by Kent Greenfield, a Professor of Law and the Dean’s Research Scholar at Boston College, where he is the faculty adviser for the ACS student chapter. He is the author of the forthcoming Corporations Are People Too (And They Should Act Like It). Follow him on Twitter @Kentgreenfield1
If government employees can object to funding a union’s political activity, should shareholders have the right to object to a corporation’s? The Supreme Court has answered no, and a new case risks making the gap between the rights of dissenting employees and dissenting shareholders more stark.
But there is good reason to treat shareholders and employees differently.
The tension arises from two lines of free speech cases. One protects corporations’ right to spend money in elections while another allows government employees to opt out of their share of union dues. These cases have little in common at first glance. But the corporate spending cases assume that shareholders have no right to object, while the union cases enshrine the right to object as a constitutional value.
In January, the Court heard arguments in Friedrichs v. California Teachers Association. That case is a challenge to the 1977 case Abood v Detroit Board of Education, which allowed unions to charge employees they represent a fair share of the costs of collective bargaining. Objecting employees can refuse to fund a union’s political involvement, the Court said, but had to pay for non-political activity. Court watchers believe the justices will use Friedrichs to expand government employees’ rights to object to include the non-political.
Meanwhile, the Court’s protections of corporate speech pay little heed to the interests of dissenting shareholders. In Citizens United v Federal Election Commission six years ago (how time flies!), the Court rejected the argument that shareholders should be protected from corporate spending with which they disagreed. “Allowing government to use the excuse of protecting shareholder rights to stifle the speech of private, voluntary organizations undermines the First Amendment,” said the Court. Critics are already blasting the Court’s apparent inconsistency. Corporations can engage in political activities without concern for the views of shareholders, but unions must offer objecting employees an opt-out from paying even for collective bargaining?
But it is a false analogy.
Let me be clear. Overruling Abood would be a mistake, and Citizens United was a blunder. But shareholders and employees are not the same.
Unions are associations, united by a common and collective purpose. The union itself has a legal duty to represent the interests of its members and others in the bargaining unit. And the union is financed by contributions from its members and others who benefit from its representation.