Corporate Governance

  • April 15, 2013
    Guest Post

    by Alicia Plerhoples, Associate Professor of Law, Georgetown University Law Center

    I recently had the privilege of participating in a meeting of some leading and well-respected labor attorneys and scholars. Many questions were posed. With the decline of participation in labor unions, gutting of workers’ rights through “Right to Work” state legislation, and attempts to dismantle the National Labor Relations Board, what other legal mechanisms can be employed for the benefit of workers? Specifically, how can corporate laws facilitate workers’ rights? We also deliberated many possible advocacy avenues under corporate law including the following:  

    Reframe the argument against Citizens United and align workers with shareholders against unchecked corporate boards and management. Citizens United v. FEC recognized free speech rights under the First Amendment for corporations, including labor unions. While some advocate that labor unions take advantage of Citizens United through increased campaign activity and spending, labor unions face an uphill battle against anti-worker groups financed by better-funded corporate interests and wealthy individuals. Rolling back Citizens United is currently part of a larger worker rights’ plan, and one way to execute that plan (and garner a broader base of support) is to align workers’ interests with shareholder interests.

    The Supreme Court got Citizens United wrong by brushing aside an important corporate constituency -- shareholders. Retired Justice John Paul Stevens’ dissenting opinion was correct to argue that the majority opinion ignored the rights of shareholders. When corporations are allowed to spend unlimited treasury funds on “electioneering communications,” the corporate board chooses all aspects of the political donations -- which political groups to donate to, the timing of such donations, and whether to donate at all. Shareholders are effectively forced to contribute their money to political issues, even those that they oppose. When a shareholder invests in a corporation -- and realize that anyone in the United States whoever wants to retire must invest in corporations, whether directly or through mutual funds -- the shareholder is doing so for one purpose: to make money.

  • March 12, 2013

    by Jeremy Leaming

    While President Obama has advanced some eloquent calls for expanding equality, his administration must take more action to ensure equality in the workforce, according to a new ACS Issue Brief.

    Landmark measures such as Title VII of the Civil Rights Act of 1964 and President Lyndon Johnson’s executive order banning federal contractors from employment discrimination have been undermined by federal judges far too eager to protect the rights of employers, write Ellen Eardley and Cyrus Mehri in “Defending Twentieth Century Equal Employment Reforms in the Twenty-First Century.” 

    Citing Simon Lazarus, an attorney with the Constitutional Accountability Center, Eardley and Mehri write that lower federal court judges “have been ‘aggressively activist in narrowing, undermining, and effectively nullifying an array of progressive statutes,’ including statutes involving civil rights and affirmative action.” Eardley and Mehri, attorneys with Mehri & Skalet, PLLC, also note that former federal court judge Nancy Gertner has “recently declared that ‘changes in substantive discrimination law since the passage of the Civil Rights Act of 1964 [are] tantamount to a virtual repeal.’”

    The authors also cite a study from the Harvard Law & Policy Review, the official journal of ACS, which reveals data showing that from 1979 through 2007 judges have increasingly sided with employers in employment discrimination cases and that the rare victories for workers are frequently invalidated at the appellate level. The study by Stewart J. Schwab and Kevin Clermont “found that the anti-plaintiff effect on appeal particularly disturbing because employment discrimination cases are fact-intensive and often turn on the credibility of witnesses.”

    And it’s not just the lower courts that have made it difficult for workers to challenge employer malfeasance, the authors add, noting that the U.S. Supreme Court has issued opinions making it tougher to bring class actions claims and providing federal courts with greater power to quickly dismiss workers’ employment discrimination cases.

    “The Draconian view of Title VII, distortion of the basic principles of civil procedure, and the new hurdles to class certification adopted by the federal judiciary make it difficult for employees to vindicate their rights,” Eardley and Mehri write.

  • October 3, 2012

    by Jeremy Leaming

    The Roberts Court is a tool of corporate America. At least that’s the gist of a new film from Alliance for Justice, called “Unequal Justice: The Relentless Rise of the 1% Court.”

    This of course is not news to those who pay attention to what the Supreme Court does, nor is it agreed upon. For instance the American Enterprise Institute, the Heritage Foundation, and the Chamber of Commerce likely see the Roberts Court as a protector of American capitalism – the place where almost anyone can lift themselves up by their bootstraps to become superrich.

    “The Roberts Court is basically a pro-business court,” Stanford Law School Professor and ACS Board member Pamela Karlan, says in the AFJ film. “They don’t have a desire to really open the federal courts up to suits by average Americans, either workers or consumers, or people who are injured by various products; it’s a pro-business court.” (Watch the film here or view below.)

