Taking Opt-In Rights Seriously: What Knox v. SEIU Could Mean for Post-Citizens United Shareholder Rights
Stetson University - College of Law
February 27, 2013
74 Montana Law Review 101 (2013)
This article will explore the implications of the Supreme Court’s disparate treatment of similarly-situated, politically active corporations and unions. Two paths lead to more equitable treatment of these two groups: either (1) corporate political speech should be regulated more or (2) union political speech should be regulated less. This piece argues in favor of the former. In particular, corporate political spending lacks the transparency and consent mechanisms present in union political spending. Policymakers should address both of these failings in the corporate context.
The Roberts Supreme Court’s asymmetrical treatment of corporations and unions was on full display in the 2011–2012 term. American Tradition Partnership, Inc. v. Bullock coupled with Knox v. Service Employees International Union, Local 1000 demonstrates that a double standard persists between corporations, who are now privileged speakers in the Court’s eyes, and unions, who are currently disfavored speakers. The Supreme Court imposes different degrees of consent from corporations’ and unions’ constituent parts before they electioneer. Under U.S. law, corporations are not required to get consent from their shareholders before the corporate entity speaks politically using corporate funds. By contrast, public-sector unions must receive nonmembers’ consent before political spending in certain circumstances.
With the Supreme Court unlikely to change legal positions on this issue until the Court’s composition itself changes, the responsibility to foster more equitable regulations for corporations is left to the American electorate, Congress, the States, and executive agencies, such as the Securities and Exchange Commission (“SEC”), which must work within the boundaries of current precedent. The Supreme Court’s ruling in Knox requiring opt-ins for union political expenditures provides an additional basis for arguing that publicly traded American corporations should likewise marshal shareholder consent before corporate political expenditures are made.
Number of Pages in PDF File: 38
Keywords: Citizens United, Knox v. SEIU, American Tradition Partnership, campaign finance, money in politics, consent, shareholder, corporate governance, union dues, compelled speech, transparency, disclosure, SEC, nonmembers, dissenting members, dissenting shareholders, shareholder vote, objecting members
JEL Classification: G30, G38, G39Accepted Paper Series
Date posted: February 28, 2013 ; Last revised: February 21, 2014
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