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In 2016, a number of news outlets focused on Wal-Mart’s reputation crisis and outdated management style. Many, including union leaders, doubted the sincerity behind the company’s motivation in raising wages last year. I’ve blogged about Wal-Mart before, but today, there appears to be a different story to tell. Wal-Mart, the bogeyman of many NGOs and workers’ rights groups, actually believes that “serving the customers and society is the same thing… [and] putting the customer first means delivering for them in ways that protect and preserve the communities they live in and the world they will pass on to future generations.” This comes from the company’s 148-page 2016 Global Responsibility Report. Target’s report is a paltry 43 pages in comparison.

What accounts for the difference? Both use the Global Reporting Initiative framework, which aims to standardize sustainability reporting using materiality factors and items in the 10-K. Key GRI disclosures include: a CEO statement; key impacts, risks, and opportunities; markets; collective bargaining agreements; supply chain description; organizational changes; internal and external CSR standards (such as conflict mineral policy, LEED etc); membership associations; governance structure; high-level accountability for sustainability; consultation between stakeholders and the board; board composition; board knowledge of…

More than two years ago, I posted Shareholder Activists Can Add Value and Still Be Wrong, where I explained my view on shareholder proposals: 

I have no problem with shareholders seeking to impose their will on the board of the companies in which they hold stock.  I don’t see activist shareholder as an inherently bad thing.  I do, however, think  it’s bad when boards succumb to the whims of activist shareholders just to make the problem go away.  Boards are well served to review serious requests of all shareholders, but the board should be deciding how best to direct the company. It’s why we call them directors.    

Today, the Detroit Free Press reported that shareholders of automaker GM soundly defeated a proposal from billionaire investor David Einhorn that would have installed an alternate slate of board nominees and created two classes of stock.  (All the proposals are available here.) Shareholders who voted were against the proposals by more than 91%.  GM’s board, in materials signed by Mary Barra, Chairman & Chief Executive Officer and Theodore Solso, Independent Lead Director, launched an aggressive campaign to maintain the existing board (PDF here) and the split shares proposal (PDF here…

This past week, I traveled through parts of Tennessee and Georgia to attend a concert (Train with Natasha Bedingfield and O.A.R.–fantastic!) and visit the University of Georgia School of Law (to plan the 2018 National Business Law Scholars conference).  On that trip, I saw a number of billboards with religious messages–more than I remember having seen in the past.  This set me to reflecting on the use of billboards–typically commercial space–for this purpose.  I share a few observations today on that topic.

The messages on the billboards I saw appear to be important to the speakers who offer them.  [Note that in this paragraph I am working from memory but have tried to describe what I saw as accurately as possible.]  I saw several that were just printed with the word “JESUS” (in all capital letters, as I have written it here) and one that said: “TRUST JESUS” (again, in all caps, as written here) with a faded waving American flag in the background.  But the most striking billboard that I saw was one that stated: “In the beginning God created everything,” a message that was accompanied on the left by a circle in which the Darwinian progression to humankind was depicted and across which there was a large “X.”

On the one hand, highway billboards are a great vehicle for the exercise of free speech.  We are captive in our vehicles and generally bound to certain key routes when engaged in car travel over any significant distance.  Other than distinctive local flora and buildings (as well as traffic, exit, and other roadside driving guidance), billboards are the primary visual as one drives on a highway.  In fact, their size often makes them more attractive than those flowers, structures, and signage.  (Although I have never missed an exit for a billboard, I have come close.)

The use of billboards for religious messaging does not convert the message to commercial speech (to the extent that question may be relevant to any free speech analysis).  

One of the most striking lines in Provost Jeff Van Duzer’s talk at the Nashville Institute of Faith and Work a few months ago was his statement that “even bank robbers can tithe.”

See a somewhat similar version of that talk here.

Jeff Van Duzer’s point seemed to be that you cannot be a truly socially responsible company simply by giving some money to good causes. I think he was exactly right. He went on to explain that socially responsible businesses should focus on creating good products and good jobs. 

This week I was thinking about Jeff Van Duzer’s talk when I considered, for about the one hundredth time, how to define social enterprises.

