Corporate Personality

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On Saturday evening, I returned from the 2018 Southeastern Association of Law Schools (SEALS) annual conference (program here).  My week-long tour of duty as a conference registrant spanned three different areas of engagement: (1) volunteerism in the portion of the conference dedicated to helping prepare prospective law faculty for the law school appointments process; (2) attendance at programs of interest on substantive law, law schools, and law teaching; and (3) participation (through presentation and commentary) in business law discussion groups.  Although I was exhausted by the time I left (especially because I also attended portions of two meetings of the SEALS Board of Trustees), I also was rewarded by each of the three types of involvement in the conference.

The prospective law teachers component of the conference offers the opportunity for a select group of future teacher-scholars to present a sample job talk, receive comments on their draft CVs, and engage in mock interviews.  This year, I participated as a mentor in all three components.  Some folks needed more support with pieces of the process than others, as you might imagine.  But all were amply qualified and deserving of appointments.  Several sent me nice “thank you” messages.  I hope…

The Southeastern Association of Law Schools (SEALS) Annual Meeting is upon us. If you are free from 9-11 AM this coming Saturday, Aug. 11, please stop by our discussion group on The Role of Corporate Personhood in Masterpiece Cakeshop. Don’t worry about the fact that SCOTUS ignored the personhood issue — we’ll have plenty to talk about.

Here is a summary of the program:

In the United States Supreme Court case of Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission, the issue presented is: “Whether applying Colorado’s public accommodations law to compel the petitioner to create expression that violates his sincerely held religious beliefs about marriage violates the free speech or free exercise clauses of the First Amendment.” A group of corporate law professors has filed an amicus brief in support of the CCRC. One of the arguments in that brief is: “Because Of The Separate Legal Personality Of Corporations And Shareholders, The Constitutional Interests Of Shareholders Should Not Be Projected Onto The Corporation.” This discussion group features a dialogue on the pros and cons of this argument, together with related analysis and observations.

I’ll be moderating, and here is a list of dicussants:

Professor Eric Chaffee, University…

Music star/clothing designer Kanye West stirred up controversy on Wednesday when he began tweeting about his support of Donald Trump, calling him his “brother,” discussing their shared “dragon energy,” and showing off his  MAGA hat, autographed by President Trump himself. The President thanked West for the support, and some level of outrage ensued among liberal pundits and many in the black community about West’s actions. A number of marketing experts opined that West’s vocal support had the potential to adversely affect sales of his Yeezy line of clothing and sneakers, which had already suffered a decline of late, even though earlier releases of his product sold out in minutes online. In the past, Yeezy sneakers’ assoication with Adidas helped that company double its stock price.

As fans threatened to get rid of their Yeezy gear, news outlets wondered if West had killed his brand. But a funny thing happened. GQ Magazine reported today that Yeezy sales are actually up and West has even more Twitter followers than ever. The article described the backlash and boycott threats that other sneaker companies faced after their executives supported President Trump. Even Kim Kardashian, West’s wife and marketing, urged him to cease his…

Within the next few weeks, the Supreme Court will decide a trio of cases about class action waivers, which I wrote about here. The Court will decide whether these waivers in mandatory arbitration agreements violate the National Labor Relations Act (which also applies in the nonunion context) or are permissible under the Federal Arbitration Act. 

I wonder if the Supreme Court clerks helping to draft the Court’s opinion(s) are reading today’s report by the Economic Policy Institute about the growing use of mandatory arbitration. The author of the report reviewed survey responses from 627 private sector employers with 50 employees or more. The report explained that over fifty-six percent of private sector, nonunion employees or sixty million Americans must go to arbitration to address their workplace rights. Sixty-five percent of employers with more than one thousand employees use arbitration provisions. One-third of employers that require mandatory arbitration include the kind of class action waivers that the Court is looking at now. Significantly, women, low-wage workers, and African-Americans are more likely to work for employers that require arbitration. Businesses in Texas, North Carolina, and California (a pro-worker state) are especially fond of the provisions. In most of the highly populated states, over forty…

Within the past 24 hours, I’ve seen at least three news article that led me to reflect on my past blog posts. Rather than write a full post on each article, I’ve decided to note some observations.

The Tweet That Launched A Boycott (And Maybe a Buycott)

I’ve been skeptical in the past about whether boycotts work.  Perhaps times are changing. This week, Parkland shooting survivor David Hogg tweeted that advertisers on Laura Ingraham’s cable show should pull out after she tweeted,  “David Hogg Rejected By Four Colleges To Which He Applied and whines about it. (Dinged by UCLA with a 4.1 GPA…totally predictable given acceptance rates.) https://www.dailywire.com/news/28770/gun-rights-provocateur-david-hogg-rejected-four-joseph-curl …”  On March 28th, the 17-year old activist responded with “Soooo what are your biggest advertisers … Asking for a friend. .” He then provided a list of her top twelve sponsors.

