Fall 2020 Workshops
Center for Law & Economic Studies
Fall 2020 Workshops
October 5th, 2020 (Monday)
5:40 – 7:30 PM EDT
Jonathan R. Macey
- Sam Harris Professor of Corporate Law, Corporate Finance, and Securities Law, Yale Law School
Location: Virtual session. Link will be distributed a few days before the event. Email [email protected] for more information.
Paper/Topic: Agency Costs, Corporate Governance and the American Labor Union
Abstract: Acute agency costs exist in unions as they do in other complex organizations. Specifically, union officials are not perfect representatives of the rank-and-file workers they ostensibly represent. Far less attention has been paid to addressing the agency costs in unions than has been paid to addressing agency costs in the context of public corporations, where the separation of share ownership and managerial control long has been the subject of intense scrutiny by academics and policy-makers. By contrast, concrete suggestions for confronting agency problems in unions are few on the ground.
This Article posits that unions’ secular decline in membership and power in the United States is attributable, among other causes, to unions’ own inability to control agency costs. Specifically, workers who think that unions are corrupt and incapable of faithfully representing their interests in the workplace rationally will eschew union membership. The lack of focus on agency costs in the union context appears to be based on ideological and political considerations that tend to conflate the interests of workers with the interests of union officials, notwithstanding the fact that these interests often diverge in significant ways, with workers focused on job security, wages and working conditions, and union officials focused on maximizing the private benefits of their office.
By way of solution, this Article proposes a strategy of policy arbitrage consisting of identifying effective mechanisms for controlling agency costs in the corporate context that can be transferred to the union context and shows how such arbitrage could be accomplished. I identify four corporate governance mechanisms as particularly promising candidates for import into the union context. First, proxy advisory firms could be employed to provide rank-and-file workers with high-quality advice about how to vote in union elections. Second, existing disclosure obligations under the Landrum-Griffin Act should be both enhanced to include better disclosure of union officials’ compensation and “weaponized” by providing rank-and-file workers the right to vote up or down on such compensation through the provision of what are known in the corporate context as “say-on-pay” voting rights. Third, following Securities Exchange Act Rule 14a-8, union voting procedures should be reformed to give workers the right to make shareholder proposals that are distributed, along with the union’s voting materials, at union expense, to workers for their approval. Allowing rank-and-file workers to make direct appeals to other rank-and-file workers would enable workers to recommend internal governance reforms of unions and empower them to nominate rival slates of directors and officers for their unions. Finally, following well-established norms of corporate governance, independent directors should be introduced to union boards of directors and the responsibility for nominating union directors, determining compensation for top union officials, setting internal governance rules, and selecting the union’s independent, outside auditors should be removed from the board as a whole and delegated to committees of these independent board members.
October 12, 2020 (Monday)
5:40 – 7:30 PM EDT
Kevin E. Davis
- Beller Family Professor of Business Law, NYU School of Law
Location: Virtual session. Link will be distributed a few days before the event. Email [email protected] for more information.
Paper/Topic: The Limits Of Evidence-Based Regulation: The Case Of Anti-Bribery Law
Abstract: Evidence-based regulation is a term of art which refers to the process of making decisions about regulation based on evidence generated through systematic research. There is increasing pressure to treat evidence-based regulation as a global best practice, including from US political interests hoping to tame the regulatory state, the OECD, international trade agreements, and academics. However, there are certain conditions under which evidence-based regulation is likely to be a less appealing method of decision-making than the alternative, namely, relying on judgment. Those conditions are: it is difficult to collect data, on either interventions or outcomes; accurate causal inferences are difficult to draw; there is little warrant for believing that the same causal relationships will apply in a new context; or, the decision-makers in question lack the capacity to undertake one of these tasks. These conditions are likely to be present in complex, transnational, decentralized and dynamic forms of business regulation. The global anti-bribery regime is an illustrative case.
October 26, 2020 (Monday)
5:40 – 7:30 PM EDT
Tonja Jacobi
- Stanford Clinton Sr. and Zylpha Kilbride Clinton Research Professor of Law, Northwestern Pritzker School of Law
Location: Virtual session. Link will be distributed a few days before the event. Email [email protected] for more information.
Paper/Topic: Oral Argument In The Time Of Covid: The Chief Plays Calvinball
Abstract: In this Article, we empirically assess the Supreme Court’s experiment in hearing telephonic oral arguments. We compare the telephonic hearings to those heard in-person by the current Court and examine whether the justices followed norms of fairness and equality. We show that the telephonic forum changed the dynamics of oral argument in a way that gave the Chief Justice new power, and that Chief Justice Roberts, knowingly or unknowingly, used that new power to benefit his ideological allies. We also show that the Chief interrupted the female justices disproportionately more than the male justices and gave the male justices more substantive opportunity to have their questions answered.
