What if Unions Were Corporations ?
Here are my confused thoughts about the Burwell v. Hobby Lobby and Harris v. Quinn decisions. Unfortunately, I am Waldmann not Mann and don’t know anything about the law.
I will pretend that there is some logic behind the decisions. In Burwell v. Hobby Lobby the majority found that Hobby Lobby has religious freedom — that a profit making corporation is a person for the purposes of the Constitution. In Harris v. Quinn the majority found that the SEIU can not contract with the state of Illinois to pay money mostly to home health care workers and partly to the SEIU in exchange for home health care. Unions, unlike corporations, are not legal persons to the court.
My question is what stops unions from reconstituting themselves as cooperatives ? What if the SEIU were SEIU incorporated owned one member one share by the shareholders of the SEIU (the physical persons formerly known as service workers who have voted to make the SEIU their exclusive bargaining agent). Then Illinois could contract out home health care to SEIU inc which would pay what it pleases to those shareholder-employees who provide home health care in Illinois and keep what it pleases for overhead.
What possible objection could the five conservative justices have to such an arrangement ? I’m sure they would think of something, but I can’t imagine what it might be. States (and the Federal government) regularly purchase services from contractors with no requirement that all the money go directly to the shareholders and the employees who directly provide the service.
I will try to imagine an objection. It might be noted that the transition from direct employment of service workers to contracting out to SEIU inc would be a no-bid contract. I don’t think the Supreme Court can require the elected branches to contract out only via open bidding. No-bid contracting might be bad policy, but I don’t see a Constitutional issue.
OK now I will pretend that they decide that the 14th amendment (for example) mandates open bidding for all government contracts. Oh hell I will pretend that they decide that the 3rd amendment mandates open bidding for all government contracts. This changes nothing. Illinois could ask for bids from organizations which can guarantee provision of all currently provided health care starting 1 second after the contract is signed. Any firm could apply, but only SEIU inc (that is the current home health care workers) could deliver without any transitional disruptions because there is no real transition (except in the eyes of Supreme court justices who love corporations and hate unions).
This isn’t limited to SEIU and Illinois. The UAW could create UAW incorporated a cooperative owned by UAW members. Then they could all quit say Ford. Then UAW inc could offer Ford the auto building services of UAW incorporated. Free constracting in the free market has lead to the creation of many firms which provide workers to other firms (I am thinking of temp agencies). One of the points of contracting out has been to get away from unions. A firm whose employees have voted to recognise a union as exclusive bargaining agent can buy services from an un unionized firm. It seems to me that the trick used against unions can be used by unions to undo Harris V Quinn.
I’m sure this post is even less comprehensible than my usual posts. I will try to explain.
Illinois purchases home health care services from SEIU members. It also contracts a lot of work out to for profit firms. I will just pretend that, for example, it purchases art supplies from Hobby Lobby. The Supreme Court has decided that Hobby Lobby can decide what to do with its revenues even if employees or minority shareholders object. The Supreme court has also decided that their can’t be a contract between Illinois and workers whose exclusive bargaining agent is the SEIU in which the workers are paid and the SEIU is paid. To Alito et al everything would be completely different if Illinois instead paid for home health care provided by a corporation which then employs home health care workers. Then money spent on managers who don’t personally take care of people in homes would be none of the Supreme Court’s business. So why doesn’t the SEIU create SEIU incorporated ?
My ranting gets even more incoherent after the jump.
I’m pretty sure that this isn’t the reason that I find Alito’s reasoning incomprehensible. To be frank and brief, I think that today we have further redundant proof that the conservative majority of the Supreme Court presumes to rule as an oligarchy of five with no respect whatsoever for judicial restraint, federalism, the Constitution, the separation of powers, or any limit whatsoever on their power. I think the opinions taken together can be summarized as “we will do whatever we please, and you will obey us.”
I also think that their pleasure is that conservatives get what they want. One of the most extreme and outrageous passages of the Burwell v Hobby Lobby decision is “This decision concerns only the contraceptive mandate and
should not be understood to hold that all insurance-coverage mandates, e.g., for vaccinations or blood transfusions, must necessarily fall if they conflict with an employer’s religious beliefs.” (infuriating pdf warning) So religious objections to contraception are protected and religious objections to transfusions and vaccination aren’t. The five justices who concurred are all Catholic so members of a denomination that (in theory) forbids contraception but has no problem with transfusions or vaccination. The decision says that a religious objection with which Pope Paul VI happens to have agreed are protected while those of Jehovah’s witnesses aren’t. Now I am pretty sure that the Catholics on the Court (also including dissenter Sotomayer) don’t take Humanae Vitae seriously (although Nancy Pelosi does). I think that it is mostly a coincidence that the decision says that the doctrine of their church is protected while the doctrines of other churches aren’t. But that happens to be exactly what Alito wrote. To me this indicates impatience with the pretence that they are interpreting the Constitution and willingness to make it obvious that they are legislating.