As of 8:00 p.m. tonight, the following companies dumped the Fox show, eleven after the talk show host had apologized, stating “On reflection, in the spirit of Holy Week, I apologize for any upset or hurt my tweet caused him or any of the brave victims of Parkland… For the record, I believe my…

Friend and colleague Jena Martin has posted her new paper, Easing “the Burden of the Brutalized”: Applying Bystander Intervention Training to Corporate Conduct.  And when I say new, I mean new.  It went on SSRN within the last hour.  

Prof. Martin is an expert in business and human rights, and her new paper offers a new framework for corporations that are seeking to reduce or eliminate human rights violations.  Her paper is designed to help corporation beyond due diligence and reporting to allow them to “engage with either the oppressor or the oppressed in a way that directly minimizes human rights abuses.”  It is a timely piece with some interesting and innovative suggestions.  I look forward to seeing where the final version ends up. 

Abstract

The last few years have borne witness to a shift regarding how to address issues of oppression and social injustice. Across many different advocacy points – from police brutality to sexual violence – there seems to be a consensus that simply engaging the oppressor or the victim is not enough to affect real social change. The consensus itself is not new: it has been at the heart of many social justice movements over

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I live in South Florida and have friends who live in Parkland, Florida, the site of the most recent school shooting. Like many, I’ve found solace and inspiration in the young survivors and their families who have taken to the streets and visited Washington, D.C. to demand action to prevent the next tragedy. Who knows whether they will succeed where others have failed. I certainly hope so.

I’m more surprised though, with the reactions of major companies such as WalMart, Dicks, REI, United Airlines, Hertz, Symantec and others that have cut ties with the National Rifle Association or have changed their sales practices. Skeptics have observed that corporations take “controversial” stances only when it’s cheap or easy and that this stance against the NRA isn’t even that controversial. But, it certainly hasn’t been “cheap” for Delta Airlines. Notwithstanding the fact that the airline employs 33,000 people in the state, Georgia has passed a bill to eliminate a proposed $50 million tax break because Delta announced plans to end its discount for NRA members. 

The gun control issue is the latest in a string of public policy debates that have divided corporations over the past year. CEOs have taken positions on…

I love the Kardashians. I don’t watch the reality show, but I do keep up with them because I use them in hypotheticals in class and in exams for entity selection questions. The students roll their eyes, but invariably most of them admit to knowing everything about them. When the students can relate to the topic, it makes my job easier. That’s why I used the SNAP IPO last year as our case study on basic securities law. Every year I pick a “hot” offering to go through some of the key principles and documents, and Snap was the logical choice because the vast majority of the students love(d) the Snapchat app. The company explained as its first risk factor “… the majority of our users are 18-34 years old. This demographic may be less brand loyal and more likely to follow trends than other demographics. These factors may lead users to switch to another product, which would negatively affect our user retention, growth, and engagement.” I used myself as an example to explain that risk factor in class. I have over 100 apps on my smartphone, and I have a son in the target demographic, but I  never open…

This may be obsolete by the time you read this post, but here are my thoughts on Corporate Governance, Compliance, Social Responsibility, and Enterprise Risk Management in the Trump/Pence Era. Thank you, Joan Heminway and the wonderful law review editors of Transactions: The Tennessee Journal of Business Law. The abstract is below:

With Republicans controlling Congress, a Republican CEO as President, a “czar” appointed to oversee deregulation, and billionaires leading key Cabinet posts, corporate America had reason for optimism following President Trump’s unexpected election in 2016. However, the first year of the Trump Administration has not yielded the kinds of results that many business people had originally anticipated. This Essay will thus outline how general counsel, boards, compliance officers, and institutional investors should think about risk during this increasingly volatile administration. 

Specifically, I will discuss key corporate governance, compliance, and social responsibility issues facing U.S. public companies, although some of the remarks will also apply to the smaller companies that serve as their vendors, suppliers, and customers. In Part I, I will discuss the importance of enterprise risk management and some of the prevailing standards that govern it. In Part II, I will focus on the changing role…

I suspect click-bait headline tactics don’t work for business law topics, but I guess now we will see. This post is really just to announce that I have a new paper out in Transactions: The Tennessee Journal of Business Law related to our First Annual (I hope) Business Law Prof Blog Conference co-blogger Joan Heminway discussed here. The paper, The End of Responsible Growth and Governance?: The Risks Posed by Social Enterprise Enabling Statutes and the Demise of Director Primacy, is now available here.

To be clear, my argument is not that I don’t like social enterprise. My argument is that as well-intentioned as social enterprise entity types are, they are not likely to facilitate social enterprise, and they may actually get in the way of social-enterprise goals.  I have been blogging about this specifically since at least 2014 (and more generally before that), and last year I made this very argument on a much smaller scale.  Anyway, I hope you’ll forgive the self-promotion and give the paper a look.  Here’s the abstract: 

Social benefit entities, such as benefit corporations and low-profit limited liability companies (or L3Cs) were designed to support and encourage socially responsible business. Unfortunately, instead

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