American Business Law Journal

Publisher:: Wiley
Publication date:: 2021-02-01

ISBN:: 1744-1714

Issue Number

No. 60-4, December 2023

Latest documents

Privacy Self‐Management: A Strategy to Protect Worker Privacy from Excessive Employer Surveillance in Light of Scant Legal Protections
This article examines current and future trends in worker surveillance. It also examines the various, though minimal, legal protections workers have against extensive work‐related monitoring. With no meaningful legal protections against excessive work‐related surveillance, employees are arguably taking matters into their own hands by engaging in deviant behaviors that attempt to thwart surveillance efforts. Factoring in the ethical and managerial dimensions of a workforce under constant and excessive surveillance, this article examines a way forward for workers to engage in self‐managed privacy, potentially leading to a less intrusive, but still productive, work environment.
The Future of Work and U.S. Public Opinion on Noncompete Law: Evidence from a Conjoint Experiment
Although policymakers have recently shown a keen interest in noncompete reform, a gap exists in the literature concerning what the U.S. public's preferences are regarding noncompetes. Therefore, this article presents the empirical findings of a nationally‐representative survey of the American public on the noncompete law governing employees. Based on the results of a conjoint experiment within the survey, this article finds that the U.S public prefers that noncompetes be used to protect any types of confidential information, rather than simply customer lists or employee training investments. Additionally, the findings do not show clear support either for or against noncompete exemptions based on an employee's earnings level. However, this article finds that the U.S. public prefers a noncompete exemption for physicians, a shorter maximum duration for the noncompete period, and a legal mandate that departing employees subject to noncompetes receive some compensation from the employer during the noncompete period. Consequently, this article argues that employers should engage in greater self‐regulation if they would like to mitigate the risk not only that legislators will respond to public sentiment favoring more employee‐friendly policies by enacting a total or near‐total ban on noncompetes, but also that judges will find the noncompetes to be unreasonable.
Issue Information
Climate Change and a Just Transition to the Future of Work
Rapidly growing concerns about the adverse effects of climate change are prompting a re‐thinking of how companies view their strategies and operations and spurring legal and regulatory responses around the world. The overarching objective of these efforts is to facilitate and accelerate the transition to a more sustainable economy. The green transition will have substantial distributional and structural implications for workers and the workplace across companies and economic sectors. Indeed, the future of work will be significantly shaped by climate change. However, relatively scant scholarly attention has been devoted to the forward‐looking legal implications of climate change for work. Similarly, legal scholars writing on climate change have largely neglected the laws governing employment. This article seeks to help fill that gap. How can companies, workers, and society respond to the green transition in a manner that enables better jobs, a safe and stable workplace, and more resilient companies? To answer this question, this article draws on the theory of just transition, which is rooted in environmental justice and labor rights. We offer an interpretation and application of just transition that expands its scope to serve as a blueprint for ethical business conduct and legal reform to improve the world of work and the lives of workers.
When Federal Law Goes Unnoticed: Assessing the CISG's Applicability Across U.S. Courts Based on an Empirical Research of Decisions from 1988 to 2020
The United Nations Convention on Contracts for the International Sale of Goods (CISG) has reached the level of acceptance that it can be recognized as the face of international sales law. Over a century ago, the late Roscoe Pound drew attention to the dichotomy between the law as written and the law as experienced in practice. The law of the CISG “on the books” is the law of the United States. With the growth of international trade, one might expect its importance to grow in the realm of law “in action.” This article explores the CISG in action in U.S. courts during its almost four decades of being the law on the books in the United States. To this end, the authors built an original dataset based on their Westlaw search of all decisions mentioning the CISG across all U.S. federal and state courts from 1988 (when the CISG entered into force) through 2019. The dataset provides unprecedented insights into: (1) how parties raise the issue of the applicability of the CISG, (2) how courts have ruled on the Convention's applicability, and (3) the provisions of the Convention that appear most frequently in these disputes. This article empirically assesses, through logistic regressions, which factors are statistically significant for predicting if a court will apply (or decline to apply) the Convention to a disputed transaction. Finally, the article highlights many ways in which the law in action may not be as robust or comprehensive as it appears on the books.
Issue Information
The Patent Examiner Sweepstakes
