Archive for the ‘law’ Category
Corporations, Persons, and Human Dignity
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The U.S. Supreme Court is once again diving into the waters of corporate personhood.
See this story, by Adam Liptak, for the NYT: Supreme Court Takes Cases on Rights of Corporations.
The Supreme Court added 14 cases to its docket on Tuesday, including three concerning the rights of corporations in unusual settings….
The story notes that two of the cases have to do with the use of the ‘state secrete privilege’ — the legal mechanism that allows the government not to submit evidence that would jeopardize national security. Both are cases to which both a corporation and the federal government are parties, and there is question about whether the state secret privilege can be used in ways that either hurt, or benefit, the corporation.
The other case is about privacy:
The privacy case, Federal Communications Commission v. AT&T Inc., No. 09-1279, will consider whether a provision of the Freedom of Information Act concerning “personal privacy” applies to corporations.
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AT&T seeks to block the release of documents it provided to the F.C.C., which conducted an investigation into claims of overcharges by the company in a program to provide equipment and services to schools. The documents were sought under the freedom of information law by a trade association representing some of AT&T’s competitors.AT&T relied on an exemption to the law for law enforcement records that could “constitute an unwarranted invasion of personal privacy.”
Personal privacy?
Yes, you read that right. In a previous ruling:
The United States Court of Appeals for the Third Circuit, in Philadelphia, ruled for the company, relying in part on a definition of “person” in the law that included corporations.
“Corporations, like human beings, face public embarrassment, harassment and stigma” because of their involvement in law enforcement investigations, Judge Michael A. Chagares wrote for a unanimous three-judge panel.
I’ve blogged before about why it is (sometimes) essential to think of corporations as persons, at least for legal purposes. But (as I’ve also argued) personhood is a complex notion, and deciding to think about corporations as persons doesn’t immediately imply attributing to them every characteristic of human persons.
Now, I don’t know precisely what Judge Chagares (quoted above) meant when he refers to the possibility of corporations facing “embarrassment, harassment and stigma.” But what he ought to have meant, I think, is that corporations (created by humans for human purposes) can suffer attacks on their reputation that can have a serious negative impact on the legitimate interests of their human creators. Roughly: if you (let’s say) unfairly impugn the behaviour or intentions of a corporation (or a non-profit for that matter) you wrongly harm the interests of the people who rely on it. What Judge Chagares needn’t have meant is that corporations possess the kind of dignity, or intrinsic worth, that we attribute to human persons, and that is the basis not just of the instrumental rights of legal personhood, but of human rights.
Forbes.com’s New White Collar Crime Blog, by Walt Pavlo
Here’s a new blog worth checking out. Walt Pavlo is now blogging for Forbes.com, a blog called simply White Collar Crime.
Walt is a special sort of expert on white collar crime: he was for a couple of years better known as “Inmate Number 52071-019” in the U.S. penal system. You see, Walt did time in a federal penitentiary for his part in the multi-million-dollar MCI-Worldcom fraud. So when he writes about white-collar crime — what motivates it, what allows it, and what its punishment looks like — he writes from experience.
I first blogged about Walt Pavlo in August of 2006, soon after meeting him in person (we were both speakers at the same event for MBA students at the University of Tulsa). Then, a couple of months later, I interviewed Walt to get his unique perspective on the 24-year sentence that had just been handed down to Enron’s Jeff Skilling.
Now, not everyone wants to hear what an ex-convict has to say. Fair enough. (As Walt himself wrote in his first blog entry, Not Every Felon Is Worth Hearing From.) For my part, I’ve already blogged on why I think convicted white-collar criminals are worth listening to. So for now, all I’ll say is that in my experience, Pavlo is a thoughtful and insightful guy. I’ll be reading his blog.
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Addendum:
Here’s a link to Pavlo’s book about his own role in the MCI fraud, Stolen Without a Gun.
Corporations & the Right to Sue for Libel
Back in February, just after the US Supreme Court issued its Citizens United decision that essentially asserted that corporations have a right to mostly-free speech in the political realm, there was a lot of speculation about what other rights would be asserted next on behalf of corporations.
