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The Human Capital Management Movement in U.S. Corporate Law
No full textCorporations cannot exist without workers, yet workers are not part of the formal or informal governance structures established by U.S. corporate law. Commentators and policymakers have bemoaned this state of affairs for decades, to little avail. Since the mid-2010s, however, a concept related to workers, human capital management (HCM), has become an increasingly prominent part of U.S. corporate governance. HCM is premised on the notion that workers can be viewed as assets and ought to be managed just as carefully as firms manage physical and capital assets. In practice, HCM is an expansive concept that has been used to refer to workforce training, compensation and retention issues, gender pay equity, diversity and inclusion, health and safety, matters related to corporate culture, employees\u27 ability to participate in stock purchase programs, and various other matters.
The speed with which HCM has emerged and the depth and breadth of its reach have been surprising. While broadly fitting within the rubric of environmental, social, and governance (ESG) factors, HCM has quickly surpassed more traditional ESG topics in terms of prominence and uptake. Boards of directors have started to focus on HCM as part of their monitoring and oversight responsibilities, including by amending committee charters to cover HCM matters. Investors are actively engaging with firm management and boards on questions pertaining to HCM Despite its deregulatory posture at the time, in August 2020 the Securities and Exchange Commission (SEC) adopted a new rule requiring HCM disclosure by public companies. Pending legislation could create HCM disclosure mandates that are considerably more extensive. A variety of private standard-setting organizations have developed detailed frameworks for HCM disclosure, and many firms have started reporting information in accordance with these frameworks. Taken together, these developments represent a powerful and heretofore unprecedented push to incorporate worker-related concerns in corporate governance-a phenomenon I term the HCM movement. This Article is the first to delineate the HCM movement and analyze its origins, development, impact, and normative desirability. In the aftermath of the lingering economic dislocation caused by the 2008 financial crisis and the still-ongoing public health and economic crises unleashed by the COVID-19 pandemic, there is a tangible willingness by policymakers, firms, investors, and others to reconceive institutional arrangements that have been taken for granted for decades. This Article\u27s timely analysis of the HCM movement seeks to inform some of the attendant public and corporate governance policy choices.
Subject to certain qualifications, the Article views HCM as a broadly positive and much overdue corporate governance development: HCM disclosure contributes to better and more accurate firm valuation by shining a spotlight on a key driver of success in the modern knowledge-based economy; HCM oversight at the board level ensures that boards focus appropriately on the management of what has come to be referred to as a mission-critical asset. To realize HCM\u27s full promise, however, all participants in the HCM movement should seek to disambiguate the HCM concept by carefully defining it, breaking it down into its appropriate constitutive elements, and, to the extent possible, focusing the relevant discussions on those specific elements. The weight of the empirical evidence and the appropriate policies for corporate boards, the SEC, and private standard-setters will vary depending on which element is under consideration. In addition, boards should resist isomorphic approaches, particularly ones developed by organizations such as large asset managers that are lacking in regulatory legitimacy, accountability, and HCM expertise. The SEC can and should serve as a nexus for coordination among the various participants in the HCM movement. As a first step, the SEC should revisit the HCM disclosure rulemaking process and reject the unstructured, principles-based approach reflected in the August 2020 HCM disclosure rule, which is based on an impoverished understanding of the important concept of materiality. In its final part, the Article considers the limits of HCM and sounds a note of caution with respect to HCM\u27s potential to address problems outside corporate law The rise of the HCM movement has highlighted the need for a governmental human capital development and worker protection agenda; in other words, current socio-economic conditions likely require new measures aimed at the development and protection of human capital, not just its management
Unrules
Get PDFAt the center of contemporary debates over public law lies administrative agencies\u27 discretion to impose rules. Yet for every one of these rules, there are also unrules nearby. Often overlooked and sometimes barely visible, unrules are the decisions that regulators make to lift or limit the scope of a regulatory obligation through, for instance, waivers, exemptions, or exceptions. In some cases, unrules enable regulators to reduce burdens on regulated entities or to conserve valuable government resources in ways that make law more efficient. However, too much discretion to create unrules can facilitate undue business influence over the law, weaken regulatory schemes, and even undermine the rule of law. In this Article, we conduct the first systematic empirical investigation of the hidden world of unrules. Using a computational-linguistic approach to identify unrules across the Federal Register, the Code of Federal Regulations, and the United States Code we show that unrules are an integral and substantial feature of the federal regulatory system. Our analysis shows that, by several conservative measures, there exists one obligation-alleviating word for approximately every five to six obligation-imposing words in federal law. We also show that unrules are surprisingly unrestrained by administrative law. In stark contrast to administrative law\u27s treatment of obligation imposing rules, regulators enjoy greater discretion when deploying unrules to alleviate regulatory obligations. As a result, a major form of agency power remains hidden from view and relatively unencumbered by law. Recognizing the central role that unrules play in our regulatory system reveals the need to reorient administrative law and incorporate unrules more explicitly into its assumptions, doctrines, and procedures
