The Captive Employee Debate (Part 2)

Last week I blogged about the “captive employee” problem (here).  Paul Secunda has described the problem (here) as follows:

[A] lesser-known consequence of [Citizens United] 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.

Stephen Bainbridge took issue with some of my conclusions (here), and I would like to use this week’s post to respond to some of his comments.  Bainbridge first asks:

[H]ow is this different from a union telling its members how to vote? Or, for that matter, the UC system sending me emails about how the world will end if Prop 30 doesn't pass? The notion that a business can't tell its employees that elections have consequences strikes this observer as absurd, not to mention a gross infringement on First Amendment rights. Should the First Amendment really be interpreted as giving pornographers more rights than employers?

I believe it is fair to say that there is a meaningful difference between receiving an email informing the reader of the possible economic consequences of a particular referendum passing, and having one’s employer effectively say, “I will fire some of you if Obama is elected.”  The connection between messenger and executioner in the latter case provides, I believe, a valid basis for distinction.  Furthermore, I believe there is a meaningful difference between receiving an email and being forced to choose between sitting for hours listening to political propaganda or being fired.  In both cases, I believe the threat of termination emanating from one's employer implicates the integrity of our voting system in a way the examples Bainbridge cites are less likely to.  Obviously, there is an empirical question lurking here, but it seems reasonable to assume that threats of termination may coerce people to vote differently than they otherwise would.   This implicates a state interest sufficient to warrant at least some infringement on the employer’s free speech rights, if not a need to recognize an employee’s right not to listen to unwanted political speech.

Bainbridge next complains that:

[B]laming the corporate form is particularly inapt. If the issue is employer pressure on employees, that issue exists regardless of the legal structure of the employer. If you think employers shouldn't be telling employees how government regulation affects business, shouldn't you want to restrict employer speech regardless of whether the employer is structured as a corporation, partnership, or sole proprietorship? Indeed, if we really are living in the age of the uncorporation, as my late friend Larry Ribstein used to argue, growing numbers of employers will be unincorporated. Corporate personhood and Citizens United thus are nothing but red herrings in this debate.

Given that much of the captive audience debate revolves around the First Amendment, it is hard to see how Citizens United can be deemed nothing but a red herring.  I fully expect Citizens United to be one of the first opinions corporate employers cite when confronting state laws seeking to restrict their rights in this area.  Furthermore, corporations are different.  As President Nicholas Murray of Columbia University said in 1911: “I weigh my words when I say that in my judgment the limited liability corporation is the greatest single discovery of modern times . . . . Even steam and electricity are far less important than the limited liability corporation, and they would be reduced to comparative impotence without it.”   My particular focus here is that employers should not be able leverage the unique economic power of the corporate form to attempt to coerce employee’s to vote a certain way.  As I mentioned in my original post: “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.”  Furthermore, I believe the justifications for this position likely extend to all limited liability entities.  Thus, while I agree with what I believe to be part of Larry Ribstein’s claim regarding the value of a shift to the uncorporation—that is, more skin in the game for managers--I highly doubt a growing numbers of employers will be giving up the state-granted benefit of limited liability any time soon.

Finally, Bainbridge wonders:

[E]ven if you think that incorporation is a privilege, wouldn't restrictions on the speech of senior management be an unconstitutional condition?

I am still in the early stages of getting my head around the unconstitutional conditions doctrine, so I am certainly open to being further educated on this point.  However, what I have learned about the doctrine to this point suggests that it is not nearly as effective a trump card as defenders of corporate political speech think.  I believe one can understand the unconstitutional conditions doctrine (which effectively prohibits the government from impairing constitutional rights indirectly by conditioning the receipt of certain government benefits on a waiver of those rights) as standing in opposition to the greater power doctrine (which provides that the greater power to deny a benefit necessarily includes the lesser power to condition the benefit).  In trying to resolve the seemingly insurmountable tension between these two doctrines, one may be able to look to the concept of germaness, which posits that a condition may be imposed if it is germane to the purpose of granting the benefit.  If this analysis is correct, then I would personally welcome an unconstitutional conditions challenge because one of the primary goals of my scholarship these past few years has been to get people to talk more about the purpose of granting corporate status in deciding First Amendment cases involving corporations.  (For an example, go here.)  At the very least, there seem to be some very legitimate arguments that can be made to tie the regulation of a corporation’s ability to use corporate assets to influence elections to the purposes underlying the grant of corporate status in the first place.  (Please send comments on this point directly to me at, because I sometimes miss the comments that are entered below the posts.)

Stefan Padfield