Campaign Finance and the Supreme Court: The Disparate Treatment of Unions and Corporations

Published October 9th, 2013 -  - 10.09.132

In light of the Supreme Court’s return to campaign finance law, and the heightened public attention on the subject, I want to flag the deeply asymmetric ways the law treats union and corporate political participation.  One obvious problem comes in the disclosure rules.  As we’ve noted, “while campaign finance law requires neither unions nor corporations to disclose political spending, labor law imposes this requirement on unions . . . .  The end result: unions have to disclose; corporations do not.”

More broadly, and much more importantly, though, is this asymmetry: the law gives employees the right to opt out of funding union political speech, but shareholders get no right to opt out of funding corporate political speech.

I’ve written about this feature of campaign finance regulation, and shown why it is not justified, in an article titled Unions, Corporations, and Political Opt-Out Rights After Citizens United.  The abstract to that piece follows:

Citizens United upends much of campaign finance law, but it maintains at least one feature of that legal regime: the equal treatment of corporations and unions. Prior to Citizens United, that is, corporations and unions were equally constrained in their ability to spend general treasury funds on federal electoral politics. After the decision, campaign finance law leaves both equally unconstrained and free to use their general treasuries to finance political spending. But the symmetrical treatment that Citizens United leaves in place masks a less visible, but equally significant, way in which the law treats union and corporate political spending differently. Namely, federal law prohibits a union from spending its general treasury funds on politics if individual employees object to such use – employees, in short, enjoy a federally protected right to opt out of funding union political activity. In contrast, corporations are free to spend their general treasuries on politics even if individual shareholders object – shareholders enjoy no right to opt out of financing corporate political activity. This article assesses whether the asymmetric rule of political opt-out rights is justified. The article first offers an affirmative case for symmetry grounded in the principle that the power to control access to economic opportunities – whether employment or investment-based – should not be used to secure compliance with or support for the economic actor’s political agenda. It then addresses three arguments in favor of asymmetry. Given the relative weakness of these arguments, the article suggests that the current asymmetry in opt-out rules may be unjustified. The article concludes by pointing to constitutional questions raised by this asymmetry, and by arguing that lawmakers would be justified in correcting it.


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