ProfessorBainbridge.com

Should concealed carry laws trump employment-at-will? In short, no.

At Lexology, a recent post discussed a new Kentucky case dealing with the intersection of concealed carry laws and the employment at will doctrine:

At issue in Korb v. Voith Industrial Servs., Inc., 12CV0222 (W.D. Ky Nov. 28, 2012), was an employee who pulled out a handgun from his car to show a security guard the “sweet deal” he received for $150. The court did not describe a hostile employee. It seems he was simply engaging in his own version of show-and-tell. The employer was not amused and terminated the employee’s employment pursuant to a company policy prohibiting firearms on company property.

Important to the case for the court was Kentucky Revised Statute § 237.106(1), which provides:

No … employer, who is the owner, lessee, or occupant of real property shall prohibit any person who is legally entitled to possess a firearm from possessing a firearm, part of a firearm, ammunition, or ammunition component in a vehicle on the property.

These restrictions may seem familiar to Wisconsin employers who recently wrestled with the provisions of the concealed carry law. Wisconsin Statute §175.60(15m)(b) provides:

An employer may not prohibit a licensee or an out-of-state licensee, as a condition of employment, from carrying a concealed weapon, a particular type of concealed weapon, or ammunition or from storing a weapon, a particular type of weapon, or ammunition in the licensee’s or out-of-state licensee’s own motor vehicle, regardless of whether the motor vehicle is used in the course of employment or whether the motor vehicle is driven or parked on property used by the employer.

Both laws establish strong protections for employees to keep a firearm in their personal vehicle.

Although the Western District of Kentucky court repeatedly pointed out it felt the consequences were rather harsh, it found that the Kentucky law did not protect the employee. As noted by the court, if this was simply a matter of storing the gun in the vehicle, the employee would have been protected. But the employee did more. He took the gun out of its holster and handled it, and he did so for reasons that the statute did not otherwise protect. For the court, this was enough for the employer to lawfully discharge the employee without violating the law.

I'm mostly a neutral in the gun control wars, albeit rethinking that issue and lacking any real enthusiasm for constitutionalizing the issue, but I'm defintely not a fan of these laws. As I have explained at considerable length before (and please go read the post before commenting here), I firmly believe employment-at-will ought to trump concealed carry "rights." In brief, laws like those at issue in Kentucky and Wisconsin are part of the steady erosion of carving out one "little exception" to the at will doctrine after another that has essentially eviscerated that doctrine.

In any case, when last I visted this issue, my post moved one blogger to ask:

What if an employer fired employees for keeping “inflammatory” banners or signs concealed in their vehicles, for use at a rally after work?  Would Professor Bainbridge mount a fierce defense of the at-will employment doctrine in these circumstances?  Probably not.  After all, college professors are generally much fonder of talking and demonstrating than shooting.

Piffle. Of course I would raise a defense of the employment-at-will doctrine in those circumstances. First amendment free speech rights limit only the government. In my view, if a private employer wants to prohibit any form of worker speech -- inflammatory or otherwise -- on its own private property and enforce that prohibition by firing workers who violate it, the employer should have the right to do so. The economic and social values of employment at will and property rights makes this an easy case. (And, before you ask, I think labor laws authorizing union speech on employee property are a bad idea, as are laws forbidding private employers from banning religious speech or pretty much any other kind of speech.) I'm much fonder of private property and laissez-faire economic policy, after all, than either talking or shooting.

LIBOR, UBS, and the regulators

I'm working on an article on the need to reform the process by which the London Interbank Offering Rate (LIBOR) is set, so I've been following the news accounts of the LIBOR manipulation scandal closely for some time. Today's WSJ brings news of a major new development:

U.S., U.K. and Swiss authorities alleged a vast conspiracy led by UBS AG to rig interest rates tied to trillions of dollars in loans and other financial products, indicating the practice was far more pervasive than previously known.

UBS agreed to pay about $1.5 billion to settle charges against the Swiss bank, and a unit in Japan where much of the wrongdoing occurred pleaded guilty to criminal fraud. U.S. prosecutors also filed criminal conspiracy charges against two former UBS traders allegedly at the heart of the scheme.

Schumpeter notes an interesting aspect of the evidence released so far by the authorities:

For any who doubted whether there was honour among thieves, or indeed among investment bankers, solace may be found in the details of a settlement between UBS, a Swiss bank, and regulators around the world over a vast and troubling conspiracy by some of its employees to rig LIBOR and EURIBOR, key market interest rates. ...

