If you are a business law professor (or reasonable facsimile thereof) and would like to guest-blog with us here at the Business Law Prof Blog, please drop me a line at spadfie@uakron.edu.
Gedicks & Van Tassell on “RFRA Exemptions from the Contraception Mandate: An Unconstitutional Accommodation of Religion”
Frederick Mark Gedicks & Rebecca G. Van Tassell recently posted “RFRA Exemptions from the Contraception Mandate: An Unconstitutional Accommodation of Religion” on SSRN (HT: Robert Esposito). Here is excerpt of the abstract:
Litigation surrounding use of the Religious Freedom Restoration Act to exempt employers from the Affordable Care Act’s “contraception mandate” is moving steadily towards resolution in the U.S. Supreme Court. Both opponents and supporters of the mandate, however, have overlooked the Establishment Clause limits on such exemptions.
The heated religious-liberty rhetoric aimed at the mandate has obscured that RFRA is a “permissive” rather than “mandatory” accommodation of religion — a government concession to religious belief and practice that is not required by the Free Exercise Clause. Permissive accommodations must satisfy Establishment Clause constraints, notably the requirement that the accommodation not impose material burdens on third parties who do not believe or participate in the accommodated practice.
While it is likely that RFRA facially complies with the Establishment Clause, it violates the Clause’s limits on permissive accommodation as applied to the mandate. RFRA exemptions from the mandate would deny the employees of an exempted employer their ACA entitlement to contraceptives without cost-sharing, forcing employees to purchase
“To be, or not to be,” is an important question, but so is, “What to be?”
A lot of chatter this week surrounding the submission of an amicus brief filed in the Hobby Lobby case by corporate and criminal law professors in support of petitioners. In particular, Stephen Bainbridge has written a series of posts critical of the brief:
- Help me rebut the corporate law professors brief in the Hobby Lobby and Conestoga Wood mandate cases
I was one of the 44 law professors that signed on to the amicus brief, and I also have a tremendous amount of respect for Prof. Bainbridge, so I’ve been very interested in what he’s had to say. However, I’m also currently trying to advance my latest writing project (relatedly, on the intersection of corporate governance theories, theories of corporate personality, and corporate social responsibility) to some semblance of completeness that I can submit to journals with a straight face in the next few weeks. Thus, I am going to pass on addressing Bainbridge’s critiques for now – except for briefly responding to his claim that there is some inconsistency between
Bullard on the SEC’s Crowdfunding Proposal: Will it Work for Small Businesses?
Go here for the January 16, 2014 testimony of Mercer E. Bullard before the Committee on Small Business, United States House of Representatives, on the SEC’s Crowdfunding Proposal. Here is a brief excerpt (comment deadline is February 3):
The overriding issue for crowdfunding is likely to be how the narrative of investors frequently losing their entire investment plays out. If investors are perceived as losing only a small part of their portfolios because of business failures rather than fraud, or if their crowdfunding losses are set off by gains in other investments through diversification, the crowdfunding market could weather large losses and thrive. However, if fraudsters are easily able to scam investors under the cover of a crowdfunding offering, or stale financial statements routinely turn out to have hidden more recent, undisclosed financial declines, or there are investors who can’t afford the losses they incur, resulting in stories of personal financial distress – then crowdfunding markets will never become a credible tool for raising capital.
Pearce & Hopkins on “Regulation of L3Cs for Social Entrepreneurship: A Prerequisite to Increased Utilization”
John A. Pearce II & Jamie Patrick Hopkins have posted “Regulation of L3Cs for Social Entrepreneurship: A Prerequisite to Increased Utilization” on SSRN. Here is the abstract:
One new business model is the low-profit, limited liability company (L3C). The L3C was first introduced in Vermont in 2008 and has since been adopted by several other states. The L3C is designed to serve the for-profit and nonprofit needs of social enterprise within one organization. As such, it has been referred to as a “[f]or-profit with [a] nonprofit soul.”
In an effort to efficiently introduce the L3C business model, states have designed L3C laws under existing LLC regulations. The flexibility provided by LLC laws allows an L3C to claim a primary social mission and avail itself of unique financing tools such as tranche investing. Specifically, the L3C statutes are devised to attract the program related investments (PRIs) of charitable foundations. Despite these successes, adoption of the L3C form has been slower than proponents expected.
A similar business initiative has found great success in the United Kingdom (U.K.), where numerous proponents supported legislation designed to create hybrid business models that would promote social entrepreneurship. As a result, the U.K. created
Can lawyers ever be happy?
Even before I read the book The Happy Lawyer by my former colleagues Nancy Levit and Doug Linder, I loved every legal job I ever had from judicial law clerk to BigLaw associate (twice), to deputy general counsel. I am still a happy lawyer after twenty-two years in the profession. I am clearly an anomaly among my attorney friends, most of whom looked at me with envy when I said that I was leaving practice to pursue academia. One friend, a partner in a South Florida firm quipped, “litigation has to be one of the only professions where your client hates you, your opposing counsel hates you, and the judge probably thinks you’re an idiot. When the outcome is positive, the client loves you until they see the bill.” No wonder lawyers aren’t happy.
