Labor Speech, Corporate Speech, and Political Speech: A Response to Professor Sachs

Matthew T. Bodie^*

Why do corporations spend money on politics? A recent report by the Manhattan Institute found that “most firms, like most individuals, behave rationally and strategically in their spending decisions on campaigns and lobbying, devoting resources in ways that, they have reason to expect, will benefit the corporations themselves and their shareholders.”¹ This is not surprising. The Supreme Court’s decision in Citizens United v. FEC² remains deeply unpopular amid fears that corporate money will swamp our political system. Political spending enables corporations to get greater access to government officials and potentially a greater say in designing legislation and regulation.³ Companies make political contributions and spend on political advertising because it’s good for business—their business. Campaign contributions help unions, too. The Service Employees International Union (SEIU) spent an estimated $60 million to help elect Barack Obama in 2008.⁴ During the president’s first six months in office, no one logged more White House trips than then-SEIU President Andy Stern. He visited twenty-two times, including seven inside the Oval Office.⁵

The Citizens United decision opened up the potential for corporations and unions to give unlimited amounts of money in support of politicians and their campaigns for office. However, at the same time, the Court has continued to restrict the ways in which unions can draw upon their own funds for such purposes. Just this past spring in Knox v. Service Employees International Union Local 1000, the Court held that the union had violated the First Amendment rights of objecting nonmembers when it required them to pay a special assessment for political funds.⁶ The case presented an unusual situation: The union seemed to have overstepped existing legal requirements for allowing nonmembers to opt out of political spending, and it had already promised to return the funds. Nevertheless, the majority opinion took the occasion to go beyond the question at hand and impose new, more onerous requirements.

Although the disparity between union and corporate political spending has existed for some time,⁷ the decisions in Citizens United and Knox both highlighted and exacerbated the divide. Unions can only collect funds for political donations from those represented employees who do not object. Corporations, on the other hand, can use funds from their general treasury without providing any exit for shareholders who disagree with such spending. This “asymmetry” in treatment is the subject of Benjamin Sachs’s article, Unions, Corporations, and Political Opt-Out Rights After Citizens United.⁸ Sachs argues that the traditional reasons for the distinction—that absent opt-outs, union nonmembers would be “compelled” to give money for political purposes, while corporate shareholders are not—do not hold up under scrutiny. As a result, Sachs contends that “[i]f Congress or the Court intends unions and corporations to be on equal footing with respect to campaign finance, . . . unions and corporations ought to be treated symmetrically when it comes to political opt-out rights.”⁹

I agree with Sachs that the current restrictions on union spending create a significant disparity between corporate and union political power. But I do not agree with his solution. Sachs argues that shareholders suffer from much of the same compulsion to speak as those represented by a union and that therefore shareholders should be given the same opt-out rights that represented nonmembers enjoy.¹⁰ Rather than extending opt-out rights to everyone, however, we should recognize that union political expenditures are part of the costs of doing business. Whether it is labor speech or corporate speech, it is all “business” speech—namely, part and parcel of operating in a modern economy. Neither represented employees nor shareholders should have the right to withdraw their funds from so critical a part of their organization’s operations.

I. The Supreme Court’s Perspective: Labor Speech as Compelled Speech

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