... even in the midst of this wrongdoing there was evidence of a sense of honour, however misplaced. One banker at UBS, in asking a broker to help manipulate submissions, promised ample recompense:

"I will fucking do one humongous deal with you ... Like a 50, 000 buck deal, whatever. I need you to keep it as low as possible ... if you do that ... I’ll pay you, you know, 50,000 dollars, 100,000 dollars ... whatever you want ... I’m a man of my word."

Further hints emerge of the warped morality that was held by some UBS employees and their conspirators at brokers and rival banks. In one telling conversation an unnamed broker asks an employee at another bank to submit a false bid at the request of a UBS trader. Lest the good turn go unnoticed the broker reassures the banker that he will pass on word of the manipulation to UBS.

Broker B: “Yeah, he will know mate. Definitely, definitely, definitely”;
Panel Bank 1 submitter: “You know, scratch my back yeah an all”
Broker B: “Yeah oh definitely, yeah, play the rules.

All of which suggests an opening for a fascinating rethink of how social norms and behavioral biases can cause even bad actors to be trustworthy and honorable within the confines of their conspiracy (to the detriment of larger society). It suggests that we shouldn't expect such folks to behave as self-maximizing rational actors when confronted with problems like prisoners' dilemmas. But that's a question for another day.

More to the point, the tawdry business calls into question the actions and omissions of the key regulators who may have knowingly allowed LIBOR manipulation to occur. As I explain in my draft article:

As The Economist reported, however, there was a second—and potentially more troubling in the long term—reason Barclays misreported its LIBOR figures. During the financial crisis, both government and private sector actors viewed a high LIBOR submission as a sign of financial weakness on the part of the submitting bank.[1] Barclays admitted to having reduced the rates it submitted so that its submission fell within the mid-range of the panel banks.[2]  Internal Barclays documents showed that top Barclays managers had expressed concern throughout the financial crisis that Barclay’s relatively high LIBOR submissions were attracting negative media attention and raising questions about the bank’s creditworthiness.[3] This led to a directive being issued by a senior bank manager to Barclay’s LIBOR submitters that the bank “should not stick its head above the parapet.”[4]

Troublingly, Barclays “released evidence that can be interpreted as an implicit nod from the Bank of England (and Whitehall mandarins)” approving of the bank’s fudging its LIBOR submissions.[5] During the crisis, the U.K. government—like many others—was desperate “to bolster confidence in banks and keep credit flowing. The suspicion is that at least some banks were submitting low LIBOR quotes with tacit permission from their regulators.”[6]

The same may have been true of other key global regulators. In the US, for example, the New York Federal Reserve Bank—then run by Timothy Geithner, who subsequently served as Treasury Secretary in the first Obama administration—reportedly was aware as early as August 2007 of possible LIBOR manipulation but failed to aggressively respond.[7]

Today's WSJ editorial page takes up the cudgels on this very point:

... there's a good deal of ex post facto outrage over Libor, which has become the regulators' surrogate for all that was supposedly wrong in finance before the panic of 2008. Regulators who are now putting the hammer down knew about problems with Libor years ago but did little or nothing to stop any manipulation.

The Financial Times reported Wednesday that Treasury Secretary Tim Geithner knew about Libor manipulation in May 2008, even earlier than previously believed. (See our editorial, "Tim Geithner and Libor," July 21, 2012.) And yet he soft-pedaled his criticism of Libor while at the New York Federal Reserve. The New York Fed even used Libor as a benchmark throughout the worst of the crisis, in major contracts to which the U.S. government was party.

When regulators mess up, they don't get indicted. They get promoted.

Which is another very real scandal.

Green Bag Almanac & Reader Good Writing Honorees

Green Bag Almanac & Reader Good Writing Honorees

Once a year, the Green Bag’s impressive board of advisers for exemplary legal writing selects 20 or so works to honor with publication in the Green Bag Almanac & Reader. It is not an easy task, because there really is a great deal of good writing produced every year by lawyers and other people who write about the law. So, there is a burdensome but unavoidable process for making choices. Here are this year’s honorees. Congratulations to all.

via prawfsblawg.blogs.com

Click over to see the list of honorees.

Greg Mankiw's Blog: Asness on Buffett

Asness on Buffett

Warren may be a great investor, but he really doesn't cut it as a policy wonk.

via gregmankiw.blogspot.com

Lowell Milken Institute Law Teaching Fellowship

If you are looking for a teaching fellowship in corporate law, it would be hard to beat the Lowell Milken Institute Law Teaching Fellowship at UCLA. Now accepting applications.

via www.theconglomerate.org

What a nice thing for Gordon to say!