Finally 2 loose paragraphs: I included federalism on the list, since they presumed to declare a contract signed by the state of Illinois to be invalid. Of course it has long been obvious that no one really gives a damn about federalism and least of all does the Federalist Society. Of course almost everyone knows this.
I guess with considerable confidence that the proprietors of Hobby Lobby are evangelical Protestants not Catholics.
Now I google. Yep. I probably read that somewhere and didn’t really guess.
Robert I know probably less about the law than you do but I think the Hobby Lobby decision was partly based on the corporate ownership. It’s my understanding that Hobby Lobby is a privately held corporation. I believe, and Bev or anybody else’s can correct me if I’m wrong, but the decision wouldn’t have been the same for a publicly held corporation.
Little John seems to me the distinction was not between ‘Public’ and ‘Private’ which distinction hs to do with whether shares are publicly traded as to the distinction between ‘closely held’ vs not. That is any major corporation ‘public’ or not where 51% or more of ownership is held by 5 or fewer persons might qualify. Examples I heard today include Dell.
I am not a lawyer either but am enrolled in a college Business program and currently taking a course in Business Law building on some courses hat addressed corporate structures more generally and trust me there are unlimited ways to structure almost my company to meet whatever limitations exist whether that be through Corporations or LLCs or Partnerships. My billionaire who wants to follow a Hobby Lobby in this just has to assemble a halfway competent team of incorporation and tax lawyers along with some smart accountants.
Why not hold corporations to the same laws as dictate Unions. For example contributions to elections. Force companies to check with their stockholders first and before contributions. Here are Erwin Chemerinsky’s thoughts:
“In 2010, in Citizens United v. Federal Election Commission, the Supreme Court expressly rejected the concern that corporations should not be able to spend the money of their shareholders on political expenditures. In prior decisions, the Supreme Court specifically said that the government could restrict independent political expenditures by corporations so as to protect shareholders from having their money spent for political candidates they oppose. But Citizens United brushed this concern aside, overruled these decisions, and held that corporations can spend unlimited sums to have candidates elected or defeated.
In light of Knox, one solution for state legislatures will be to require opt-in for both corporations and unions. A state can adopt a law which says that neither a corporation nor a union can spend money on political activities without the consent of the individuals. If the Supreme Court is going to require opt-in for unions, it seems only fair and appropriate that the same be required for corporate political spending.”
What if corporations could make you buy their stock?
Your point for this oblivious one?
Sorry Bruce, I use the terms “private” and “closely held” interchangeably which is probably pretty sloppy thinking. The WSJ has a nice little article about the definitions of “private” and “closely held”. The article’s conclusion is that more litigation around this subject is expected.
well, i know less about the law than anyone, but
it seems to me the supremes got it extremely wrong: the point about a corporation is not who owns it, but that it is chartered by the government for some purpose the government deems in the general welfare to tolerate the concentration of wealth and economic power while reserving to itself (the government) the right and duty to regulate the exercise of that charter.
so, again, the point is not that hobby lobby is “closely held” but that it is a “corporation” which is NOT a person or even an aggregate of persons, but simply a legal entity which ought and must be held accountable to and by the people.
always a pleasure to be able to agree with you. i have been advocating for years that unions become “businesses” in order to negotiate service contratcts with “employers” and manage all that pension and wages and work conditions etc.
but of course the corporations DO require you to buy their stock if you want to collect dividends.
if you are going to enjoy the benefits of union representation you need to pay your dues, and accept the union’s decisions about what political activity is beneficial to… you.
it’s a concept as old as democracy.
trouble with you is you want a free ride. it’s a concept called libertarian… a great deal different from liberty.
I’ve argued for years at STPO that if corporations are nothing more than a government grant to the the free assembly of capital then unions are simply a free assembly of labor that is entitled to the same protections and privileges.
Of course historically when labor combined in this way then they were called a cartel which was, in the vocabulary, even worse than a monopoly. That view presupposes that any combination of labor takes on monopolistic characteristics whereas we all know capital doesn’t do that (smirk).
Recent SCOTUS decisions have extended to privileges and protections given to corporations that go far beyond state chartering mechanisms. That’s a big problem but so is the least common denominator problem of state chartering. One of the most salient arguments against the Right’s healthcare argument that suggests that selling across state lines would solve everything is that some states would make egregiously low standards. State grants of corporate charters do the same thing which is why so many corporations flock to Delaware to incorporate.
The solution would be to create a Federal corporate charter required of any corporation that did business across state lines. Such a statute should clearly define exactly what rights and privileges a corporation might enjoy as well as what standards and responsibilities it would gave to adhere to.
Such a construction could effectively be used to address corporate political contributions and might also help limit tax avoidance.
Of course at this point the problem is that the Court has become legally incoherent and ideologically driven.
I forgot to add that you have lost, will lose, more money to corporate power than you have ever lost in union dues or government taxes. Ever.
Government, and unions, are the only hope the ordinary person has ever had of resisting the predators, who are organized from the level of the street gang to that of international banking. But they… the predators… always begin by telling you “whatever you do, don’t organize … let us organize you.”