This analysis transcends the significance of individual cases. The fact that the Court experimented with telephonic oral argument, the way it did so, and how the practice could be improved are all issues of profound national importance. The new format had the potential to influence the outcome of cases that have broad national significance, to shift norms of equality and transparency at the Court, and more generally to affect judicial legitimacy. If the Court favors certain parties or certain ideological camps by its choice of forum in a time of crisis, then that will undermine not only the Court’s claim to legitimacy but it also raises doubts whether any of our national institutions have the capacity to adapt to crises more generally.
November 9, 2020 (Monday)
5:40 – 7:30 PM EST
Stephanie Holmes Didwania
- Assistant Professor of Law, Temple University Beasley School of Law
Location: Virtual session. Link will be distributed a few days before the event. Email [email protected] for more information.
Paper/Topic: Gender-Based Favoritism Among Criminal Prosecutors
Abstract: Prosecutors enjoy wide discretion in the decisions they make but are largely unstudied by quantitative empirical scholars. This paper explores gender bias in prosecutorial decision-making. I find that defendants are charged more leniently when they are the same gender as their prosecutor as opposed to when the defendant and prosecutor are different genders. Such favoritism at charging translates into significantly lower sentences for defendants who are paired with an own-gender prosecutor. Further, this gender-based leniency is more pronounced in states with less prevalent sexism, cases in which gender is likely to be more salient, and on same-gender prosecutorial teams. However, gender match in defendant-prosecutor pairs is not strongly associated with differences in cooperation and bargaining. I conclude that prosecutors’ social preferences are more likely to explain gender-based leniency than differences in how male and female prosecutors work.
November 23, 2020 (Monday)
5:40 – 7:30 PM EST
J.J. Prescott
- Henry King Ransom Professor of Law, University of Michigan Law School
Location: Virtual session. Link will be distributed a few days before the event. Email [email protected] for more information.
Paper/Topic: Subjective Beliefs about Contract Enforceability
Co-Author: Evan Starr
Abstract: This paper assesses the content, role, and adaptability of subjective beliefs about contract enforceability in the context of postemployment covenants not to compete. We show that— while noncompete enforceability varies widely across states—employees of all stripes tend to believe that their noncompetes are enforceable, even when they are not. We provide evidence in support of both supply- and demand side stories that explain employees’ persistently inaccurate beliefs. Moreover, we show that mistaken beliefs are not innocuous. Rather, believing that unenforceable noncompetes are enforceable causes employees to forgo better job options and to perceive that their employer is more likely to take legal action against them if they choose to compete. However, despite mobility-reducing effects ex post, mistakenly believing a noncompete is enforceable does not appear to cause someone to be more likely to negotiate over such provisions ex ante. Finally, we use an information experiment to simulate an educational campaign that informs employees about the enforceability (or lack thereof) of their noncompete. We find that this information matters a good deal; however, information does not appear to entirely eliminate an unenforceable noncompete as a factor in the decision whether to take a new job. We discuss the implications of our experimental results for the policy debate regarding the enforceability of noncompetes.
December 7, 2020 (Monday)
5:40 – 7:30 PM EST
Gina-Gail S. Fletcher
- Professor, Duke University School of Law
Location: Virtual session. Link will be distributed a few days before the event. Email [email protected] for more information.
Paper/Topic: Equality Metrics
Co-Author: Veronica Root Martinez
Abstract: This time is different. This time the death of another Black man at the hands of white police officers has prompted calls for change not only within police departments, but across all aspects of life within America and throughout the world. These calls for change have resulted in significant displays of support for the #BlackLivesMatter movement and interest in how one might eliminate systemic racism and promote racial diversity and justice within one’s daily life and workplace. For the most part, corporations were quick to publicly align themselves as agreeing that it was time to make a change; that it is time for the lives of Black people in this country to be truly valued. Yet, as months pass, it becomes increasingly apparent that many of these corporate statements were largely performative. While corporations voiced support for the #BlackLivesMatterMovment, most failed to pair their marketing campaigns with measurable actions targeted at tackling race-based issues within firms’ own corporate structures.
This Essay looks at how corporations could more meaningfully contribute to the #BlackLivesMatter movement, with a specific focus on the demographic composition of corporations’ own organizational structures and supply chains, as well as ways in which firms might contribute to their surrounding communities. Corporations, however, often need incentives to change their behavior. Recognizing this, this Essay addresses steps the market, via institutional investors, can take to encourage firms to move past making statements and towards the implementation of strategies to confront the impact of discrimination, bias, and racism head on within their organizations.
Building on literatures discussing social movements, corporate governance, compliance, and organizational behavior, this Essay argues that institutional investors should find ways to require firms to adopt what we are terming “equality metrics.” Institutional investors should incentivize firms to (i) identify a list of specific, assessable goals; (ii) adopt policies and procedures in an effort to achieve their goals that can be tested and measured; and (iii) use the results of their metrics to direct their future efforts at creating a more equitable organization, whether that means investing more dollars or abandoning certain initiatives all together for lack of success. To ensure corporations truly join the #BlackLivesMatter movement, institutional investors must demand more than marketing campaigns; they must demand what is required for a whole host of other corporate goals—empirically proven strategies targeted at specific and measurable objectives that result in success.