Editorials

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

Benjamin Sachs

Benjamin Sachs is the Kestnbaum Professor of Labor and Industry at Harvard Law School and a leading expert in the field of labor law and labor relations. He is also faculty director of the Center for Labor and a Just Economy. Professor Sachs teaches courses in labor law, employment law, and law and social change, and his writing focuses on union organizing and unions in American politics. Prior to joining the Harvard faculty in 2008, Professor Sachs was the Joseph Goldstein Fellow at Yale Law School.  From 2002-2006, he served as Assistant General Counsel of the Service Employees International Union (SEIU) in Washington, D.C.  Professor Sachs graduated from Yale Law School in 1998, and served as a judicial law clerk to the Honorable Stephen Reinhardt of the United States Court of Appeals for the Ninth Circuit. His writing has appeared in the Harvard Law Review, the Yale Law Journal, the Columbia Law Review, the New York Times and elsewhere.  Professor Sachs received the Yale Law School teaching award in 2007 and in 2013 received the Sacks-Freund Award for Teaching Excellence at Harvard Law School.  He can be reached at [email protected].

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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