Corporations are not extensions of the Public Square. It is perfectly reasonable to require certain behavior as part of an employment agreement. If I ran a hamburger stand, I would fire any employee who gave political commentary or rant while serving hamburgers. And, if one chooses to air grievances against one's employer in the Public Square (i.e. on the Internet, or in newspapers), it is perfectly understandable that the employer would dismiss the employee.
To say "the Constitution does not apply to corporations" is in one way simply false: all legal entities (people, corporations, government) are required to adhere to the rule of law -- law founded on the Constitution.
But the bigger point is: the Constitution's purpose is not to protect individuals from corporations -- it's to protect us from _Government_.
Lynne Gobbell was fired because her boss didn't like the bumper sticker on her car.
During the 2004 presidential election, Gobbell put a "Kerry for President" sticker on her bumper. When her boss saw it, he said Gobbell could "either work for John Kerry or work for me." Gobbell refused to take the sticker off her car and was immediately fired.
That's pretty hard to believe - unless Ms. Gobbel was working for Bush. Can anyone here speak to the validity of some of the author's claims? It sounds like - with the above example at the very least - wrongful termination lawsuits would punish such firing practices.
In most of the US, "wrongful termination" is an urban legend. In over 40 states, employment is "at-will". You can be fired for any reason or no reason.
The exception is for people working under a contract that explicitly spells out remedies for termination without cause. Almost nobody has a contract like this.
> The exception is for people working under a contract that explicitly spells out remedies for termination without cause. Almost nobody has a contract like this.
You can negotiate for it or look for a job with it if it's important to you. A secondary effect of making it harder to let personnel go is that it makes companies more cautious when hiring. I'm thinking of situations you get in places like France, where a company isn't sure if they'll need the extra personnel in a while, so they rely on temp workers or go understaffed so as not to risk having problems letting people go later.
Tangential: I think people feeling more comfortable freelancing and doing entrepreneurship and transitioning in and out of salaried jobs and freelancing and building companies will greatly reduce employee/employer tensions. Lots of people tend to think of it as "their job" as in their property and a huge part of their identity, which I think is bad for their personal and economic growth.
I've never understood the mindset of labor laws. Employment is a two way agreement - if either party is unhappy at any time, for any reason, they should be able to terminate the agreement. In most cases the employee and employer share risk equally if the other one doesn't work out - and if they don't share risk equally they can always work out their own agreement (like options vesting over time) in a private agreement - no reason to get government involved in that.
Just like if you are upset with a local restaurant you can choose to stop going, and if they are upset with you they can refuse you service.
The key difference between the employment relationship and other mutually agreed contracts is simple: high switching costs that are mostly asymmetrical. Losing your job is extremely disruptive to an work, much more so than losing an employee is to a corporation[1]. Because of this, the labor market is in a constant monospony situation.
This is unlike, say, the market for going out to eat at a restaurant. There are very low switching costs for customers with regards to restaurants (and vice versa), so the market is efficient.
[1] Of course in some situations the opposite applies: highly skilled workers are very costly for a corporation to replace and generally have no trouble finding other work. So their bargaining position is excellent and they tend to get market wages. For example, programmers.
But if your job puts you in the Monopsony position, wouldn't it be fair to say you picked the wrong job? It might make more sense to try to pick another job that is in higher demand?
I know switching isn't easy - but nobody ever said that life is easy. Why is it the corporations problem if people make the wrong career choices in their lives?
Corporations can artificially create a monopsony, just like they can artificially create a monopoly. The music industry, for example, relies on making its talent pool—who are in high demand by the customers—feel like they are in lower demand compared to the record labels themselves, so the industry will be in a better bargaining position.
Sure, once the market is as efficient as it can be, if there's still a monopsony, that's tough for the employee. But if the monopsony can be annihilated without affecting its constituent employers and employees, all the better for all involved.
How can they artificially create a monopsony? By talking secretly to each other? It seems to me that if there is a real need, then they would have a hard time doing that.
Take software developers - if it is still true that they are still in high demand. How would corporations go about creating a Monopsony for software developers? Stop producing software? But if software is in high demand, how would they be able to prevent other companies starting up that develop software?
ADBOC[1]. Your statement is technically true, but I disagree with the subtext.