Balancing Trade and Economic Security: Andritz v. United States and the Role of Customs and Border Protection in Enforcing the Plant Protection Act
Get PDFThis paper examines the case of Andritz v. United States—first filed in the U.S. Court of International Trade then transferred to the U.S. District Court for the Southern District of Texas—as a demonstrative case study highlighting the collaboration between U.S. Customs and Border Protection (CBP) of the Department of Homeland Security and the Animal and Plant Health Inspection Service (APHIS) of the Department of Agriculture. CBP is charged with facilitating legitimate trade and travel while safeguarding the borders of the United States to protect against, inter alia, the entry of dangerous goods, including through agricultural import and entry inspection. Where these priorities overlap and potentially conflict, the agency is tasked with making reasonable decisions quickly, on the basis of the information available and in consultation with relevant subject matter experts across the Federal Government. To facilitate this process and, where challenged, its expeditious and effective judicial review, counsel advising the trading community should familiarize themselves with the legal sources governing the allocation of relevant authorities and providing for appropriate judicial review. The Andritz case provides a useful view of CBP’s enforcement of the importation-related aspects of the Plant Protection Act, and showcases the agency’s close collaboration with the Department of Agriculture. The case also suggests important lessons for international trade attorneys, concerning both the potential impact of agricultural laws upon importation and the appropriate avenue for judicial review in this context
Virus as Foreign Invader: U.S. Voters & the Immigration Debate
Get PDFNativist sentiments against classes of immigrants have existed since colonial times. But views about immigration and immigrants drive U.S. electoral politics now more than ever, accounting for a significant number of voters who crossed party lines in the 2016 presidential election. The COVID-19 pandemic has the potential to harden deeply-held beliefs about outsider threats and further entrench the polarization of public views on immigration. During his campaigns and term in office, President Trump popularized nativism, breaking from the received wisdom of the Republican party. Casting the virus as a foreign invader, he built on fears of the contagion to alter immigration policy in fundamental ways, including shutting down the border and eviscerating asylum protections. Nativism has allowed President Trump and his supporters to harmonize their contradictory beliefs that, on the one hand, anti-virus public health measures do not require strong collective action within the country, but, on the other, they justify extreme restrictions against immigrants. Over the long term, changing demographics and an increasingly positive view of immigrants and immigration signal that the country is on a trajectory to a more open society. In the short term, however, the Biden administration must contend with the surge of nativism stoked by President Trump and exacerbated by the COVID-19 pandemic
Gotta Catch ‘Em All!: The National Diet’s Inadequate Attempt to Control Manga Pirates
Get PDFInternet piracy threatens Japan’s most popular cultural exports: manga and anime. Fans have taken to translating and distributing the works online for other fans to enjoy because official translated versions of manga and anime are released overseas later than the original in Japan, or they are never released at all. In order to combat the illegal downloading and distributing of manga, the National Diet, Japan’s legislature, passed an amendment to the Japanese Copyright Act that increases punishments for leech sites and illegal downloading of manga.This Note discusses the manga and anime industries and their struggles with piracy before reviewing the copyright regimes in the United States and Japan. In critiquing the Japanese Copyright Amendment, this Note considers the hardships of enforcement and the manga and anime industries’ resistance to change with new technologies. This Note concludes that a comprehensive licensing regime is needed to stop manga and anime piracy. Such a regime would facilitate timely distribution to satisfy overseas demand, and copyright owners would profit from the expanded market rather than lose out to piracy
The Statutory Death of the Gig Economy: How California Policy Incentivizes the Automation of Five Million Jobs
Get PDFWith the advent of the gig economy, many have benefited from the availability of flexible work, particularly in the service industry. Since then, whether these workers are independent contractors or employees—entitled to certain rights and benefits—has been intensely debated. This Note examines the different legal approaches used in worker classification and the ramifications an employee designation could have on the estimated five million jobs the gig economy currently supports. Accordingly, this Note advocates the current state of the law is inept as applied to the gig economy and examines a potential framework to align the benefits of the gig economy while protecting against employee misclassification
