Matthew T. Bodie

The Roberts Court and the Law of Human Resources

The rise of human resources departments parallels the increase in the myriad statutory and regulatory requirements that govern the workplace. The Supreme Courts decisions in labor and employment law cases are largely monitored and implemented by HR professionals who must carry out these directives on a daily basis. This article looks at the Roberts Courts labor and employment law cases through the lens of human resources. In adopting an approach that is solicitous towards HR departments and concerns, the Roberts Court reflects a willingness to empower these private institutional players. Even if labor and employment law scholars do not agree with the solicitousness, they should use the opportunity to develop a positive theory of HR, one that directs this workforce in a just and ethical manner.

Employees and the Boundaries of the Corporation

Employees have no formal role in U.S. corporate law. According to most theories of the firm, however, employees play a critical role in differentiating firms from markets. This essay examines the disparity in treatment and seeks to understand the ramifications of the separation of employees from the corporation. After discussing the absence of employees from the corporate structure, the essay looks at the role of the employees in theories of the firm. In contrast to corporate law, these theories generally include employees within the core of the firm, and they often explain the nature and purpose of the firm in terms of the employer-employee relationship. Other areas of the law, such as intellectual property, torts, and tax, have followed these theories in demarcating the firm to include employees (and exclude most others). As a result of this divergent treatment, employees are rendered far more vulnerable within the corporation than their role would otherwise suggest. This essay argues that we need to recenter our theories of the corporation and corporate law around the firm - and, by extension, around the employer-employee relationship. Such a shift may eventually render employees better able to manage their economic vulnerability and reduce the need for employee-specific protections.

The False Promise of One Share, One Vote

Shareholder democracy has blossomed. The once moribund shareholder franchise is now critical in takeover contests, merger decisions, and board oversight. However, the mechanisms of this vote remain largely undertheorized. In this Article, we use voting rights and social choice theory to develop a new approach to the corporate franchise. Political democracies typically tie the right to vote to the level of a persons interest in the outcome of the election. Corporate democracies, on the other hand, tend to define the requisite institutional interest quite narrowly, and thus restrict the right to vote to shareholders alone. This restriction has found its justification in the assumption that shareholders have a homogeneous interest in corporate wealth maximization. Such homogeneity, it is argued, maximizes efficient preference satisfaction. This assumption of shareholder homogeneity is false. It is becoming increasing clear, for example, that shareholders have many different types of interests in a corporation. In addition, stakeholders such as employees, consumers, and creditors also have interests in corporate governance that are not currently captured through existing contractual regimes. Moreover, many of the conclusions drawn from the assumption of shareholder homogeneity are either based on dated understandings of Arrows Theorem or, in some cases, are flat out inconsistent with the standard economic theory that they purport to embody. As a result, corporate voting schemes are sterile reflections of their more robust political counterparts. The Article argues that corporate law scholars should acknowledge the weaknesses of shareholder voting theory and should examine new ways of translating the preferences of corporate participants into a governance structure.