Think about Ben & Jerry’s, a company that comes up at almost every social enterprise conference. While I can think of some good that ice cream does, I wonder if Ben & Jerry’s main products are, on the whole, socially beneficial. We have a serious, deadly obesity problem in the country, and Ben & Jerry’s products seem to be contributing to this problem. Perhaps Ben & Jerry’s ice cream is more healthy than most options or uses more natural ingredients (I am unsure if this is true), but are Ben…

Logo

Last Friday, The New York Times ran a story on possible performance enhancing drug use inside the Nike Oregon Project.

The Nike Oregon Project is coached by running legend Alberto Salazar, who, by all accounts, is both incredibly competitive and dedicated to his work.

Among the athletes who are or have been associated with the Nike Oregon Project (and coached by Salazar )are gold medalist (in the 5000 & 10,000m in 2012 and 2016) Sir Mo Farah, gold medalist (in the 2016 1500m) Matt Centrowitz Jr., and silver medalist (in the 10,000m in 2012 and in the marathon in 2016) Galen Rupp. These three athletes have been the most dominant male distance runners for the U.S. over the last two Olympic cycles. 

Allegations of doping is nothing new for the Nike Oregon project coach and athletes. For example, Kara Goucher, U.S. Olympian and former member of the Nike Oregon Project herself, has been extremely vocal with allegations against the group for years. The Times of London published some of the same allegations against the Nike Oregon Project a few months before The New York Times. FloTrack has released what it thinks is the full report from USADA…

Last weekend, retired NFL receiver Calvin Johnson made news when he revealed that he was not pleased with the Detroit Lions and how they handled his retirement. Johnson is apparently frustrated that the Lions required him to pay back about 10% of the  unearned $3.2 million remaining on his $16 million signing bonus from his 2012 contract. This is apparently a thing for the Lions, who sought all of the unearned signing bonus money remaining on Barry Sanders’ contract when he abruptly retired in 1999.

This is in contrast to Tony Romo’s retirement, in which the Dallas Cowboys released him, making the $5 million remaining on the signing bonus Romo’s.  Cowboys owner Jerry Jones said he was following the “Do Right Rule” when he allowed the team to release him.  The Seattle Seahawks made a similar decision with Marshawn Lynch.  

Some have argued that Johnson is being “pettier” than the Lions in this spat.  Mike Florio, a sports writer and graduate of WVU College of Law, where I teach, argued that “while Johnson has every right to be miffed at the Lions, Johnson also should be miffed at himself. Or at whoever advised him to retire instead of biding his time until…

Loyalty has been in the news lately.  The POTUS, according to some reports, asked former Federal Bureau of Investigation (“FBI”) Director James Comey to pledge his loyalty.  Assuming the basic veracity of those reports, was the POTUS referring to loyalty to the country or to him personally?  Perhaps both and perhaps, as Peter Beinart avers in The Atlantic, the POTUS and others fail to recognize a distinction between the two.  Yet, identifying the object of a duty can be important.

I have observed that the duty of government officials is not well understood in the public realm. Donna Nagy’s fine work on this issue in connection with the proposal of the Stop Trading on Congressional Knowledge (“STOCK”) Act, later adopted by Congress, outlines a number of ways in which Congressmen and Senators, among others, may owe fiduciary duties to others.  If you have not yet been introduced to this scholarship, I highly recommend it.  If we believe that government officials are entrusted with information, among other things, in their capacity as public servants, they owe duties to the government and its citizens to use that information in authorized ways for the benefit of that government and those citizens.  In fact, Professor Nagy’s congressional testimony as part of the hearings on the STOCK Act includes the following in this regard:

Given the Constitution’s repeated reference to public offices being “of trust,” and Members’ oath of office to “faithfully discharge” their duties, I would predict that a court would be highly likely to find that Representatives and Senators owe fiduciary-like duties of trust and confidence to a host of parties who may be regarded as the source of material nonpublic congressional knowledge. Such duties of trust and confidence may be owed to, among others:

  • the citizen-investors they serve;
  • the United States;
  • the general public;
  • Congress, as well as the Senate or the House;
  • other Members of Congress; and
  • federal officials outside of Congress who rely on a Member’s loyalty and integrity.

