August 24, 2016

NLRB Reverses Position on Grad Student Assistants, Allowing Them To Unionize

By Steven Gutierrez

Overruling its 2004 Brown University decision, the National Labor Relations Board (NLRB or Board) decided that graduate student assistants at private colleges and universities can be considered statutory employees under the National Labor Relations Act (NLRA), permitting them to organize and form a union. Columbia University, 364 NLRB 90 (August 23, 2016). The Board concluded that student assistants who perform paid work at the direction of their university have a common-law employment relationship with the university and therefore, are entitled to the protections of the NLRA.

Why Brown University Was Wrong

The 2004 Board that decided this issue in Brown University ruled that graduate assistants could not be statutory employees under the NLRA because they are primarily students and have a primarily educational relationship with the university, not an economic one. The current Board rejected that view, finding that because student assistants perform work, at the direction of the university, for which they are compensated, they are statutory employees and the fact that there may be another relationship not covered by the NLRA, namely an educational relationship, did not foreclose their coverage as employees.

The current Board also disagreed with the Brown University Board’s “fundamental belief that the imposition of collective bargaining on graduate students would improperly intrude into the educational process and would be inconsistent with the purposes and policies of the [NLRA].” Instead, this Board believes that allowing grad assistants to be covered employees meets the “unequivocal policy” of the NLRA to encourage the practice and procedure of collective bargaining, and will make sure that an entire category of workers are not deprived of the protections of the law.

Multiple Flip-Flops On Graduate Assistants

In overruling Brown University, the Board’s position returns to the position held in the 2000 New York University (NYU) ruling, which itself was overruled in Brown University. Prior to the NYU ruling, however, the Board had long held that various student assistants could not be included in petitioned-for bargaining units.

This new flip-flop on the issue of coverage for graduate student assistants is not surprising given the leanings and make-up of the majority of the current Board, which has favored the extension of coverage and its jurisdiction, when possible. Board member Philip Miscimarra dissented in this case, writing that he agreed with the Brown University reasoning that graduate student assistants have a predominately academic, rather than economic, relationship with their school. He would not have overruled Brown University, or permitted the petitioned-for bargaining unit to proceed.  Read more >>

August 23, 2016

Employer Violates NLRA By Barring Employees From Bringing Class or Collective Actions, Says Ninth Circuit

By Brian Mumaugh

Bad news for employers in the ongoing saga of whether an employer violates the National Labor Relations Act (NLRA) by requiring that employees pursue any legal dispute against the company on an individual basis, rather than in a class or collective action with other employees. The Ninth Circuit Court of Appeals recently ruled that the NLRA precludes employees from waiving their right to have disputes heard collectively and an employer that requires employees to waive that right as a condition of employment commits an unfair labor practice. Morris v. Ernst & Young, LLP, No. 13-16599 (9th Cir. August 22, 2016).

Broad Ruling Extends To Any “Separate Proceedings” Requirement

Accounting firm Ernst & Young required its employees to sign agreements mandating that all legal claims against the firm be pursued exclusively through arbitration and only as individuals in “separate proceedings.” When employee Stephen Morris brought a class and collective action in federal court alleging that the firm misclassified employees denying them overtime pay under the Fair Labor Standards Act, Ernst & Young sought to compel arbitration on an individual basis pursuant to its arbitration agreement. The district court agreed, dismissing the federal court case and ordering arbitration.

Morris appealed, arguing, among other things, that the “separate proceedings” clause violated the NLRA. Morris relied on determinations by the National Labor Relations Board (the Board) in the D.R. Horton  and Murphy Oil cases in which the Board ruled that concerted action waivers violate the NLRA. The Ninth Circuit agreed. It ruled that when an employer requires employees to sign an agreement precluding them from bringing a concerted legal claim regarding wages, hours, and terms and conditions of employment, the employer violates the NLRA.

