they should report this information than actually do so.  Only a little more than 30% reported starting salaries of recent graduates, 9% reported income of graduates 5 years out, and only 4% reported income 10 years out.

While 62% of all respondents were confident that their institution’s financial model was sustainable over the next 5 years, that number dropped to 50% when looking at a 10 year horizon.  Interestingly, public and private non-profit institutions responded in those same percentages, but for-profit institutions showed greater confidence in the sustainability of their models with 73% agreeing that their financial model was sustainable over 5 years and 70% over 10 years.  Fifteen percent of all respondents did not have confidence that their institution’s model was sustainable over the next 5 years, and 22% lacked confidence when looking over 10 years.

Only 18% of all respondents agreed that reports of a significant number of higher education institutions facing an existential financial crisis are overblown, while 60% did not agree that these concerns are overblown.   Only 22% agreed that the economic downturn starting in 2008 was effectively over at their institutions, while 54% disagreed that this was the case on their campuses.

With respect to sexual assaults, 71% of all respondents agreed that higher education institutions, generally, need to improve the way they respond to sexual assault reports, while 95% felt that their own institutions handled sexual assault cases appropriately.  Forty-nine percent of all respondents felt that sexual assault allegations are best investigated by law enforcement, rather than the institution, while 30% disagreed with that view.

Similarly viewing their own campuses as better than “the rest,” 90% of all respondents felt that race relations on their campuses were excellent or good, while only 53% felt that was the case on campuses across the country.

The full survey, which contains considerably more information and breaks down survey responses by type of institution (public/private/for-profit and doctoral/masters/baccalaureate), is well worth reviewing.

Confidentiality and Title IX

Posted in Discrimination, Students, Title IV

doe-logoIn OCR’s April 2011 Dear Colleague Letter, OCR referenced a covered institution’s obligations in the face of knowledge of sexual harassment/misconduct and a victim’s request for confidentiality and/or that the institution not act on the report, but did not provide particularly helpful guidance on how an institution is to balance those competing concerns.  Its recent Questions and Answers on Title IX and Sexual Violence (“Q&A”) provide a little more help.

Title IX requires that an institution with notice of sexual harassment/misconduct act to end and remedy that harassment/misconduct.  Notwithstanding this obligation, OCR has made clear that it “strongly supports” a student’s interest in confidentiality and, while it recognizes that there may be instances where an institution must deny a student’s request for confidentiality in order to meet its Title IX obligations, it has now characterized those instances as “limited,” noting that even then information should only be shared with those individuals responsible for handling the institution’s response to the situation.

OCR’s Q&A confirms that when confronted with a student request for confidentiality, the institution must inform the student that honoring that request may impair the institution’s ability to fully investigate and respond to the incident (including disciplining or taking other action against a perpetrator).  As part of that discussion, the institution needs to explain to the student Title IX’s prohibition against retaliation, that it will take steps to prevent retaliation, and that it will take “strong responsive action” if retaliation occurs.

If a student still insists upon confidentiality, the institution is required to balance that request against its obligation to provide a safe and nondiscriminatory environment for all students, including the reporting student.  While not required, OCR believes that this is a determination best made by the Title IX coordinator.  The Q&A lists a number of factors to be considered in making this determination:

  • Have there been other complaints of sexual harassment/misconduct against the alleged perpetrator?
  • Does the alleged perpetrator have a history of arrests or records from a prior school indicating a history of harassment/misconduct?
  • Has the alleged perpetrator threatened further sexual harassment/misconduct against the complainant, or others?
  • Was the harassment/misconduct perpetrated by multiple individuals?
  • Does the report of harassment/misconduct reveal a pattern of perpetration (e.g., via illicit use of drugs or alcohol) at a given location or by a particular group)?
  • Was a weapon involved?
  • Are there other means of obtaining relevant information?

If an institution determines that it cannot provide confidentiality, it should inform the student prior to making any disclosure.  In addition, the institution needs to consider interim measures necessary to protect the student and ensure the safety of other students.  If the reporting individual requests the institution to inform the alleged perpetrator that he or she had asked the school not to investigate or seek discipline, the institution should honor that request and inform the alleged perpetrator that the decision to proceed is an institutional decision.

In situations where an institution determines that it can honor a request for confidentiality, the institution is not relieved of its duty to act.  There may be any number of steps an institution may take, and may have to take, without identifying the reporting individual or commencing disciplinary proceedings.  For example, the Q&A specifically references increased monitoring, supervision or security at locations or activities where the misconduct occurred; providing training and educational materials for students and staff; changing or publicizing the institution’s policies on harassment/misconduct; and conducting climate surveys on harassment/misconduct. Where many students are involved, an alleged perpetrator may be put on notice of the allegations and counseled appropriately, without revealing the identity of any reporting student.

Finally, even where confidentiality is provided, institutions must take other steps (beyond confidentiality) necessary to protect the reporting individual, including providing support services and/or changing living arrangements, course schedules, assignments or tests.