    The film reminds us of the Court’s opinions that shut down a class action gender discrimination lawsuit against the retail giant Wal-Mart, overturned a woman’s lower court verdict against a company for years of gender discrimination, and found that corporate America has even more power to spend boatloads of money to sway elections.

    “The Citizens United’s impact has been dramatic,” says former U.S. Senator Russ Feingold and founder of Progressives United. “And since then our system is in the worst free-fall it’s been in since the Gilded Age, probably worse.”

    Even former Sen. John McCain (R-Ariz.), a rightwing policymaker, weighed in on blasting Citizens United as one of the most “misguided, naïve, uniformed, egregious decisions of the United States Supreme Court, I think in the 21st Century.”

    Katrina vanden Heuvel, editor and publisher of The Nation and narrator of the 20-minute film, said individuals have been shut out of the justice system by today’s Supreme Court, which “has decided that when everyday people run up against powerful corporate interests, the big corporations almost always win.”

    Some of the women behind the class action lawsuit against Wal-Mart explain their efforts to advance equality and deal with a stinging defeat.

    “The women of Wal-Mart brought the case to stand up for their right to be treated equally, but they never got that far,” Heuvel said. “The decision turned on whether their claims had enough in common. The conservative majority raised the hurdle for class actions, and made it harder to prove discrimination.”

  • September 17, 2012

    by Jeremy Leaming

    Yeah it’s Constitution Day, and we have a blog symposium for that. But today also marks the anniversary of a gathering of protests aimed at blasting the risky ways of large financial institutions that brought on a global meltdown and America’s Great Recession. Occupy Wall Street protests also railed against the increasing corporate control of politics, and helped raise awareness of economic inequality that undermines democracy.

    When those protests gathered steam and formed organization in places like New York’s Zuccotti Park, many right-wing pundits, like some on Fox News, belittled the protests as run by brain-addled youngsters and aging hippies with no real message. (Some on Fox News also expressed amazement at why any person would care about economic inequality.) But like so much of what spews from cable news carnival barkers, they were wrong.

    As Slate’s Dahlia Lithwick put it, many of the OWS protesters were exceedingly clear in their messaging. “They are holding up signs that are perfectly and intrinsically clear: They want accountability for the banks that took their money, they want to end corporate control of government. They want their jobs back. They would like to feed their children. They want – wait, no we want – to be heard by a media that has devoted four mind-numbing years to channeling and interpreting every word uttered by a member of the Palin family while ignoring the voices of everyone else.”

    In a Sept. 14 post on OccupyWallStreet, website the “common villain” is Wall Street, which “is robbing the 99% blind on behalf the 1%.”

    Likely a little hyperbole, but part of its message centers on the fact that for far too long, economic policy has been driven by lawmakers who cater to the superrich, ignoring a growing wealth gap and larger numbers of people falling into poverty.

    In So Rich, So Poor, Georgetown University law professor Peter Edelman explains how right-wing economic policy has created a wholly ineffectual social safety net.

  • September 10, 2012

    by Jeremy Leaming

    The effort to amend the Constitution to counter the ever-growing corporate influence on lawmakers and elections is a noble one, but there is a more useful and far-reaching way to correct the matter – make corporations more democratic. That’s law Professor Kent Greenfield’s take in a new article for Democracy.

    It’s an extensive piece that helps explain why the Supreme Court’s 2010 opinion in Citizens United v. FEC is quickly producing a corrosive effect on elections from coast to coast, but also why seeking a constitutional amendment is a wobbly strategy.

    Not long after the high court in Citizens United invalidated some major campaign finance regulation and found that corporations have nearly unfettered rights to funnel their expenditures into elections, an effort was launched to amend the Constitution.

    John Bonifaz and Jeffrey Clements co-founded Free Speech For People a group devoted to a constitution amendment overturning Citizens United.

    A recent debate with Bonifaz helped spur Greenfield to write the Democracy piece. Greenfield, who teaches business and constitutional law at Boston College, says that too many progressives have decided that constitutional law solution is needed to trump the Citizens United. Instead, Greenfield argues that it is corporations and how we understand them that need to change.

    “While the constitutional effort is defensive and palliative, a campaign to redesign the corporation itself would be affirmative and transformative,” Greenfield writes. “To cure Citizens United, we don’t have to amend the Constitution – we need to rethink corporations.”

    The nation’s laws governing corporations are weak and shareholders, despite widespread belief, do not have much to do with running corporations. (He notes for instance that shareholders are “not ‘owners’ in any meaningful way. If you own a share of General Motors, you will still be tossed out of its headquarters as a trespasser if you try to enter without an appointment.”) In Citizens United the Supreme Court majority, Greenfield notes, saw corporations as “associations of citizens,” but in reality America’s corporations are largely representative of the wealthy few, the 1 percent.