Black Metropolis Research Consortium
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Enforceability of Noncompetition Agreements and Forced Turnovers of Chief Executive Officers
No full textWe examine whether corporate boards factor the potential cost of competitive harm caused by a departing chief executive officer (CEO) into their forced-turnover decisions. Using staggered changes in the state-level enforceability of a covenant not to compete (CNC) for identification, we find that enhanced enforceability of CNCs increases both the likelihood of forced CEO turnover and the sensitivity of forced CEO turnover to firm performance. We present additional cross-sectional evidence that shows that such effects are more pronounced when firms face more severe product market threats or operate in industries with greater potential threats of predatory hiring. Investors react to turnover announcements more positively when enforceability increases, which indicates that enhanced enforceability of CNCs increases efficiency in decisions to replace CEOs
The Economics of Radiator Springs: Dynamics, Sunk Costs, and Spatial Demand Shifts
No full textHarold Demsetz famously emphasized that the relationship between industry structure and competition runs in both directions. Competition thus can lead industries to adjust to demand increases through larger firms rather than more firms. We investigate this insight empirically by examining how local gasoline retail markets adjusted to interstate highway openings. We find that when a new highway was close to a previous route, average producer size increased beginning 1 year before it opened. If instead the interstate substantially displaced traffic, the number of producers increased beginning only after it opened. These results empirically illustrate how the role of entry in the competitive process depends on whether entry makes product space more crowded
The Exception to Rule 12(d): Incorporation by Reference of Matters Outside the Pleadings
Get PDFDefendants frequently attach supporting materials to Rule 12(b)(6) motions to dismiss for failure to state a claim. The plain text of Federal Rule of Civil Procedure 12(d) dictates that judges must either exclude this material or treat the motion as one for summary judgment. However, a substantial exception has emerged that threatens to swallow the rule. The exception, called incorporation by reference, permits the consideration of outside materials when they are either referenced in the pleadings, central to the claim, or sometimes both. Courts have defined these elements differently and have diverged in their understandings of the doctrine. Incorporation by reference appealingly offers an expedient route to resolve cases. But it also skirts the text and intention of the Federal Rules. This Comment explores the history of Rule 12(d), describes courts’ varying uses of the exception, and proposes a unifying method of interpretation for the future. Drawing on other procedural rules and an analogous doctrine in contract law, it argues that only unmistakably referenced written instruments may be incorporated
The Constitutionality of Orthodoxy: First Amendment Implications of Laws Restricting Critical Race Theory in Public Schools
Get PDFThe past two years have seen a proliferation of state laws that restrict how race may be discussed in public schools. Among other topics, these laws commonly ban presentation of the viewpoint that the U.S. government—or legal system—is racist. But such policies raise important First Amendment questions: while it is well accepted that school boards and state legislatures retain great discretion to promulgate curricula, the exact scope of that authority is unclear. The Supreme Court case most closely related to this question, Hazelwood School District v. Kuhlmeier, addresses only when school districts may permissibly regulate student speech in curricular contexts. Hazelwood does not resolve the antecedent question of whether local educational authorities may constitutionally constrict the range of permissible political viewpoints in curricula.
This Comment argues that existing doctrine supports recognizing a student right to be free from political orthodoxy in public education. It proposes a burdenshifting test for vindicating that right. First, courts should evaluate whether curricular decisions restrict discussion of political viewpoints. Second, the government should have the opportunity to show that the restriction serves a legitimate interest, in part pursuant to the test laid out in Tinker v. Des Moines Independent Community School District. Finally, plaintiffs should be able to prove that the government’s restriction was based on impermissible animus. This Comment concludes by arguing that certain provisions in recently passed critical-race-theory laws should be considered unconstitutional because they restrict political discussion without legitimate justification
Academic Freedom and Misgendered Honorifics in the Classroom
Get PDFIn recent years, public universities have promulgated pronoun policies designed to encourage professors and students to respect the pronouns that others use to identify themselves. A professor who does not follow the pronoun policy and instead misgenders a student—or uses gendered words or pronouns that do not match that student’s gender identity—may be disciplined by their university for violating the pronoun policy.