Certainly, OCR’s recent Q&A provides clearer insight into OCR’s view of requests for confidentiality (which are usually actually requests that the institution “not do anything”).  However, institutions should understand that even this amount of guidance does not answer all of the vexing questions, or insulate an institution from all possible liability, in the face of a request for confidentiality.  Unfortunately,   hindsight is 20/20.  If an institution honors a request to not proceed with disciplinary action, and if the perpetrator offends again, it may very well be that OCR (or, even worse, a jury) may conclude that the institution made the wrong call.  Conversely, if an institution pursues a perpetrator over a victim’s objections, and if the victim suffers extreme distress as a result, the institution may be found at fault for that situation.

In sum, while OCR’s guidance is helpful, the landscape remains a dimly lit path fraught with “damned if you do; damned if you don’t” eventualities.  Institutions will need to proceed with caution and with a full view of the consequences of any decision.  It pays to recall that, while OCR’s view is a major consideration, it is not the only consideration or source of potential liability or backlash.  Unfortunately, real life situations rarely reduce to simple decisions.

Is the NLRB’s Brown University Decision on Its Last Leg?

Posted in National Labor Relations Board, Unionization

nlrbThe National Labor Relations Board’s treatment of college and university students as “employees” covered by the National Labor Relations Act has been the subject of a tortured history.

In the Fall of 2000, in a case involving NYU, the NLRB held that graduate assistants could be employees under the Act and therefore subject to the Act’s protections for organizational activity and collective bargaining.  Thereafter, in a number of cases, including one involving Brown University (“Brown I”), the Board rejected arguments that the work of research assistants, teaching assistants and similar graduate student positions were closely tied to their degree requirements such that it constituted more of an educational, rather than economic relationship and concluded that graduate assistants could be employees under the Act.  Then, in 2004, in a second case involving Brown University (“Brown II”), the Board made a sharp return to its earlier position, expressly overruling NYU, and deciding that graduate student teaching and research assistants are not statutory “employees” under the NLRA.

Based on Brown II, NYU withdrew recognition from its graduate assistants who had earlier voted for representation by the UAW.  Eventually, a later group of graduate students organized again and petitioned for a union representation election at NYU in Manhattan and NYU’s then recently-acquired Polytechnic Institute in Brooklyn (separate election petitions were filed in the Manhattan and Brooklyn Regional Offices of the NLRB).  The petitions were dismissed at the Region level, without a hearing, on the authority of the Brown II decision.  The petitions were remanded for further consideration by the Board, but after a hearing, the petitions were again dismissed at the Region level on the authority of Brown II.  The Board granted a request for review of the dismissal and asked for amicus briefs on whether Brown II should be overruled, setting the stage for yet another reversal .

However, in November of 2013, NYU and the UAW reached an agreement, pursuant to which NYU agreed to recognize and bargain with the union if a majority of graduate assistants voted in favor of joining the union.  The pending Board petitions were subsequently dismissed as moot, removing at least temporarily the possibility that the Board could once again reverse course and overrule Brown II.

As we noted in an earlier post, the Board granted Northwestern University’s request for review of the recent Regional Director’s decision directing an election in a unit of grant-in-aid scholarship football players at Northwestern.  Thus it seemed the stage was set for the Board to revisit the student/employee issue yet again.

Yesterday, the Board issued a Notice and Invitation to File Briefs to interested parties in the Northwestern case.  The Notice expressly raises six questions that parties were invited to brief.  Question 2 is:

Insofar as the Board’s decision in Brown University, 342 NLRB 483 (2004), may be applicable to this case, should the Board adhere to, modify, or overrule the test of employee status applied in that case, and if so, on what basis?

It is now evident that the Board indeed has found the vehicle it needs to once again flip flop on the issue of students/employees.

Responsible Employees and Title IX

Posted in Discrimination, Students, Title IX, Uncategorized

university archUnder Title IX, the concept of “responsible employee” has a great deal of significance, as recently reaffirmed by OCR in its Questions and Answers on Title IX and Sexual Violence (Q&A), and previously reported in this blog.

OCR deems an institution to have notice of student-on-student sexual harassment and/or misconduct if a “responsible employee” knew, or in the exercise of reasonable care should have known, that harassment/misconduct occurred.  And, of course, it is that knowledge that triggers an institution’s obligation to take appropriate steps to investigate and, as appropriate, end and remedy that harassment/misconduct.  Responsible employees also have the initial obligation to report incidents of sexual harassment/misconduct to the Title IX coordinator (or other appropriate designee).

So who is a “responsible employee” in the eyes of OCR?  While OCR’s Q&A may provide some clarification of this very significant issue, it continues to leave a number of unanswered questions for colleges and universities.

At one place in its Q&A, OCR provides that a responsible employee is any employee:

(a)  who has the authority to take action to redress sexual harassment/misconduct;

(b)  who has been given the duty of reporting incidents of sexual harassment/misconduct or any other misconduct by students to the Title IX coordinator or other appropriate designee; or

(c)  who a student reasonably believes has this authority or duty.

(The standard provided in the Q&A actually refers to “sexual violence,” not sexual harassment/misconduct, but in a note OCR makes it clear that the same standards apply to sexual violence and “other forms of sexual harassment,” which would include sexual assault.  We use the broader reference to sexual harassment/misconduct for this discussion.)  Continue Reading