This article presents evidence that patent value varies with random examiner assignment at the U.S. Patent Office. Prior work analyzed firm growth as a function of review by “easy” examiners who grant patents at a high rate. The current research looks past whether a patent is granted and instead focuses on how assignment to an “easy” or “hard” examiner influences the attributes of resultant patents. Focusing on their propensities to reject applications on novelty or obviousness grounds, analysis finds that patents issued by lenient examiners tend to be broader in scope, are more valuable to their owners, and elicit a larger stock market response when granted. Further analysis quantifies the level of variation (“noise”) among examiners. This inquiry finds that the noise level in issuing novelty rejections decreases with examiner experience, while variation among examiners issuing obviousness rejections actually increases with experience. A third line of investigation presents evidence that “stricter” examiners disproportionately reach the correct examination relative to more lenient counterparts. This conclusion is supported by “twin application” analysis comparing outcomes of related U.S. and European applications. Consistent with the literature using this method, the European Patent Office's outcome is considered the “gold standard” for examination, and thus, its decision to grant or deny is assumed correct.
Brute Force (Anti) Federalism
States are engaging in brute force (anti) federalism, where both sides of the political spectrum push agendas that extend beyond the Founder's early ideal of balanced federalism, using popular support and special interest groups' interests as their springboard. These trial‐and‐error tactics increase vertical and interstate horizontal frictions, create political and economic challenges for businesses, and increase American polarization. However, they also allow states the opportunity to force an increasingly stalemated federal government into action. This article introduces the concept of brute force (anti) federalism by first examining the evolution of modern federalism. It then offers a sampling of state brute force efforts, analyzes the effect of popular momentum and special interest groups on state political activity, advances broad‐based perspectives surrounding brute force (anti) federalism, and poses additional questions to be considered.
Control Expropriation Via Rights Offers
Rights offers are a relatively common capital‐raising method. In a rights offer, the company's existing shareholders are given the opportunity to purchase newly‐issued shares in proportion to the amount of shares they already own for a specific subscription price per share. Because all shareholders can participate in the issuance under the same terms, rights offers are often regarded as fair to all shareholders. However, this article demonstrates that rights offers do not always place shareholders on equal footing. In particular, this article shows that dominant, non‐controlling shareholders (“insiders”) can utilize a rights offer to expropriate control. By setting a deliberately high subscription price, insiders can deter other shareholders from buying into the offer. Insiders can then purchase a disproportionate amount of shares via the rights offer, thereby securing absolute control. Once in control, insiders will be in a position to extract value from the firm, and will be immune to future control challenges. These expected benefits of control make the high subscription price worth paying from insiders' perspective, so that the rights offer is effectively underpriced for insiders but overpriced for other shareholders. When a rights offer acts as a change‐of‐control tool, it should be governed by Delaware takeover law. Courts should closely scrutinize such issuances, and require boards to maximize the premium insiders pay for control. This article further suggests that stock exchanges adopt a mandatory price‐adjusting mechanism for rights offers, which will guarantee that the subscription price is lower than or equal to the underlying share's trading price.
Arbitration Effect
Arbitration is changing the United States justice system. Critics argue that arbitration leads to claim suppression. Proponents argue that, compared with courts, arbitration is cheaper and less formal. These claims have not been empirically tested. In particular, whether and how arbitration impacts individuals’ decision to sue remains an open inquiry. This article for the first time shows, in a series of experiments, the impact of arbitration agreements on individuals' decisions to sue. This article calls it the “arbitration effect.” First, we test whether the arbitration effect exists; that is, if arbitration agreements negatively impact individuals' decision to sue. Second, we experimentally test individuals' decisions to opt out of arbitration agreements. Lastly, we assess whether any type of information can “cure” the arbitration effect. The results establish that individuals are less likely to sue in arbitration as opposed to court, hence the arbitration effect. Such an effect, however, does not exist at the contracting stage, meaning that individuals do not shun arbitration when given the option. Further, none of the fundamental attributes of arbitration, as touted by the U.S. Supreme Court, nor win‐rates and class actions mitigate the arbitration effect. Equally, informational nudges do not reduce the effect, and individuals do not ascribe negative attributes to firms forcing mandatory arbitration. For decades, courts and lawmakers grappled with issues related to arbitration. The article provides much‐needed data on arbitration. Findings cast serious doubts on the ongoing efforts—market‐based, judicial, or regulatory—aiming to change the arbitration course.