Is this what states created corporations for?

You may have heard the stories making the rounds this week about employers pressuring their employees to vote for particular candidates.  Much of this activity apparently traces back to Mitt Romney expressly encouraging business owners to do this.  As reported (here):

The candidate himself suggested that business owners adopt this practice during a virtual town hall meeting with the National Federation of Independent Businesses back in June.  “I hope you make it very clear to your employees what you believe is in the best interest of your enterprise and therefore their job and their future in the upcoming elections," he said, telling the audience, "Nothing illegal about you talking to your employees about what you believe is best for the business, because I believe that will figure into their election decision, their voting decision."

Personally, I think a number of the reported tactics rise to the level of an abuse of power.  At least to the extent these are corporate employers, my rationale is:

1.  The leverage used on these employees is at least partly attributable to the corporate form.  That is to say, without the capital accumulation benefits of corporate status, the owners of these businesses would likely not have nearly as much power to exert over this captive audience of employees.

2.  These business owners were not granted the right to operate in the corporate form so they could pressure employees to vote for particular candidates.  Rather, they were granted the right to operate in the corporate form because of legislative judgments that making incorporation widely available would benefit society as a whole.  (If you believe that it is possible to create a corporation solely via private contracting, then this point will be unconvincing to you.  However, please let me know if you ever actually manage to pull off that feat.)

3.  Given this public aspect of corporate status, it is improper to divert the power of this corporate form to force the business owner’s personal political views on employees.

However, as Paul Secunda explains (here), as a result of Citizens United such abuses of power are now legal.

Citizens United has wrought widespread changes in the election law landscape. Yet, a lesser-known consequence of this watershed case might have a significant impact in the workplace: it may permit employers to hold political captive audience workplace meetings with their employees. Under Citizens United’s robust conception of corporate political speech, employers may now be able to compel their employees to listen to their political views at such meetings on pain of termination….

Prior to Citizens United, the 1971 Federal Election Campaign Act (FECA), as amended in 1976, provided that corporations were permitted unlimited communication with and solicitation of shareholders and executive and administrative personnel (the corporation’s “restricted class”). Rank-and-file employees, on the other hand, could be solicited for corporate Political Action Committees (PACs) only twice a year (originally pegged to primary and general election seasons), only by mail sent to their home addresses, and only through an accounting system that made it impossible for management to know which employees did or did not contribute. Partisan political communication to rank-and-file employees, moreover, was completely prohibited.

Now, post-Citizens United, express advocacy outside a corporation’s restricted class is no longer restricted….

Although federal law does still prevent employers from issuing explicit or implicit threats against employees who vote for the “wrong” candidate, short of that, nothing prohibits employers from requiring employees to participate in one-sided political propaganda events.

Stefan Padfield