Marco Rubio wants to go after companies – but there is a catch
Marco Rubio tries to get ahead of the Republicans, unveiling a legislative offensive against the so-called “awakening” program of the left, introducing a bill that would encourage shareholders of large state-owned companies to prosecute company directors who engage in “awakening”.
The 21 pages invoice, dubbed the “Mind Your Own Business Act,” federally prohibits business leaders from making “non-pecuniary” decisions to promote the “public image” or “employee morale” of the company, thereby creating a cause of action for shareholders aggrieved by a company’s interest in “awakening” profit maximization. Shifting the burden of proof to executives, the measure “would require company directors to prove that their” awake “actions were in the best interests of their shareholders. “
Rubio’s bill provides several examples of how executives have apparently allowed “political bias” to undermine their fiduciary responsibility to shareholders. This implies that companies have in the past withheld goods and services from particular states and industries, encouraged racial and gender stereotypes, and used the board and members to advance political agendas.
“More legal tips that protect these corporate executives from liability,” Rubio said in a press release. “If they truly believe being awake is good for business, they should say it – and prove it – under oath in court.”
But critics say the nebulous nature of the bill casts endless doubt on how it would actually be implemented, with some even claiming it applies the same type of big government approach to big business as Republicans do. generally hate.
“It doesn’t make sense,” said Richard Painter, a Democrat who served as the White House’s chief ethics counselor for President George W. Bush. “Businesses don’t have to maximize their profits,” he told Salon in an interview. “It’s a complete mistake directors have to maximize profits. They can focus on the best interests of the job, the environment, and a range of concerns.”
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“What if businesses don’t think ‘profit maximization’ is the most important thing? »Echoes Lawrence B. Glickman, professor of American studies at Cornell University, by e-mail. “What if they thought that investments in the future – and therefore lower or zero dividends to shareholders – are more important? And what about their duties to their employees? “
At present there is no provision in federal corporate law which requires corporations to maximize profits or returns to shareholders – a fact recently confirmed by the 2014 Supreme Court decision in Burwell v. Hobby Lobby Stores, Inc. “Modern corporate law does not require that for-profit corporations pursue profit at the expense of everything else, and many do not,” the court wrote. To start, or state codes or corporate jurisprudence have never set a clear precedent for such a requirement. In fact, both confer broad discretion on executives when it comes to ensuring the well-being of the company.
When shareholders sue corporate directors for breach of their fiduciary responsibility (i.e. derivative lawsuits), they are again doing so under the jurisdiction of state laws. But Rubio is pushing for the “federalization of company law,” Painter said – and it’s an approach Republicans would normally denounce as fascist or anti-capitalist.
Such Republican rhetoric has been common for the past decade, with politicians like Rubio repeatedly stressing the apparent need to protect the rights of states from federal excesses, especially when it comes to social issues.
In 2015, just months before the Supreme Court legalized same-sex marriage, Rubio argued that same-sex marriage should be resolved individually state by state, saying in an interview with CBS: “States have always regulated marriage. And if a state wants to have a different definition, you should ask the state legislature and have a political debate. I don’t think the courts should make that decision.
This year, Rubio again alluded to state rights in his opposition to the John Lewis Act, a Democrat-backed overhaul of voting rights. “Democrats want irresponsible bureaucrats in Washington to run our election in Florida,” he said noted in a June press release. “Not only is it unconstitutional, it is reckless.”
Other critics of the Rubio bill have claimed it will be shut down by existing legal precedents.
In fact, doctrine already exists to prevent aggrieved shareholders from filing the kind of frivolous lawsuits that would flow from the Rubio Bill, argued UCLA law professor Stephen Bainbridge. “Right now,” he wrote on his blog, “the kind of awake decisions … would almost certainly be immune from judicial review by the business judgment rule.” This rule presumes that corporate directors serve the interests of their companies, placing the burden of proof on complainants to argue otherwise. But Rubio’s measure does not explicitly mention this doctrine, asking questions about the compatibility of the two.
Rubio’s “Mind Your Own Business Act” comes as part of a larger GOP effort to shift the responsibility for law and order onto Republican voters.
Last month, Texas adopted a near-total ban on abortion that prompts its residents to prosecute anyone who helps, provides or receives an abortion after six weeks of pregnancy. The measure effectively places a minimum premium of $ 10,000 on violators, allowing plaintiffs to collect tens of thousands of dollars in compensation. From the perspective of both 2016 and 2020 elections, Donald Trump has also encouraged his supporters to engage in illegal polls monitoring unfounded fears surrounding voter fraud. Voting rights advocates have widely condemned Trump’s rhetoric as a bullying tactic that could lead to voter suppression.
In some cases, Trump has openly promoted vigilante violence, Salon’s Heather Digby Parton Noted last month. Ahead of a rally in 2017, Trump promised his supporters he would “pay the legal fees” if they “knock the shit out” of protesters at the event. That same year, the former president claims that there were “very good people on both sides” of Charlottesville, the “Unite the Right” rally in Virginia, which brought together hundreds of neo-Nazis and counter-protesters in a violent clash.
The GOP’s substitution of its own constituents can be attributed to the brutal treatment of racial minorities by the United States, Glickman said. “I think this is part of a long tradition of punishing extrajudicial violence – you can go back to the Fugitive Slave Act, KKK and other vigilantes during reconstruction and lynching.”
In 1850, Congress passed a second version of the Fugitive Slave Act, which authorized slave owners to contract private bounty hunters to retrieve slaves who had fled to free states. The law also punished anyone who aided or abetted the escape of runaway slaves to six months in prison and a fine of $ 1,000 (approximately $ 35,000 in 2021). Slave owners were known to publish newspaper reward offers for escaped slaves.
In the days of Jim Crow, Stefanie Lindquist wrote in The Conversation, the country saw a privatization of the electoral system which was again militarized against black Americans. For example, from 1889 to 1953, Lindquist wrote, the Jaybird Association, an all-white political organization, single-handedly ran its own “pre-primary” to scrutinize party candidates for election. The effort was designed to combat the biracial coalition of former Republicans who had maintained control of the county government since 1869.
The Rubio Act also comes amid an apparent growing rift between the GOP and US business.
In April, big companies like Coca-Cola and Delta retreated of the restrictive GOP-backed voting bill in Georgia in response to progressive outrage over the bill’s potential to suppress minority voters, even though those same companies had donated to the measure’s sponsors. The move earned US companies harsh criticism from the GOP, which accused it of falling into the hands of “awakened” left-wing agents. In the aftermath of the fatal riot on January 6 at the Capitol, a number of companies promised suspend donations to the 147 Republicans who voted to undo President Biden’s election victory in 2020. However, many of those promises were summarily abandoned, according to The Los Angeles Times, who found that companies like Cigna, AT&T and Intel broke their promises several months later.
But Painter, Bush’s Chief White House Ethics Lawyer, told Salon that it was better for American businesses to do without the Republican Party.
“This thing continues to accelerate, but it can evolve into authoritarianism, where companies are used – with their money and so on – to put authoritarians in power,” he said. “A lot of companies supported the Republican Party enough in 2016. They didn’t like Trump, but they helped Trump get in through contributions to the Republican Party because they didn’t like Democrats.”
Left-wing commentators and law expressed extreme doubts about the potential passage of the “Mind Your Own Business” law. Matt Stoller, director of research at the American Economic Liberties Project, told Salon that the measure “was not going to pass and would likely be unconstitutional.”