The Court focused on the Board’s interpretation of the NLRA’s statutory right of employees “to engage in . . . concerted activities for the purpose of . . . mutual aid or protection” to include a right to join together to pursue workplace grievances, including through litigation. It characterized this as a labor law case, not an arbitration case. It stated that the problem with the contract was not that it required arbitration, but that it excluded all concerted employee legal claims. The Court explained that the same problem would exist “if the contract required disputes to be resolved through casting lots, coin toss, duel, trial by ordeal, or any other dispute resolution mechanism, if the contract (1) limited resolution to that mechanism and (2) required separate individual proceedings.” Read more >>

August 12, 2016

Notice Required By Colorado’s New Pregnancy Accommodation Law

By Besse H. McDonaldDORA notice

As we reported here, effective August 10, 2016, Colorado employers must provide a reasonable accommodation to applicants and employees for health conditions related to pregnancy or physical recovery from childbirth, absent an undue hardship. Along with the new accommodation requirement, Colorado employers also must post a notice of employee rights under the new law as well as provide written notice to new hires at the start of employment and existing employees no later than December 8, 2016. The Colorado Civil Rights Division (CCRD) has published a suggested notice that it deems compliant with the new law.

Available in both English and Spanish on the CCRD’s website, the two-page notice informs employees of the new pregnancy accommodation requirement under Colorado’s anti-discrimination laws. Be sure to print off copies of the notice to post in a conspicuous place in your business in an area accessible to employees, such as break rooms or near employee entrances, where other required employment law notices are posted. Then take steps to provide the notice to your existing employees no later than December 8, 2016 and to all new hires going forward.

July 21, 2016

Wyoming’s New Workplace Safety Division: What Employers Need to Know

6a013486823d73970c01b8d207db1d970c-320wiBy Trey Overdyke 

In early May, the Wyoming Department of Workforce Services (DWS) announced the launch of a new unit of safety advisers offering free health and safety consultations to Wyoming employers upon request. Does the launch mean Wyoming employers will soon have an additional layer of occupational safety and health staff to worry about? In this article, I will try to read the tea leaves and offer my perspective.

Focus on Injury Prevention, Workers’ Comp Trends 

The DWS’s standards and compliance staff, in consultation with Governor Matt Mead, recently created the Workers’ Compensation Safety and Risk Unit (WCSRU). According to DWS Director John Cox, the new unit represents a “reorganization” that is designed to provide more employers safety consultations and offer the potential for lower workers’ compensation premiums.

The WCSRU is composed of nine recommissioned Wyoming Occupational Safety and Health Administration (WOSHA) consultation staff members. The WCSRU will focus on conducting workplace health and safety surveys without the risk of fines or penalties. The unit is also expected to offer detailed analysis of workers’ comp data to assist in identifying injury trends and developing best practices for preventing workplace injuries and illnesses.

Wyoming Has Highest Worker Death Rate in Nation

According to the U.S. Bureau of Labor Statistics (BLS), Wyoming had 37 workplace fatalities in 2014, the latest year for which statistics are available. With 13.1 fatalities per 100,000 workers, Wyoming has the highest worker death rate in the country. The national average for 2014 was 3.3 deaths per 100,000 workers. In Wyoming, transportation incidents accounted for the largest number of workplace deaths. Workplace violence, other injuries caused by persons or animals, and falls, slips, and trips caused deaths as well.

Because of the high fatality numbers, in 2015, legislators introduced bills designed to strengthen workplace safety regulations in Wyoming. Two of the bills would have increased penalties for violations of safety rules, including raising the maximum fine for a violation that causes a worker’s death to $250,000. Another bill would have allowed Wyoming to implement workplace safety rules that are stricter than similar federal safety rules, a practice that is currently barred. None of the bills passed.

WCSRU’s Role

As you know, WOSHA is responsible for enforcing occupational safety and health standards in Wyoming. WOSHA plans to adopt all federal Occupational Safety and Health Administration (OSHA) standards. WOSHA is permitted to adopt its own standards only if there are no corresponding OSHA standards. Wyoming has unique health and safety standards covering oil and gas well drilling, servicing, and special servicing as well as a standard for anchoring drilling rigs. WOSHA imposes the same record-keeping and reporting standards required by OSHA.

So the question is, how will the WCSRU interact with and affect the work of WOSHA staff? The new unit is expected to overlap with WOSHA in some ways. Both organizations’ staff will conduct health and safety surveys for employers to identify and remedy safety hazards in the workplace. However, according to the DWS’s news release, the WCSRU will bypass “time-consuming federal requirements, which add an extra layer of reporting and operational constraints . . . and limit the services [the] DWS is able to provide.”

