Published in Law360 on October 11, 2018
An internationally renowned scholar of constitutional law and corporate governance, Kent Greenfield is a professor of law at Boston College Law School. He was the founder and president of the Forum for Academic and Institutional Rights and co-authored an amicus brief in Masterpiece Cakeshop v. Colorado Civil Rights Commission. In this series featuring law school luminaries, Greenfield reflects on his corporate law theories, his legal battle with the Pentagon over free speech and gay rights, and important constitutional law issues to watch out for.
Q: You are well known for your book, "The Failure of Corporate Law," in which you propose that laws controlling firms should be more protective of the public interest. What motivated you to write on this topic?
A: This question is a “why” question that pertains not only to that book, which I wrote over 10 years ago, but also to much of my legal career over the past couple of decades. I’ve always been interested in the connection between business and community. Some businesses get it right, and some don’t seem to care at all. I grew up in a small town in Kentucky. My grandfather was a coal miner. One of my earliest memories is going to the company-owned market with my grandmother, where she paid for groceries with scrip. When my grandfather retired, he suffered from both “black lung” disease and emphysema. Coal companies are not exactly known for their attentiveness to employee well-being.
Later in life, but before law school, I worked at Levi Strauss & Co., the jeans maker, in San Francisco. That company was in a highly competitive market segment, but nevertheless took seriously its obligations to its employees and communities. While I was there, a family-dominated management team took it private through a leveraged buyout, in part to insulate the company from short-term market pressures to abandon or weaken its self-imposed obligations.
I was fortunate that by the time I made it to law school, at the University of Chicago in the early 1990s, I had had a range of experiences that I could draw on to question and probe the law-and-economics view prevalent there. It struck me that many of the underlying assumptions of the movement, which were especially strongly held among the business faculty, were at least imprecise and at worst flat wrong.
I became a law professor in the mid 1990s after practicing for a year and clerking for a couple of years. My scholarly attention was devoted to fleshing out my contrarian viewpoint of the way corporate law and governance was then taught and understood. Because of my parallel interest in constitutional law, I was able to apply a more public law-like critique to corporate law.
The Failure of Corporate Law, one might say, was an effort to apply public law tools to the regulation of corporate governance, using my childhood and early career experiences as motivator and touchstones.
Q: You founded the Forum for Academic and Institutional Rights and challenged the Solomon Amendment in response to the military's "Don't Ask, Don't Tell" policy. Could you tell us a bit about your experiences with this issue?
A: Well, I was not someone you would have expected to be a leader on that issue. At the time I was focusing most of my scholarly efforts on corporate law, and I had not been a leader in the movement for LGBTQ rights. (I’m a straight ally.) But a number of students of mine convinced me that the Solomon Amendment was an outrage. It forced law schools to allow military recruiters on campus, even though they (at the time) discriminated against some of our students. We joined with a number of other professors and students around the country and decided to challenge it. We soon realized we needed to form a corporate entity to serve as the associational plaintiff. No individual law school felt comfortable being “out of the closet” in that way. That’s when we founded FAIR. We were fortunate to secure the representation of Joshua Rosenkranz, a terrific appellate lawyer, who agreed to do the case pro bono. Josh took the lead on the legal side; I meanwhile spent much of two years flying around the country trying to convince law schools to join FAIR as we litigated the suit.
In the end, FAIR represented three dozen law schools or so. We won in the third circuit but lost at the Supreme Court. Rumsfeld v. FAIR appears in many constitutional law casebooks as a case about associational rights and unconstitutional conditions. I think it’s fair to say (no pun intended) than many scholars think the case would come out the other way today.
Even though we lost, I am convinced that the case raised awareness of the discriminatory effects of “Don’t Ask Don’t Tell,” and I am confident it meant a lot to LGBTQ students that they could see their schools and professors fighting for their rights.
On a personal level, that case allowed me to forge friendships that exist to this day with Rosenkranz and others. It also stoked my interest in free speech issues, especially as it relates to corporate entities. That interest finds voice in my new book, "Corporations Are People Too (And They Should Act Like It)."
Q: You have received numerous awards for outstanding teaching. What are some of the successful teaching strategies and philosophies you employ?
A: I am still learning about how to be a good teacher, and I am hardly the best teacher even at my own school. But I love teaching law, and I hope my love for the material comes across. I also think Boston College Law students are terrific — they are smart, hard-working, earnest and engaged in the world. The advice I received from a friend after the first day I taught a class over 20 years ago is still the best teaching advice I’ve ever received: trust your students. Trust that they want to learn, that they’ve done the work and that they have a lot to offer. When I’ve gone wrong over the years its usually because I temporarily lost sight of that.