This Comment argues that professorial speech misgendering students in the classroom should not be protected by a professor’s First Amendment right to academic freedom, which traditionally covers teaching and scholarship. The First Amendment protects some exercises of academic freedom by public-university professors and public universities, but the bounds of these protections are not well defined. When a professor violates an official university pronoun policy by purposefully misgendering a student as part of a classroom-management device, a conflict arises between the professor’s individual academic freedom and the university’s institutional academic freedom. This Comment first seeks to situate this type of conflict within the history of academic freedom and the judicial principles that the Supreme Court and lower courts have used to discuss academic freedom. The Comment then argues that courts evaluating a conflict between individual and institutional academic freedoms should rule in favor of whichever exercise of academic freedom ensures that students can fully access the content of the lecture. In the case of misgendering as classroom management, the professor’s exercise of academic freedom harms the misgendered student and makes it difficult for that student to fully engage with the lecture, while the university’s exercise of academic freedom to promulgate a pronoun policy furthers a pedagogical environment in which all students can equally access educational content. Thus, the university’s exercise of academic freedom should override the professor’s in this conflict
“Contrary to Law”: Determining the Scope of Qualifying Predicate Offenses for 18 U.S.C. § 545
Get PDFThis Comment seeks to resolve an ongoing dispute among courts regarding the correct interpretation of “contrary to law” in 18 U.S.C. § 545, a statute that criminalizes the unlawful importation of goods. In particular, courts disagree about whether “contrary to law” includes administrative regulatory viol ations, which would massively expand the applicability of § 545’s severe criminal penalties.
This Comment argues that analyzing previous versions of § 545 and applying canons of statutory interpretation provide support for a narrow interpretation of the statute. But these lines of analysis do not definitively establish that this interpretation is correct. As a result, this Comment considers the implications of the nondelegation doctrine, which provides a more conclusive resolution to the ongoing circuit split. Specifically, because of the structure of § 545 and because the statute itself provides no authority for agencies to promulgate new regulations, allowing administrative violations to serve as predicate offenses for § 545 would potentially permit agencies to independently use this statute to transform civil regulatory violations into criminal offenses. Therefore, to avoid separation of powers concerns, only regulatory violations that are explicitly criminalized by other statutes should qualify as predicate violations that can trigger § 545’s penalties
Easterbrook and Fischel on Corporate Purpose
Get PDFFrank Easterbrook and Daniel Fischel’s comments on corporate purpose are as fresh today as they were when they were first published in the 1980s. Starting from the “contractarian” perspective, they asked a key question about questions such as “what is the goal of the corporation?”, namely, “Who cares?”
In this contribution to the symposium volume in their honor, I examine the current corporate purpose debate through the lens of their rather brief comments that first appeared in their 1989 article, “The Corporate Contract.” In doing so, I focus on a variety of issues raised by their analysis: What are the default settings of the corporate contract? How does one contract out of the default settings? What are the limits to tailoring the default form? How does corporate law address surprise departures from initial commitments?
Examining these current issues through the lens of The Economic Structure of Corporate Law demonstrates the enduring value of Easterbrook and Fischel’s framework
Mandatory Financial Disclosures as Total Regulatory Takings
Get PDFIn the aftermath of the GameStop phenomenon in early 2021, there have been increasing calls for expanded mandatory financial disclosures particularly regarding hedge funds and short selling. Efforts to increase disclosure requirements on hedge funds may implicate the Takings Clause of the Fifth Amendment. This comment argues that mandatory disclosure of a firm’s total portfolio—its long, short, and derivative positions—constitutes an uncompensated taking of its trade secrets. This comment explores the application of current takings jurisprudence to trade secrets and financial disclosures. It concludes that the per se rule established in Lucas v. S.C. Coastal Council should apply to public disclosures of trade secrets