There is precious little in federal statutes, regulations, and case law on the nature–no less the object–of any fiduciary the Director of the FBI may have.  The authorizing statute and regulations provide little illumination.  Federal court opinions give us little more.  See, e.g., Banks v. Francis, No. 2:15-CV-1400, 2015 WL 9694627, at *3 (W.D. Pa. Dec. 18, 2015), report and recommendation adopted, No. CV 15-1400, 2016 WL 110020 (W.D. Pa. Jan. 11, 2016) (“Plaintiff does not identify any specific, mandatory duty that the federal officials — Defendants Hornak, Brennan, and the FBI Director— violated; he merely refers to an overly broad duty to uphold the U.S. Constitution and to see justice done.”).  Accordingly, any applicable fiduciary duty likely would arise out of agency or other common law.  Section 8.01 of the Restatement (Third) of Agency provides “An agent has a fiduciary duty to act loyally for the principal’s benefit in all matters connect with the agency relationship.”  

But who is the principal in any divined agency relationship involving the FBI Director?  

This past week was a big one for loyalty stories.  First, we have the New York Times reporting that President Trump asked former FBI director James Comey for his pledge of loyalty, to which Comey apparently promised “honesty.”  (The White House disputes this report.) 

Then, we have a high school quarterback in Illinois being forced to decommit from the University of Wisconsin’s, apparently because he tweeted that the University of Georgia had offered him a scholarship.  The student called Wisconsin Coach Budmayr, telling him he had the offer and said he was “still 100% committed to the Badgers.” The next day Budmayr apparently told him that he was no longer a good fit for Wisconsin and that he should keep looking.  The reason: lack of loyalty.  

Obviously, I only have the facts as they have been portrayed in these articles, and there are two sides to every story.  Nonetheless, these anecdotes got me to thinking about loyalty and how people tend to perceive the concept. 

To some, loyalty means fidelity.  This can be in the physical or emotional sense, as in the marriage context.  Some view extend it to ideological loyalty.  And to some, it means undying, uncompromising agreement and support.  It…

The Legal Skills Prof Blog has posted an article entitled Our Broken Bar Exam by Deborah Jones Merritt. The post discusses Merritt’s proposal for a task force on the bar exam. Merritt’s article states, among other things:

The bar exam is broken: it tests too much and too little. On the one hand, the exam forces applicants to memorize hundreds of black-letter rules that they will never use in practice. On the other hand, the exam licenses lawyers who don’t know how to interview a client, compose an engagement letter, or negotiate with an adversary.
 
This flawed exam puts clients at risk. It also subjects applicants to an expensive, stressful process that does little to improve their professional competence… The bar examination should test the ability of an applicant to identify legal issues in a statement of facts, such as may be encountered in the practice of law, to engage in a reasoned analysis of the issues, and to arrive at a logical solution by the application of fundamental legal principles, in a manner which demonstrates a thorough understanding of these principles… Why doesn’t our definition of minimum competence include cognitive skills that are essential for effective client…

Last week, a reporter interviewed me regarding conflict minerals.The reporter specifically asked whether I believed there would be more litigation on conflict minerals and whether the SEC’s lack of enforcement would cause companies to stop doing due diligence. I am not sure which, if any, of my remarks will appear in print so I am posting some of my comments below:

I expect that if conflict minerals legislation survives, it will take a different form. The SEC asked for comments at the end of January, and I’ve read most of the comment letters. Many, including Trillium Asset Management, focus on the need to stay the course with the Rule, citing some success in making many mines conflict free. Others oppose the rule because of the expense. However, it appears that the costs haven’t been as high as most people expected, and indeed many of the tech companies such as Apple and Intel have voiced support for the rule. It’s likely that they have already operationalized the due diligence. The SEC has limits on what it can do, so I expect Congress to take action, unless there is an executive order from President Trump, which people have been expecting since February. 
 
The Senate

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