Q: As a leading expert on business law, what do you believe to be the relationship between economics and the law?
A: Wow. This is a big one. Of course both disciplines have descriptive and normative aspects. They try to understand the world and suggest ways through the complexities of human existence. I studied economics in college, and I loved how it offered tools to simplify, analyze and understand human interaction, especially with regard to money and markets. But the simplification comes at a cost — humans are not so easily caricatured. In the end, I think law has more tools to understand the complexity of human existence, and it is more nuanced in both its description and prescription. That can be frustrating — I often remind my students that good lawyers (and decent legal scholars) need to be comfortable with ambiguity.
Q: In your opinion, what are the most important current and potentially upcoming constitutional law issues to pay attention to?
A: Ah, there are so many. But the one that interests me the most is the growing use of the First Amendment speech right to oppose regulatory efforts. This is a broad trend, and I see it arising in two contexts. The first are the efforts by corporations and their trade groups to argue that the administrative state infringes on their freedom of speech in various ways. Professor John Coates at Harvard has shown that about half of all first amendment free speech claims are now being brought by corporations and their trade groups. They are using iconic free speech cases such as West Virginia v. Barnette, which protected children’s right to refuse to say the Pledge of Allegiance, to argue against any regulation that requires businesses to disclose facts. Cigarette companies, for example, cited Barnette in opposing more graphic warning labels proposed by the U.S. Food and Drug Administration. Multinational conglomerates not wanting to warn customers about addictive and toxic products argued they stood in the constitutional shoes of religious school children refusing to recite the pledge. This might strike most Americans as a reach. But the tobacco companies won a judgment in their favor in the federal trial court and on appeal.
The second context is the use of free speech and association arguments by religious business owners to win exemptions from otherwise applicable nondiscrimination laws. As our society becomes more pluralistic and diverse, those with more traditional sensibilities will increasingly try to preserve that tradition within their own fiefdoms. This was the issue in Masterpiece Cakeshop last year, where a bakery refused to sell a wedding cake to a same-sex couple. Though the court ultimately punted on the free speech question, it assumed that companies can raise these claims, even when it is the shareholders who hold the religious beliefs, not the company itself. (I filed an amicus brief in that case, arguing on behalf of a number of corporate law professors that the court should not project the religious views of shareholders onto the corporation. To prove that life is a seamless web, I wrote the brief with a lawyer, Danny Rubens, who works with Josh Rosenkranz.)
Q: Your latest book, “Corporations Are People Too (And They Should Act Like It”) is expected to release later this month. Can you expand on how exactly corporations should act like citizens?
A: Since the Supreme Court decided Citizens United in 2010, the political rights and the electoral influence of corporations have been at the forefront of our national debate.
Looking at our current constitutional and governance systems together, one would be hard pressed to imagine a system that more readily justifies a worry about corporate power: robust corporate constitutional rights married to a framework of corporate governance that is insular, exclusive, and elitist. Corporate governance norms and laws delegate corporate power to a tiny fraction of managerial and financial elites, and then constitutional law turbocharges that power. And that power can be used not only to skew politics but to distort the rules of the marketplace itself. Worse, the power can be marshaled to oppose any reform to that power.
For many, the answer to this problem is to push corporations back into a confined constitutional space where they cannot assert any of these rights. “Corporations are not people” embodies the understandable desire to rid our politics of the outsized influence of corporations and the people who control them.
But the notion of taking rights away from corporations is simplistic. It is nearly impossible to come up with a workable system of constitutional rights that meaningfully constrains government without including corporate bodies within its protective scope, at least some of the time and in some circumstances. A broad attack on corporate constitutional rights is neither workable nor advisable.
The concerns about corporate influence over our politics and economy are well taken. But the best fix for the problem of the misuse of corporate power in politics and in society is not a constitutional one. The solution is a corporate governance adjustment that encourages, even requires, corporations to take seriously their public commitments.
We should not exclude corporations from democracy, but inject democracy into them.
And instead of rejecting corporate personhood, we should embrace it. Corporations should be more like people. Corporations should take into account a multitude of obligations — as people do. They should act as though more than one thing matters — as people do. They should care about the implications of their decisions, even if it does not affect them financially — as people do.
If corporations were more like people, corporate personhood — indeed corporate citizenship — could be a positive force in our society and even in our politics.