Factually, workers with no marketable skills don't have them because they didn't acquire them as students. Factually, it's not Walmart's fault that its workers have no marketable skills and thus no alternatives. However, those two facts don't imply that it is just (or societally optimal) for us to do nothing about the problem.
Workers are being paid below market wages because their switching costs are too high. This is both inefficient (market prices are efficient prices) and unfair (the very poorest workers are being paid even less because they are poor). Therefore, it is right and good that we should pass laws to help improve that situation and return wages to their market values.
Now, there's the separate question of what the best laws to do that actually are. It seems unlikely to me that allowing employees to sue for something as nebulous as "infringement on free speech" is a good idea. But I hope I've made a strong case for why some legal intervention in this situation is reasonable.
There are more employees than employers. Thus, the vast majority of people are unsympathetic to the hard decisions that employers make - many people have direct experience under a boss who is a jerk, very few have been forced to make the extremely difficult and taxing decisions employers are forced to make, where the buck stops with you and the rock and hard place calls are all yours.
People have no idea how disruptive to the workplace it would be to give employees a roving right to sue for any termination that could not be justified as being "for cause" (which is apparently what the author of this piece is pushing for).
The issue is not so much a formalistic legal issue as it is a people issue. While most people are good and decent, a minority are not - they will cause trouble for the company, for co-workers, for customers, etc. They are just bad hires who must be let go and there will inevitably be some significant number of these involved in any range of hires.
In at-will employment situations, the remedy for an employer for a bad hire is simple. You let them go. No questions asked. No legal difficulties. Even if the employee falls within a "protected category," it is still easy early on to make a judgment and act on it without adverse consequences.
If the law were to require, as a default (and as suggested in this piece), that an employer have "cause" to do such routine firings, then every employment decision of this type would be the potential subject of a lawsuit unless an employer is prepared to show "cause" through some documented evidence. Such an environment only empowers lawyers who will come in and second-guess the entrepreneurs to no end, all the while suing them for potentially significant damages for an almost infinite number of reasons ("he didn't like my bumper sticker," "he didn't like my perfume," or "my looks" or who knows what). Yes, employers can still act to get rid of bad employees. But the cost of doing this would go up substantially.
What is in danger here is private associational rights. Today, of course, everyone agrees that such rights are not absolute. If an employer discriminates against employees based on some illegitimate criterion (race, color, creed, etc.), all would concur that this is not something that should be protected by an absolute concept of private associational rights. Beyond the illegitimate bases, however, the right to associate with those you like, and not to associate with others you don't like, is such an integral part of small business life that we don't even think of it consciously in the workforce. If this rule is undercut, then all private workplace settings will become like union shops, or like government settings, where it becomes basically a terrifying event to plan for and implement the discharge of an employee.
Is it unfair for an employee to be fired for a bumper sticker? Yes. Do we want the law second-guessing and lawyers armed to sue over every such employer decision? Absolutely not. Why? Because any firing, for any reason, can potentially then be second-guessed and made the subject of a lawsuit and this would change the whole dynamic of the workplace, certainly for small businesses.
Small businesses start and fail all the time and people come and go from them even more so. Does anyone really want lawyers to become an integral part of the routine dynamics of hiring and firing? Or to have to keep elaborate paper trails on each employee because every person hired might be a future lawsuit in the making? I would hope that budding entrepreneurs, of all people, would see the significant shortcomings with such an approach.
It seems, though, that small businesses aren't the employers who would be targeted by this law—every story I've ever heard about a wrongful firing has been regarding a large corporation. In such places, there is no single face for the employee to appeal to within the company, and thus no people that are able to fix the "people issue"—this is the exact situation where outside intervention would be helpful.
If the law could distinguish small from large businesses, why not set this law to only affect the large ones?
While I used the impact on small business to most starkly bring out the impact of such a law, the impact on larger businesses would be no less radical. The "people issue" is just as acute in large businesses as it is in small. And the effect of mandating cause-only terminations in large businesses would be to create something resembling a union-like environment in which "guarantees" tend to replace incentives, and this is something that employees themselves have consistently rejected when they vote down things such as unions in the private sector.
In addition, the pattern is clear in this area: a labor law of this type applies "only" to large companies when it is enacted. Within a few years, it is either made universal or is applied by extension of the law to smaller and smaller enterprises. Thus, once it is acknowledged in principle that government-mandated "guarantees" trump private associational rights, it would only be a matter of time before such guarantees applied far more pervasively, if not universally, in the workplace.
