Friday, February 17, 2012

Protecting Shareholder Rights: The case for the Minnesota Shareholder Freedom of Choice Amendment

Minnesota voters might see their November 6, 2012 ballot crowded with constitutional amendments. Among their choices could be the Minnesota Freedom of Employment ("Right to Work") Amendment. As presently worded, the Amendment would ask Minnesotans:

     Shall the Minnesota Constitution be amended to guarantee all citizens the individual freedom to decide to join or not join a labor union; to remain with or leave a labor union; or to pay or not pay dues, fees, assessments, or other charges of any kind to a labor union or any affiliated third party or charity, without having it affect their employment status?

Proponents of the amendment contend that its purpose is no more than to give individual workers the right to decide whether they wish to join or support a union. As a backup supporters also argue, as did Governor Scott Walker in Wisconsin or Mitch Daniels in Indiana, that such an amendment or legislation will facilitate a business-friendly environment that will help the economy and produce jobs.

Conversely, opponents contend–and some proponents secretly or not so secretly concede–that the real purpose of the amendment is partisan. It is an effort by Republicans to break the financial back and political power of the unions which have historically supported Democrats in elections or in lobbying for specific types of legislation such as minimum wage laws and workplace safety regulation.

But the power of labor unions politically is dwarfed in comparison to corporations and their treasuries. The 2010 Supreme Court decision Citizens United v. Federal Election Commission has unleashed corporations to spend tens if not hundreds of millions of new dollars in politics, with its impact already well documented in this and the last election cycle. This money, plus the millions if not billions of shareholder dollars spent by corporations for lobbying, gives them a significant advantage in the political process. As former chief Justice Rehnquist once stated in First National Bank of Boston v. Bellotti: “A State grants to a business corporation the blessings of potentially perpetual life and limited liability to enhance its efficiency as an economic entity. It might reasonably be concluded that those properties, so beneficial in the economic sphere, pose special dangers in the political sphere. . . Indeed, the States might reasonably fear that the corporation would use its economic power to obtain further benefits beyond those already bestowed.”

The corporate form gives some business unique advantages economically. But as Rehnquist aptly observed, these advantages need to be regulated to prevent corporations from using the resources they acquired in the economic marketplace to benefit themselves unfairly in the political marketplace.

So what is to be done? If an amendment is going to be offered to the Minnesota Constitution to give workers freedom of choice and to reign in the power of unions, fairness only suggests a similar measure be introduced to apply to corporations. Thus, Republicans and Democrats should join together and support the Minnesota Shareholder Freedom of Choice (“The Right to Personal Profit”) Amendment. The amendment would ask Minnesota voters:

     Shall the Minnesota Constitution be amended to guarantee all shareholders in publicly-traded       corporations incorporated or registered to do business in the state, the individual freedom on an annual basis to decide if any of money of the corporation shall be expended, given, donated, or otherwise used for any political purposes directly or through a third party, without having it affect their dividends or rights to profits in that corporation?

Freedom of choice is a beautiful concept. It is the essence of the American ethos and a powerful moving force in politics. Shareholders should be given the same rights within corporations that workers enjoy if the Right to Work amendment is adopted. If we are so worried about the political clout of unions, one should similarly fear corporate clout.

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