Bottom Line

Several Wyoming agencies will be paying close attention to the WCSRU for the next few years. We expect to hear a number of success stories from Wyoming employers in many industries. However, read the fine print before initiating a consultation. If an employer and the WCSRU disagree on a hazard abatement, there does not appear to be a clear procedure to resolve the dispute. Further, if there is a dispute, you cannot eliminate the possibility that the WCSRU will refer the issue to WOSHA for enforcement.

We will share our experiences with the WCSRU as the unit works its way across Wyoming.

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July 15, 2016

Executive Compensation for Tax Exempt and Governmental Employers: Unraveling New Proposed Regulations on Non-Qualified Deferred Compensation Under Section 457

By Bret Busacker and John Ludlum

Nearly 40 years ago, Congress concluded that because tax-exempt employers are not subject to taxation, they are more inclined (more so, at least, than taxable employers) to provide non-qualified deferred compensation to their employees. As a result, Congress passed Section 457 of the Internal Revenue Code (Section 457) to limit the amount of deferred compensation a tax-exempt employer may promise to its employees.  Now, the IRS has proposed new regulations that will greatly impact non-qualified deferred compensation plans maintained by tax-exempt employers under Section 457. Here are our key takeaways from the proposed regulations.

Background on Section 457 Arrangements

Section 457 generally separates non-qualified deferred compensation arrangements into two types of programs and regulates these two types of plans in different ways.

  1. Eligible Plans: if a deferred compensation program is designed to look much like a 401(k) plan and provides limited benefits (capped at $18,000 in 2016), the arrangement is subject to Section 457(b) which allows the deferred amounts to avoid taxation until distributed to the employee.
  1. Ineligible Plans: if a deferred compensation arrangement provides larger or different benefits than those permitted under eligible plans, the arrangement is likely subject to Section 457(f) which means that the deferred amounts become taxable when they are no longer subject to a substantial risk of forfeiture (i.e., when they become vested).

The newly proposed IRS regulations will significantly affect ineligible plans.

Substantial Risk of Forfeiture Is the Name of the Game

In an attempt to even the playing field with taxable employers not subject to Section 457(f), tax-exempt employers often pushed the envelope with ineligible plans by using various tactics to delay the vesting date of deferred compensation. These tactics created uncertainty regarding what constitutes a substantial risk of forfeiture. The proposed Section 457 regulations address these important 457(f) design tactics in a mostly favorable way for tax-exempt employers:

A. Current Compensation Deferrals

The IRS currently takes the position that salary deferrals cannot be made to ineligible plans because such amounts are already vested when they go into the plan. In other words, they cannot escape taxation at the time of deferral. Under the proposed Section 457 regulations, employees may defer current compensation if the following requirements are met:

  1. The employer must provide a match of more than 25% of the amount the employee contributes.
  2. The employee must commit to provide additional substantial services for at least two years in order to receive both the deferral and the match.
  3. The deferral election must be made in writing and document the employee’s agreement to continue service. To defer current compensation, the deferral election must be made prior to the beginning of the year to which the compensation relates.

B. Rolling Risk of Forfeiture

Historically, some ineligible plans were designed to allow the employer and employee to agree to push out the vesting date of an amount payable under the arrangement (and thereby push out the time of taxation), referred to as rolling the risk of forfeiture. But practitioners worried that by pushing out the vesting date, the arrangement became subject to, but did not comply with, Section 409A, which would make the compensation taxable.

The proposed regulations will legitimize the practice of rolling the risk of forfeiture, provided that the election to push out the vesting date occurs at least 90 days prior to the date the compensation would have otherwise vested. The election to roll the risk of forfeiture also must otherwise comply with the general requirements applicable to deferring current compensation, as summarized in paragraph A above.

C. Non-Competes

Another tactic employers utilize to push out the vesting date of an ineligible plan in order to defer taxation of compensation is to condition the amounts payable under the ineligible plan on the employee adhering to the terms of a non-compete. Like the rolling risk of forfeiture, this practice too was called into question under Section 409A because Section 409A does not recognize non-competes as creating a substantial risk of forfeiture. If implemented, the proposed Section 457 regulations will legitimize this practice as well, subject to the following requirements:

  1. The right to the compensation must be clearly tied to adherence to the terms of the non-compete.
  2. The employer must make reasonable and regular efforts to verify adherence to the non-compete requirements.
  3. The facts and circumstances must support a bona fide interest of the employer in subjecting the employee to a non-compete and a bona fide interest of the employee, and the ability of the employee, to otherwise compete.


