Friedrichs, Citizens United, and the "Free-Speech Gap"

If Citizens United “promised something like a level playing field” for corporate and union political spending, what might Friedrichs do to upset that supposed equilibrium? In case you missed it, Adam Liptak examined this question today in the New York Times.

Liptak notes at the outset of his article that the “level playing field” has proven to be largely illusory. He writes that last week’s oral argument in Friedrichs “illuminated a gap” in how the Court treats corporations and unions: “The court has long allowed workers to refuse to finance unions’ political activities. But shareholders have no comparable right to refuse to pay for corporate political speech.” And with the Court potentially on the verge of finding fair share fees unconstitutional, “the justices seem[] poised to widen that gap.”

Liptak boils the Court’s rationale for this distinction down to the difference between selling one’s shares and leaving one’s job: the former is easy, the latter is not. The Court, and specifically Justice Kennedy (author of the Citizens United opinion), has also seemed sympathetic to the idea that it is easier to influence the actions of a corporation — especially with the advent of “modern technology” that “makes [corporate] disclosures rapid and informative.”

To be sure, Justice Kennedy’s rosy view of corporate shareholder relations has been challenged by some, including the nineteen corporate law professors who filed an amici brief in Friedrichs. They noted that “[m]ost individual shareholders cannot obtain full information about corporate speech or political activities, even after the fact. Nor can they prevent their savings from being used to speak in ways with which they disagree.” Accordingly, if the Supreme Court uses Friedrichs “to grant additional First Amendment rights to union nonmembers, it will only further increase the extent to which they enjoy greater rights than do corporate shareholders.”

Liptak also quotes Professor Sachs and cites his article on the asymmetry of corporate shareholder and union member opt-out rights. There, Professor Sachs suggested (among other things) that Congress should require corporations to refund a pro rata share of political expenditures to objecting shareholders. Such a requirement seems to make all the more sense in light of the probable outcome in Friedrichs: “If we’re going to make this opt-out right for workers more and more muscular,” Professor Sachs told Liptak, “the question of symmetrical treatment of shareholders just becomes that much more important.”

Of course, there is one important distinction between corporate and public-sector union speech that Liptak rightly identifies: “The First Amendment is a limit on government power, and it does not directly affect private agreements, whether between companies and shareholders or between private employers and their workers.” Although Justice Kennedy seemed to suggest in last week’s oral argument that he might be willing to scrutinize private-sector agency shop laws under the First Amendment, as Professor Sachs wrote last week, “[f]inding state action in a labor law that permits private parties to bargain agency shop agreements would mark a dramatic departure from the Court’s state action doctrine, and seems exceedingly unlikely for this reason.”

Enjoy OnLabor’s fresh takes on the day’s labor news, right in your inbox.