But the situation for lawyers is more serious than a few clients grumbling about high bills. Earlier this week CNN reported that lawyers are the 4th most unhappy professionals behind dentists, pharmacists, and physicians, and are 3.6 times more likely to suffer from depression than non-lawyers. According to the article, 40% of law students report that they have suffered from depression before graduation. That acknowledgement
Living in a Material World- From Naming and Shaming to Knowing and Showing: Will New Disclosure Regimes Finally Drive Corporate Accountability for Human Rights?
In my posts last Thursday (see here and here) and in others, I have explained why I don’t think that the Dodd-Frank conflicts minerals law is the right way to force business to think more carefully about their human rights impacts. I have also blogged about the non-binding UN Guiding Principles on Business and Human Rights, which have influenced both the Dodd-Frank rule, the EU’s similar proposal, and the State Department’s required disclosures for businesses investing in Burma (see here).
For the past few months, I have been working on an article outlining one potential solution. But I was dismayed, but not surprised to read last week that the US government’s procurement processes may be contributing to the very problems that it seeks to prevent in Bangladesh and other countries with poor human rights records. This adds a wrinkle to my proposal, but my contribution to the debate is below:
Faced with less than optimal voluntary initiatives and in the absence of binding legislation, what mechanisms can interested stakeholders use as leverage to force corporations to take a more proactive role in safeguarding human rights, particularly due diligence issues in the supply chain? Can new disclosure
Aaron Rodgers, Intel and the “Scarlet Letter” of Dodd-Frank- Part 2
On Tuesday, I attended the oral argument for the National Association of Manufacturers v. SEC—the Dodd-Frank conflict minerals case. Trying to predict what a court will do based on body language and the tone of questioning at oral argument, especially in writing, is foolish and crazy, but I will do so anyway.
I am cautiously optimistic that the appellate court will send the conflict mineral rule back to the SEC to retool based on the three arguments generated the most discussion. First, the judges appeared divided on whether the SEC had abused its discretion by changing the statutory language requiring issuers to report if minerals “did” originate from the DRC or surrounding companies rather than the current SEC language of “may have” originated. This language would sweep in products in which there is a mere possibility rather than a probability of originating in covered countries. One judge grilled the SEC like I grill my law students about the actual statutory language and legislative intent, while another appeared satisfied with SEC’s explanation that issuers did not have to file if the lack of certainty was due to a small number of responses from suppliers or for lack of information. My prediction-
Aaron Rodgers, Intel and the “Scarlet Letter” of Dodd-Frank- Part I
This has been a good week for those who care about the human rights crisis in the Democratic Republic of the Congo. Green Bay Packers quarterback Aaron Rodgers joined actress Robin Wright as the latest in a string of celebrities raising awareness about “conflict minerals”, the tin, tantalum and gold that appear in cell phones, computers, automobiles, baby diapers and toothpaste. Speaking at the Consumer Electronics Show in Las Vegas on Monday, the CEO of Intel got as much press for his declaration that his products will be “conflict-free” in 2014 as he did for his discussion about new innovations.
The “conflict minerals” at issue are the subject of a complex regulation in Dodd-Frank that requires certain US issuers, regardless of size to conduct extensive due diligence and disclose whether or not their products are “DRC-Conflict free” so that consumers and investors can make informed decisions about whether the products may be supporting rebels involved in rape, torture and child slavery. The purpose of the law, which the SEC will regulate and enforce, is to bring peace, security and stability to the Democratic Republic of Congo. By drying up funding for the rebels, the theory goes, sexual and gender-based violence
Can loyalty-driven securities solve the problem of short-termism? Probably not, according to a study.
The Generation Foundation (the “Foundation”), which focuses on sustainable capitalism, commissioned Mercer and Canadian law firm Stikeman Elliott LLP to study ways to foster more long-term thinking in the capital markets. In a prior report the Foundation proposed five actions to counteract the effects of short-termism including: (1) identifying and incorporating risks from stranded assets; (2) mandating integrated reporting; (3) ending the default practice of issuing quarterly earnings guidance; (4) aligning compensation structures with long-term sustainable performance; and (5) encouraging long-term investing with loyalty-driven securities.
Loyalty-driven securities provide differentiated rights or rewards to shareholders based on their tenure of shareholding. These rewards could include extra dividends, warrants or additional voting rights for owners who held shares for three years (or some other time period), limiting proxy access to shareholders of a specified minimum duration, or inferior voting rights for short-term shareholders. The idea is not far-fetched. Apparently, the European Commission is considering proposals to reward certain shareholders with additional voting rights.
In a report issued in December 2013 the Foundation, Mercer and the law firm outline the results of their legal review of almost a dozen countries and the interviews of over 120 experts. Interviewees included academics, pension funds, investors