July 13, 2016

EEOC Revises Its Proposal To Collect Pay Data Through EEO-1 Report

By Cecilia Romero

6a013486823d73970c01b8d204e441970c-320wiOn July 13, 2016, the U.S. Equal Employment Opportunity Commission (EEOC) announced that it has revised its proposal to collect pay data from employers through the Employer Information Report (EEO-1). In response to over 300 comments received during an initial public comment period earlier this year, the EEOC is now proposing to push back the due date for the first EEO-1 report with pay data from September 30, 2017 to March 31, 2018. That new deadline would allow employers to use existing W-2 pay information calculated for the previous calendar year. The public now has a new 30-day comment period in which to submit comments on the revised proposal.

Purpose of EEOC’s Pay Data Rule 

The EEOC’s proposed rule would require larger employers to report the number of employees by race, gender, and ethnicity that are paid within each of 12 designated pay bands. This is the latest in numerous attempts by the EEOC and the Office of Federal Contract Compliance Programs (OFCCP) to collect pay information to identify pay disparities across industries and occupational categories. These federal agencies plan to use the pay data “to assess complaints of discrimination, focus agency investigations, and identify existing pay disparities that may warrant further examination.”

Employers Covered By The Proposed Pay Data Rule 

The reporting of pay data on the revised EEO-1 would apply to employers with 100 or more employees, including federal contractors. Federal contractors with 50-99 employees would still be required to file an EEO-1 report providing employee sex, race, and ethnicity by job category, as is currently required, but would not be required to report pay data. Employers not meeting either of those thresholds would not be covered by the new pay data rule.

Pay Bands For Proposed EEO-1 Reporting 

Under the EEOC’s pay data proposal, employers would collect W-2 income and hours-worked data within twelve distinct pay bands for each job category. Under its revised proposed rule, employers then would report the number of employees whose W-2 earnings for the prior twelve-month period fell within each pay band.

The proposed pay bands are based on those used by the Bureau of Labor Statistics in the Occupation Employment Statistics survey:

(1) $19,239 and under;

(2) $19,240 – $24,439;

(3) $24,440 – $30,679;

(4) $30,680 – $38,999;

(5) $39,000 – $49,919;

(6) $49,920 – $62,919;

(7) $62,920 – $80,079;

(8) $80,080 – $101,919;

(9) $101,920 – $128,959;

(10) $128,960 – $163,799;

(11) $163,800 – $207,999; and

(12) $208,000 and over.


July 6, 2016

Union Remains Active In Health Care Industry Despite Withdrawing Initiative To Cap California Health Care Executive Salaries

By Steve Gutierrez

The Service Employees International Union (SEIU) – United Healthcare Workers West (UHW) has twice tried to get an initiative on the California ballot to cap the salaries of executives at nonprofit hospitals. The union recently withdrew its latest ballot initiative, ensuring that it will not appear on this November’s ballot.

SEIU Sought To Cap Private Executive Salaries 

Called the “Charitable Hospital Executive Compensation Act of 2016,” SEIU’s initiative sought to limit the annual compensation packages paid to chief executive officers, executives, managers, and administrators of nonprofit hospitals and affiliated medical entities in California. The cap would be set at the annual salary of the U.S. President, currently $450,000. All executive compensation would be included in the cap, including salary, bonuses, stock options, paid time off, housing payments, loan forgiveness, and reimbursement for transportation, parking, entertainment or similar benefits. It would not include the cost of health or disability insurance or contributions to health reimbursement accounts.

The measure called for penalties for hospitals and covered physicians groups who violated the salary cap. Such penalties would include fines, revocation of tax-exempt status, and having an additional person sit on the nonprofit’s board of directors to represent the state Attorney General.

Protect Taxpayers or Organizing Tactic?

Filed in October of 2015, SEIU’s latest initiative stated that its purpose was to ensure that assets held for charitable purposes were not used to enrich executives, managers, and administrators of nonprofit hospitals. SEIU also stated that the total compensation packages for hospital executives should be reasonable and not excessive “in light of the substantial public benefit that the State tax exemption for nonprofit organizations conveys.” In essence, the union touted that taxpayers should not have to subsidize the multi-million dollar paychecks of administrators at tax-exempt healthcare entities.