This post reminds me of my favorite sub-title in the Kung-Fu movie “The Iron Monkey”. Upon learning that the cure for the Buddha’s Palm contained ingredients such as cobra venom, a character said,
“He uses poison to fight poison – brilliant!”
Hi, Waldmann. In a comment in response to a comment by Bill in the thread to my latest post on Harris, I wrote:
“I think (and hope) that bargaining units will now stop requiring the union to represent non-union members who opt out of paying agency fees. You’re on your own, folks! The problem will be in getting the employer to agree to limit the compensation benefits bargained for to union members and non-union employees who pay the agency fee.”
I love your observation that to Alito et al everything would be completely different if Illinois instead paid for home health care provided by a corporation which then employs home health care workers. Then money spent on managers who don’t personally take care of people in homes would be none of the Supreme Court’s business. So why doesn’t the SEIU create SEIU incorporated ?
Historically, of course, the National Labor Relations Act gave employees protections (not enough protections, but still …) when they were trying to organize and join a union. The employees couldn’t be fired for organizing or for supporting unionization, etc., and there were some mild protections for union members who participated in strikes. There also is the National Labor Relations Board, which mediates disputes between unions and employers.
But for public-employee unions, those protections are irrelevant, I think. So you’re right that employees could form cooperatives. But I don’t think governments can agree to limit their hiring to people who are members of the cooperative. So, as a practical matter, they’d all be back to the situation that’s at issue in Harris.
In that comment of Bill’s that I was responding to, he linked to an article from two years ago about the then-recent Alito opinion that was a preview of what he wanted badly to do in Harris and spends most of the Harris opinion writing as if he had the votes in Harris to do exactly that.
The author of the article included this quote of Alito’s in that earlier opinion, Knox v. SEIU:
“Similarly, requiring objecting nonmembers to opt out of paying the nonchargeable portion of union dues—as opposed to exempting them from making such payments unless they opt in—represents a remarkable boon for unions. Courts ‘do not presume acquiescence in the loss of fundamental rights.’”
In my comment to Bill, I quoted that line and said: “No, courts just methodically violate fundamental rights of everyone except corporations and Movement Conservative litigants.”
The current tactic of these people is to just put a Fundamental Rights tag on anything they want in order to strike down laws they don’t like. “Courts ‘do not presume acquiescence in the loss of fundamental rights.'” But commentators are catching on to that, and in turn a good number of people are, too.
“but of course the corporations DO require you to buy their stock if you want to collect dividends.”
Yeah, Dale. Exactly.
I think unions as corporations could probably manage to represent their “employees” without having to worry about their clients hiring people outside of their labor contract. Even if the client were to offer the same wages and benefits as the union-corporation, it is unlikely they, the client, would want to bother. Let the union-corporation take care of all the problems associated with being the employer. And under such a system i think it would be a pretty poor union that couldn’t persuade employees they were better off working for the union than for their old boss.
OIC, the SEIU owns those jobs, just like corporations own their stock. Is that what you mean?
There are many corporations who claim to make the world a better place, – well maybe, maybe not. But if they attempt to require me to pay them money whether I want their shitty product or not, I would respond same as Harris.
Suppose a car maker, General Moaners, claims that their cars are so safe and so ubiquitous that even those few who do not drive GM cars benefit from GM cars being on the highway in such high numbers, and so GM seeks compensation for this benefit (enhanced safety for all), branding those who refuse as free-riders.
My view is that GM should get compensated when they convince a person to purchase one of GM’s cars, the benefit that supposedly flow to the driving public from GM’s general practices does not warrant extra payments to GM, they get paid when they sell a car. As in Coberly’s 10:35PM comment, they are not much of a car company (or maybe their product is not as good as advertised) if they cannot convince me to buy one of their cars.
it is hard enough to talk to someone who is trying to make sense.
as far as i know, no union is trying to collect dues from persons who are are not working under the benefit of a union contract.
it occured to me after i wrote my last comment to you that the problem with Waldmanns idea… which i like… is that sooner or later the “union-corporations” would become just another corporation exploiting labor for profit.
still be worth a try thought.
Thanks for many interesting comments.
@Michael Hansberry I think I explained how SEIU inc could do it. The could keep money for SEIU inc and not pass all through to the workers just as temp agencies do. The choices are that no one has to purchase services from SEIU inc and that employees of SEIU inc could quit.
The entities which are now employers would be customers of SEIU inc (as they now purchases services from other firms). The people who now have SEIU as their exclusive bargaining agent would be employees of SEIU inc (they might also be members of the SEIU cooperative and so also part owners of SEIU inc). If I purchase a good from a firm, on average over time I pay their overhead (or the firm goes broke). I can’t just deal directly with the people who made the good and pay only them.
@Coberly Oh I didn’t know you have been advocating this. I should have linked and would have if I had known.
@Bev thanks for informing me (and all who read the thread)
@LittleJohn . I wasn’t really talking about the Hobby Lobby case and sholdn’t have mentioned it. I was talking about how not all corporate gross revenues have to go to shareholders nor do they all have to go to production workers (and not just because what the workers get isn’t available to shareholders).