Do Corporations Think Short-Term? And, if so why? Also, who cares?

Harvard law prof Mark Roe ponders these questions.

The consequences of making Bork a verb

I think Andrew Sullivan's basically right about this:

There were many legitimate ways to discuss and criticize Bork's radical judicial philosophy, but the demagoguery deployed against him was a smear campaign of almost unprecedented ferocity. Ted Kennedy was among the crudest. (Wally Olson has a fascinating column on how Bork was also borked for not being a religious man.) The consequences are still with us, along with the deep polarization that event intensified in Washington. Reagan need not have nominated Bork, of course - and he deserves some of the blame for such a radical move. But the smear campaign from Bork's opponents dwarfed everything else, in my view. It helped create the poisonous atmosphere we now live in. Because it worked.

Or, as the WSJ put it:

Led by Ted Kennedy and Joe Biden at his slimiest in charge of the Judiciary Committee, Democrats and the left ran a smear campaign for the ages. ...

So nasty was the campaign against Bork that his name became a verb—to bork, as in to utterly trash someone's personal and professional reputation. For younger readers who wonder when U.S. politics took on their current poisonous character, the Bork fight was the turning point. Democrats cast the first smear.

The Wit and Wisdom of Robert Bork

The WSJ collects some of the great man's best writing.

Olson on Bork

A thoughtful and balanced appraisal of the late Robert Bork by the always perspicacious Walter Olson.

Shareholder empowerment and management earning manipulation

Interesting new paper. Lail, Bradley E., Martin, Gregory W. and Thomas, Wayne B., The Influence of Strong Shareholders on Earnings Management (December 5, 2012). Available at SSRN: http://ssrn.com/abstract=2185448

Abstract:  We examine whether shareholder rights impact the use of accruals to manage earnings. Presumably, shareholder rights aim to better align the actions of managers with the interests of shareholders; however, it is not clear whether such alignment mitigates or exacerbates managers’ propensity to manage earnings. Using a model recently developed by Dechow, Hutton, Kim and Sloan (2012), we document that when shareholder rights are stronger, managers are more likely to (1) manage earnings upward when meeting or slightly beating analyst expectations and (2) manage earnings downward when easily beating analyst expectations. Additional tests confirm that the propensity to manage accruals downward allows managers to reserve current accruals to meet expectations in future periods. Overall, the results are not consistent with the traditional expectation that shareholder rights serve a governance role by reducing discretionary reporting behavior. Given recent demands to enhance shareholder rights, our study highlights an interesting financial reporting consequence.

Speaking of Mike Koehler's FCPA Professor Blog

Here is  Mike Koehler's (of the FCPA Professor Blog) analysis of the recently issued government guidance on compliance with the Foreign Corrupt Practices Act:

This article is a critical analysis of the Foreign Corrupt Practices Act Guidance released by the Department of Justice and Securities and Exchange Commission. Issues discussed in the article include the following: (i) the enforcement agencies' motivations in issuing the Guidance and the fact that it should have been issued years ago; (ii) the utility of the Guidance from an access-of-information perspective and how the Guidance can be used as a measuring stick for future enforcement agency activity; (iii) how the Guidance is an advocacy piece and not a well-balanced portrayal of the FCPA as it is replete with selective information, half-truths, and, worse information that is demonstratively false; (iv) how, despite the Guidance, much about FCPA enforcement remains opaque; and (v) how, despite the Guidance, FCPA reform remains a viable issue.

A History of the Foreign Corrupt Practices Act

Here at PB.com, we have occasionally had occasion to mention the Foreign Corrupt Practices Act. To be truthful, our knowledge about the FCPA derives in no small amount from Mike Koehler's indispensable FCPA Professor Blog. So we were pleased to learn that Mike has now posted The Story of the Foreign Corrupt Practices Act:

In the mid-1970s, Congress journeyed into uncharted territory. After more than two years of investigation, deliberation, and consideration, what emerged in 1977 was the Foreign Corrupt Practices Act (FCPA), a pioneering statute and the first law in the world governing domestic business conduct with foreign government officials in foreign markets. This Article weaves together information and events scattered in the FCPA’s voluminous legislative record to tell the FCPA’s story through original voices of actual participants who shaped the law. As the FCPA approaches thirty-five years old, and as enforcement enters a new era, the FCPA’s story remains important and relevant to government agencies charged with enforcing the law, those subject to the law, and policy makers contemplating reform.

It's a balanced and accessible treatment of the FCPA's origins. I recommend it.