In the past, the SEIU filed other California initiatives, including one to limit hospital prices and another to put more rules around charity care that could be provided by nonprofit hospitals. In exchange for the SEIU withdrawing those initiatives, the California Hospital Association (CHA) agreed to a contract with the SEIU in 2014 called the Code of Conduct which was intended to put obligations and restrictions on the conduct of each party. The Code expired by its terms on December 31, 2015, but not before the CHA filed a complaint against the SEIU alleging that its initiative to cap executive salaries violated the Code.

As revealed in the arbitration order, in which the arbitrator found that the SEIU did in fact violate the Code, the goals of the SEIU in pushing its healthcare industry initiatives were to increase its membership by reaching agreements with hospitals that provide them access to healthcare workers, and by working together with the hospitals to get Medi-Cal fully funded, which would support more jobs for union members. The initiatives therefore appear to be intended to pressure the hospitals into helping the SEIU organize workers and expand its membership.

Even though this specific salary cap initiative has been withdrawn, we can expect that the SEIU-UHW will continue its pressure tactics in organizing workers in the healthcare industry.

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June 28, 2016

MSHA Proposes Rule On Workplace Examinations At U.S. Metal and Nonmetal Mines

By Matt Linton Shutterstock_152684429gravel mine


The Department of Labor’s Mine Safety and Health Administration (MSHA) recently proposed a rule changing its standards for metal and nonmetal workplace examinations. Under the Federal Mine Safety and Health Act of 1977, mine operators must take actions to prevent conditions and practices that could cause injuries, illnesses, and death. Believing that the mining industry needs to improve mine site examinations to help identify and fix hazards, the proposed rule would require:

  • a competent person to examine the working place before miners begin work in that location;
  • mine operators to promptly notify miners of any conditions that may adversely affect their safety or health;
  • a competent person to sign and date the examination record before the end of each shift, with the examination record including a description of locations examined, conditions found and corrective actions taken; and
  • records to be made available for inspection by MSHA and miners’ representatives, with operators required to provide a copy of the records upon request.

Seeking To Eliminate Preventable Deaths

According to MSHA, 122 miners died at metal and nonmetal mines from January 2010 through mid-December 2015. The majority of those deaths, some 60 percent, were linked to violations of “Rules to Live By” standards, which are known to most frequently cause mining deaths.

“We believe that many of these fatalities could have been prevented with better working place examinations,” said Joseph A. Main, assistant secretary of labor for mine safety and health.  See MSHA’s full press release.   “MSHA has proactively provided notices to the mining industry on the need to improve mine site examinations, but now the time has come to require better, more effective examinations.” 

Changes Would Enhance Existing Working Place Exams 

MSHA has existing standards for working place examinations at 30 CFR 56.18002 and 30 CFR 57.18002, but MSHA believes that those standards require the enhancements articulated in the proposed rule to minimize the risk of preventable deaths. For example, under the current standards, a working place examination may be conducted at any time during the shift, rather than before the shift begins. MSHA also believes that the existing standards do not require mine operators to promptly notify minors of adverse conditions, do not address what must be included in the records of workplace examinations, and do not require mine operators to make its examination records available to miners’ representatives. Read more >>

June 24, 2016

Obama’s Immigration Policy Blocked Due to Equally Divided Supreme Court

Tsai_RBy Roger Tsai

A 4-to-4 decision by the Supreme Court on a challenge to President Obama’s immigration reform policy means that the policy continues to be blocked, disappointing five million undocumented immigrants who had hoped to stay and work in our country. The failure of the Court to come to a majority decision leaves a nationwide injunction by a Texas court in place, preventing implementation of the new immigration policy. United States v. Texas, 579 U.S. ___ (2016). The short nine word opinion fails to provide any reasoning for the Court’s decision or establish clear precedent.

DACA and DAPA Programs

At issue is President Obama’s November 2012 and 2014 immigration programs that would allow more undocumented immigrants to apply for the Deferred Action for Childhood Arrivals (DACA) and Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) programs. The pre-existing DACA program granted temporary two-year work permits to 1.2 million young people brought to the U.S. by their parents and remains unaffected. The administration’s new immigration policy sought to expand the DACA program, which allows eligible young people to apply for work permits and deportation deferrals, by increasing the deferral period from two to three years and eliminating the requirement that applicants be under 31 year old. Under the new DAPA policy, which applies to parents of children who are U.S. citizens or lawful permanent residents, undocumented parents would be permitted to stay in the United States for three years and work here legally.