Thus, in my view, the issue needs to be addressed as a matter of principle and not as a function of the size of the employer. People can disagree but, if they accept this for large companies as a matter of pragmatism, they will (in my view) find it applying to the small businesses of the not too distant future as well.
> Is it unfair for an employee to be fired for a bumper sticker? Yes.
Is it though? If I'm working at starbucks and my bumper sticker says 'VOTE OBAMA', perhaps that would be crossing the line. What if it says 'Don't Drink Starbucks!'. Perhaps I get a job at a republican political think tank that works for the GOP? Do I really expect not to be fired if I have a bumper sticker left over saying 'vote Obama'?
23 comments
[ 3.1 ms ] story [ 52.6 ms ] threadCorporations are not extensions of the Public Square. It is perfectly reasonable to require certain behavior as part of an employment agreement. If I ran a hamburger stand, I would fire any employee who gave political commentary or rant while serving hamburgers. And, if one chooses to air grievances against one's employer in the Public Square (i.e. on the Internet, or in newspapers), it is perfectly understandable that the employer would dismiss the employee.
To say "the Constitution does not apply to corporations" is in one way simply false: all legal entities (people, corporations, government) are required to adhere to the rule of law -- law founded on the Constitution.
But the bigger point is: the Constitution's purpose is not to protect individuals from corporations -- it's to protect us from _Government_.
Although technically correct, I think the insinuation of your phrasing is misleading.
The Constitution does 2 things:
a) establish the federal govt
b) delegate certain, limited powers.
Does the constitution not provide the platform for how citizens' natural rights are protected (Article 3)?
I.e. protect citizens against the mob (government), other individuals, and other legal entities?
If not, then why would the constitution delegate certain powers to the Federal Government?
Laws, passed by Congress, define the rights of individuals with respect to each other, employers, etc...as well as the government.
I'm not claiming large authority here -- just recalling civics and government as I was taught.
Lynne Gobbell was fired because her boss didn't like the bumper sticker on her car.
During the 2004 presidential election, Gobbell put a "Kerry for President" sticker on her bumper. When her boss saw it, he said Gobbell could "either work for John Kerry or work for me." Gobbell refused to take the sticker off her car and was immediately fired.
That's pretty hard to believe - unless Ms. Gobbel was working for Bush. Can anyone here speak to the validity of some of the author's claims? It sounds like - with the above example at the very least - wrongful termination lawsuits would punish such firing practices.
http://www.slate.com/id/2106714/
The exception is for people working under a contract that explicitly spells out remedies for termination without cause. Almost nobody has a contract like this.
You can negotiate for it or look for a job with it if it's important to you. A secondary effect of making it harder to let personnel go is that it makes companies more cautious when hiring. I'm thinking of situations you get in places like France, where a company isn't sure if they'll need the extra personnel in a while, so they rely on temp workers or go understaffed so as not to risk having problems letting people go later.
Tangential: I think people feeling more comfortable freelancing and doing entrepreneurship and transitioning in and out of salaried jobs and freelancing and building companies will greatly reduce employee/employer tensions. Lots of people tend to think of it as "their job" as in their property and a huge part of their identity, which I think is bad for their personal and economic growth.
Just like if you are upset with a local restaurant you can choose to stop going, and if they are upset with you they can refuse you service.
What am I missing about labor laws?
http://en.wikipedia.org/wiki/Monopsony
This is unlike, say, the market for going out to eat at a restaurant. There are very low switching costs for customers with regards to restaurants (and vice versa), so the market is efficient.
[1] Of course in some situations the opposite applies: highly skilled workers are very costly for a corporation to replace and generally have no trouble finding other work. So their bargaining position is excellent and they tend to get market wages. For example, programmers.
I know switching isn't easy - but nobody ever said that life is easy. Why is it the corporations problem if people make the wrong career choices in their lives?
Sure, once the market is as efficient as it can be, if there's still a monopsony, that's tough for the employee. But if the monopsony can be annihilated without affecting its constituent employers and employees, all the better for all involved.
Take software developers - if it is still true that they are still in high demand. How would corporations go about creating a Monopsony for software developers? Stop producing software? But if software is in high demand, how would they be able to prevent other companies starting up that develop software?