In that regard, here’s an interesting story from the UK about the legal right of corporations to sue for libel. Writing in The Guardian, lawyer David Allen Green asks, Why should companies be allowed to sue for libel? The whole piece is very much worth reading, but here’s Green’s conclusion:
Given the range of other legal means open to companies to protect their commercial reputations, I think the right of companies to sue for libel should be severely limited, if not abolished altogether. The public interest requires nothing less.
Green suggests that those who assert the cogency of such a right likely do so on the basis of the idea that corporations are, after all, persons:
But to the conventionally minded English lawyer there is no question that companies should be able to sue for libel. After all, companies are “legal persons” – and in English law, personality goes a very long way. The view is that if “natural persons” can sue for libel then so can companies.
But it doesn’t seem to me at all obvious that personhood is the foundational notion, at least not ethically. What about something simpler, like the idea that the corporation is a valued instrument (of its owners, members, shareholders, whatever). If you libel a company (by publishing something false that damages its reputation) you do economic damage to its shareholders. But rather than having each shareholder launch a lawsuit against whomever wrote or broadcast the libelous words, it makes more sense to let the company itself sue.
Now, Green argues that companies have other effective mechanisms at their disposal, beyond libel law. And that may well be. My only point here is to argue that we don’t absolutely need to begin with the notion that a corporation is a person, in order to attribute to it certain legal rights. All we need to do is recognize that protection of the corporation is important to protecting the interests of those flesh-and-blood persons whose economic interests depend upon it.
(p.s., in the wake of Citizens United, I did a trio of blog entries on the topic. See my 1st, 2nd, and 3rd entries. A few months earlier, I had written about Why Corporations Must Be Legal Persons.)
Business Ethics & Compliance 3: FCPA, Ethics Training, Social Media
I’m just back from New York, where I attended the Conference Board’s Business Ethics and Compliance Conference, as a guest of the organizers.
This is the third of 3 blog entries about the event.
This morning I saw two presentations. The first was by Matthew Tanzer, VP and Chief Compliance Counsel at Tyco. Tanzer’s talk was nominally about “Communicating and Managing FCPA Risk.” (The FCPA, or Foreign Corrupt Practices Act, is what makes it a crime under U.S. law for an American company to engage in bribery overseas, regardless of whether there are laws against bribery in the country in which the bribery takes place.) But more generally Tanzer’s talk was about the very sophisticated program Tyco has in place to train its roughly 110,000 employees on ethics & compliance. Tyco’s program includes a “Vital Values” newsletter, online training modules, and having 100% of its employes — many of them in far-flung branch offices in something like 60 countries — sign the company’s Code of Conduct every year. My initial critical thought about the latter: how much value is there in having people merely sign a Code of Conduct. Signing doesn’t reliably indicate understanding. But Tanzer’s justification was a good one: the ordeal involved in achieving a 100% signature rate signals commitment. In his words, “It says to employees that we’re serious about this.” Add to that the fact that something like 50,000 employees go through online training every year, and you start to see that Tyco does take this stuff seriously. (Oh, and on the topic of the relationship between ethics & legal compliance, Tanzer’s advice to the audience, most of whom have legal training: Not everyone in your organization is a lawyer, so don’t focus on law. Focus on ethics.)
The other presentation I saw this morning was by Douglas Smith, a lawyer with McGuireWoods LLP, on the impact of social networks and new communications technologies. Smith opened some eyes in the audience, I think, with regard to various ways in which employee use of social media can result in risks for their employers. But he also had words of caution for companies tempted to peek at employees’ (or prospective employees’) use of social media. Even when doing so doesn’t constitute actual invasion of privacy, it can, for example, result in employers seeing personal information that they are not legally allowed to use (under, e.g., Title 7 of the US Civil Rights Act).
(One point of criticism if Smith’s talk: given that it was a talk about new communications technologies at a conference on ethics & compliance, I would have liked to hear his thoughts on the positive ways in which companies are using blogs and Twitter to communicate with customers, critics, and other stakeholders.)
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p.s. here are direct links to my last 2 blog entries from the conference:
Business Ethics & Compliance and Business Ethics & Compliance 2.
The Business Ethics Blog 