States Sued To Stop Obama’s Immigration Reforms 

Before the President’s policy could go into effect, Texas and twenty-five other states went to court and got an injunction preventing implementation of the policy. The states asserted that the Obama administration did not have the authority to issue new immigration policy, arguing that sweeping immigration policy of this sort must be passed through Congress, not by the executive branch. In early 2015, a federal court in Texas issued an injunction blocking the enactment of the new policy while the legal issues were resolved. An appeals court upheld that ruling, leading to the appeal to the Supreme Court.

Next Steps For Immigration Reform

The federal government has the option of filing a rehearing petition in the Supreme Court, hoping for a different result if, and when, a ninth Justice is seated on the Court. Absent that, the case essentially goes back to the federal district court in Texas for further proceedings on the actual claims in the case. Because that judge had issued the preliminary injunction believing that the states would prevail on their claims, the government will have an uphill battle getting its policy through. In the meantime, the immigration reform is blocked, leaving an estimated five million undocumented workers and their children without relief.

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June 23, 2016

Affirmative Action Policy Upheld By Supreme Court

Huntington_CBy R. Calder Huntington

Race may be taken into account when public universities and colleges admit students, ruled the U.S. Supreme Court today. For the second time, the Court was asked to decide whether the University of Texas at Austin’s admissions policy, which uses a variety of affirmative action factors to increase the diversity of its student population, violates the Equal Protection Clause of the Constitution. In a 4-to-3 decision (with Justice Kagan taking no part in the decision), the Court ruled that the race-conscious admissions program in question is lawful under the Equal Protection Clause. Fisher v. University of Texas at Austin, 579 U.S. __ (2016).

White Applicant Denied Admission Challenged Policy

Abigail Fisher, a white applicant who was denied admission to the University of Texas at Austin, sued the University alleging that its use of racial preferences in undergraduate admissions decisions is unconstitutional. She asserted that by including race in its admissions decisions, the University disadvantaged her and other Caucasian applicants.

The District Court in Texas that considered Fisher’s claims ruled in favor of the University, and the Fifth Circuit Court of Appeals agreed. Fisher appealed to the Supreme Court and in 2013, the Court kept her claims alive by sending them back to the Fifth Circuit so that the University’s admissions policy could be evaluated under the proper strict scrutiny standard. The Fifth Circuit reexamined the policy but came up with the same result, ruling in favor of the University. Fisher appealed to the Supreme Court again.

Court Finds Compelling Interest In Diversity of Students

In Fisher I, the Court ruled that the University’s affirmative action process, in which race was only one factor in assigning a numerical admissions score, needed to further a constitutionally permissible and substantial purpose or interest in order to meet the strict scrutiny standard. In today’s decision, the Court found that the University’s desire to provide its students the educational benefits that flow from having a diverse student body was a compelling interest sufficient to overcome the strict scrutiny standard.

Fisher had argued that the University failed to state more precisely what level of minority enrollment would constitute a “critical mass” at which time race would no longer need to be an admissions consideration. The Court rejected Fisher’s argument, stating that the educational benefits promoted by a diverse student body should not be reduced to pure numbers, especially in light of the fact that the University is prohibited from having a quota for minority student enrollment.

The Court also rejected Fisher’s assertion that the University had already achieved “critical mass” of minority enrollment, finding that the University had studied both statistical and anecdotal evidence that showed that race-neutral programs had not achieved its diversity goals. In addition, the Court rejected Fisher’s position that there were other workable race-neutral means of meeting the University’s educational goals.

University Must Continue to Evaluate Use Of Race In Admissions 

Although a slim majority of the Court upheld the University’s ability to use race as a factor in its admissions policy, the Court wrote that the University has a continuing obligation to satisfy the burden of strict scrutiny in light of any changing circumstances. It stated that the University must conduct periodic reassessments of its admissions program and continue to examine data to ensure that “race plays no greater role than is necessary to meet its compelling interest” in promoting the educational benefits advanced by diversity among students. Read more >>