Factually, workers with no marketable skills don't have them because they didn't acquire them as students. Factually, it's not Walmart's fault that its workers have no marketable skills and thus no alternatives. However, those two facts don't imply that it is just (or societally optimal) for us to do nothing about the problem.
Workers are being paid below market wages because their switching costs are too high. This is both inefficient (market prices are efficient prices) and unfair (the very poorest workers are being paid even less because they are poor). Therefore, it is right and good that we should pass laws to help improve that situation and return wages to their market values.
Now, there's the separate question of what the best laws to do that actually are. It seems unlikely to me that allowing employees to sue for something as nebulous as "infringement on free speech" is a good idea. But I hope I've made a strong case for why some legal intervention in this situation is reasonable.
[1] http://lesswrong.com/lw/4h/when_truth_isnt_enough/
There are more employees than employers. Thus, the vast majority of people are unsympathetic to the hard decisions that employers make - many people have direct experience under a boss who is a jerk, very few have been forced to make the extremely difficult and taxing decisions employers are forced to make, where the buck stops with you and the rock and hard place calls are all yours.
The issue is not so much a formalistic legal issue as it is a people issue. While most people are good and decent, a minority are not - they will cause trouble for the company, for co-workers, for customers, etc. They are just bad hires who must be let go and there will inevitably be some significant number of these involved in any range of hires.
In at-will employment situations, the remedy for an employer for a bad hire is simple. You let them go. No questions asked. No legal difficulties. Even if the employee falls within a "protected category," it is still easy early on to make a judgment and act on it without adverse consequences.
If the law were to require, as a default (and as suggested in this piece), that an employer have "cause" to do such routine firings, then every employment decision of this type would be the potential subject of a lawsuit unless an employer is prepared to show "cause" through some documented evidence. Such an environment only empowers lawyers who will come in and second-guess the entrepreneurs to no end, all the while suing them for potentially significant damages for an almost infinite number of reasons ("he didn't like my bumper sticker," "he didn't like my perfume," or "my looks" or who knows what). Yes, employers can still act to get rid of bad employees. But the cost of doing this would go up substantially.
What is in danger here is private associational rights. Today, of course, everyone agrees that such rights are not absolute. If an employer discriminates against employees based on some illegitimate criterion (race, color, creed, etc.), all would concur that this is not something that should be protected by an absolute concept of private associational rights. Beyond the illegitimate bases, however, the right to associate with those you like, and not to associate with others you don't like, is such an integral part of small business life that we don't even think of it consciously in the workforce. If this rule is undercut, then all private workplace settings will become like union shops, or like government settings, where it becomes basically a terrifying event to plan for and implement the discharge of an employee.
Is it unfair for an employee to be fired for a bumper sticker? Yes. Do we want the law second-guessing and lawyers armed to sue over every such employer decision? Absolutely not. Why? Because any firing, for any reason, can potentially then be second-guessed and made the subject of a lawsuit and this would change the whole dynamic of the workplace, certainly for small businesses.
Small businesses start and fail all the time and people come and go from them even more so. Does anyone really want lawyers to become an integral part of the routine dynamics of hiring and firing? Or to have to keep elaborate paper trails on each employee because every person hired might be a future lawsuit in the making? I would hope that budding entrepreneurs, of all people, would see the significant shortcomings with such an approach.
If the law could distinguish small from large businesses, why not set this law to only affect the large ones?
In addition, the pattern is clear in this area: a labor law of this type applies "only" to large companies when it is enacted. Within a few years, it is either made universal or is applied by extension of the law to smaller and smaller enterprises. Thus, once it is acknowledged in principle that government-mandated "guarantees" trump private associational rights, it would only be a matter of time before such guarantees applied far more pervasively, if not universally, in the workplace.
Thus, in my view, the issue needs to be addressed as a matter of principle and not as a function of the size of the employer. People can disagree but, if they accept this for large companies as a matter of pragmatism, they will (in my view) find it applying to the small businesses of the not too distant future as well.
Is it though? If I'm working at starbucks and my bumper sticker says 'VOTE OBAMA', perhaps that would be crossing the line. What if it says 'Don't Drink Starbucks!'. Perhaps I get a job at a republican political think tank that works for the GOP? Do I really expect not to be fired if I have a bumper sticker left over saying 'vote Obama'?