Position available at UCLAW as a Lowell Milken Institute Law Teaching Fellow

I've been asked to announce that:

• The Lowell Milken Institute for Business Law and Policy at UCLA School of Law is now accepting applications for the Lowell Milken Institute Law Teaching Fellowship.

• This fellowship is a full-time, year-round, one or two academic-year position (approximately July 2013 through June 2014 or June 2015).  The position involves law teaching, legal and policy research and writing, preparing to go on the law teaching market, and assisting with organizing projects such as conferences and workshops, and teaching.  No degree will be offered as part of the Fellowship program.

Eligibility

• Fellowship candidates must hold a JD degree from an ABA accredited law school and be committed to a career of law teaching and scholarship in the field of  business law and policy.  Applicants should have demonstrated an outstanding aptitude for independent legal research, preferably through research and/or writing as a law student or through exceptional legal experience after law school. Law Teaching Fellowship candidates must have strong academic records that will make them highly competitive for law teaching jobs.

Fellowship Requirements

The Fellowship program is year-round, over one or two academic years, during which time the Fellow will:

• complete at least one substantial scholarly publication and present the publication as a work-in-progress to the UCLA School of Law faculty;
• teach at least one class per academic year of the appointment;
• work closely with a faculty mentor in order to observe and participate in teaching, as well as to complete a publishable scholarly piece;
• assist the Institute’s Executive Director with other projects relating to the Institute’s work, including organizing conferences and other events,  research, publications, public education and outreach efforts;
• permit the Institute to publish any article(s) resulting from the Fellowship—as long as such publication will not interfere with the Fellow’s ability to publish such articles in a law journal; and 
• acknowledge the Institute’s assistance in any published work that is facilitated by the Fellowship.

Fellowship Benefits 

The unique features of this Fellowship include opportunities to:

• develop expertise in business law and public policy;
• work with a faculty mentor;
• develop expertise in business law teaching; 
• complete a published piece of research before entering the law teaching market; 
• obtain faculty recommendations and support for law teaching jobs;
• participate in the rich mixture of scholarly symposia, invited lectures, and conferences of the Lowell Milken Institute for Business Law and Policy; and
• participate in UCLA School of Law’s rich interdisciplinary scholarly symposia, lectures, and conferences.

Application Material and Deadlines

To apply for the 2013-2014 Lowell Milken Institute Law Teaching Fellowship, please submit the following materials by February 15, 2013:

• A cover letter summarizing your qualifications for the fellowship;
• A current resume, including a list of published works;
• An official law school transcript;
• Contact information for three references, including at least one from a law school professor familiar with your scholarly potential;
• A detailed research proposal, no longer than five single-spaced pages in length; and
• A description of teaching interests (course abstract and plan for class or seminar preferred) 

Interested candidates should submit materials as a single PDF or Word.doc file to [email protected].

Equal Opportunity Employer

The University of California is an affirmative action/equal opportunity employer, and seeks candidates committed to the highest standards of scholarship and professional activities and to a campus climate that supports equality and diversity. 

Zywicki on Skeel on Dodd-Frank

Todd Zywicki reviews David Skeel's book The New Financial Deal: Understanding the Dodd-Frank Act and Its (Unintended) Consequences at considerable length. Here's the teaser:

Those looking for a roadmap that lays out the basic ideas that animate Dodd-Frank and its key provisions should turn to David Skeel’s book, The New Financial Deal: Understanding the Dodd-Frank Act and Its (Unintended) Consequences.  Skeel summarizes Dodd-Frank in 200 readable pages that leads the reader through the basic provisions of the historic legislation and its consequences, both intended and unintended.

During the final debates over the passage of Dodd-Frank, Texas Republican CongressmanJeb Hensarling observed that “There are at least three unintended consequences on every page of this legislation.”  Quite a few for a bill that ran to 2,319 pages.  Skeel picks up on this theme and after starting by explaining the intended goals of Dodd-Frank and the ways in which the legislation attempts to implement them, concludes that in fact Dodd-Frank will have negative unintended consequences that will vastly exceed the beneficial intended effects of the legislation.

Go read the review, but be sure to buy the book. It's a great read.

Louis Latour Grand Cru Chateau Corton-Grancey (Corton) 2002

A pleasant red Burgundy, but not an especially profound one. Certainly not deserving of Grand Cru status, as it tastes more like a village wine. Still, it offered decent Pinot Noir fruit, good acidity, and some maturity markers. Cherries, raspberries, minerals, spoices (nutmeg?), leather. Probably at or just past its peak, so drink up. Grade: B-/B