Category: Law and Inequality

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The Hard Questions about Talent, Market Regulation, and the World of Work

Each in his own sharp and perceptive way, Brett Frischmann, Frank Pasquale and Matthew Bodie present what are probably the hardest questions that the field of human capital law must contemplate. Brett asks about a fuller alternative vision for line drawing between freedom and control. He further asks how we should strike the balance between regulatory responses and private efforts in encouraging more openness. Finally, he raises the inevitable question about the tradeoffs between nuanced, contextual standards (what, as Brett points out, I discuss as the Goldilocks problem) versus rigid absolute rules (a challenge that runs throughout IP debates and more broadly throughout law). Frank and Matt push me on the hardest problems for any politically charged debate: the distributive, including inadvertent and co-optive, effects of my vision. I am incredibly grateful to receive these hard questions even though I am sure I am yet to uncover fully satisfying responses. Brett writes that he wanted more when the book ended and yes, there will be more. For one, Brett wanted to hear more about the commons and talent pools. I have been invited to present a new paper, The New Cognitive Property in the Spring at a conference called Innovation Beyond IP at Yale and my plan is to write more about the many forms of knowledge that need to be nurtured, nourished, and set free in our markets.

Matt describes his forthcoming paper where he demonstrates that “employment” is reliant on our theory and idea of the firm: we have firms to facilitate joint production but we need to complicate our vision of what that joint production, including from a governance perspective, looks like. “Employers are people too” Matt reminds us, as he asks, “Do some of the restrictions we are talking about look less onerous if we think of employers as groups of people?” And my answer is yes, of course there is a lot of room for policy and contractual arrangements that prevent opportunism and protect investment: my arguments have never been of the anarchic flavor “let’s do away with all IP, duties of loyalty, and contractual restrictions”. Rather, as section 2 (chapters 3-8) of Talent Wants to Be Free is entitled we need to Choose Our Battles. The argument is nicely aligned with the way Peter Lee frames it: we have lots of forms of control, we have many tools, including positive tool, to create the right incentives, let us now understand how we’ve gotten out of balance, how we’ve developed an over-control mentality that uses legitimate concerns over initial investment and risks of opportunism and hold-up to allow almost any form of information and exchange to be restricted. So yes: we need certain forms of IP – we have patents, we have copyright, we have trademark. Each one of these bodies of law too needs to be examined in its scope and there is certainly some excess out there but in general: we know where we stand. But what about human capital beyond IP? And what about ownership over IP between employees and employers?

So yes, we need joint inventorship doctrines for sure when two inventors work together. But what about firm-employee doctrines? Do we need work-for-hire and hired-to-invent doctrines? Here we arrive to core questions about the differences between employment versus joint ventures or partnerships between people. And even here, the argument is that we continue to need during employment certain firm protections over ownership. But the reality is that so many highly inventive and developed countries, diverse as Finland, Sweden, Korea, Japan, Germany, and China, all have drawn more careful lines about what can fall under “service inventions” or inventions produced within a corporation. These countries have some requirement for fair compensation of the employee, some stake in inventions, rather than a carte blanche to everything produced within the contours of the firm. The key is a continuous notion of sharing, fairness and boundaries that we’ve lost sight of. Intense line-drawing as Brett would have it that is based on context and evidence, not on an outdated version of the meaning of free markets.

What about non-competes and trade secrets? Again, my argument is that these protections alternate, they should be discussed in relation to one another, and we need to understand their logic, goals, and the cost/benefit of each given that they exist in a spectrum. Non-competes is the harshest restriction: an absolute prohibition post-employment to continue in one’s professional path outside the corporation. This is unnecessary. The empirics are there to support their absolute ban rather than the fine dance that of balancing that is needed with some of the other protections. Sure it makes life momentarily easier for those who want to use non-competes, but over time, not only can we all live without that harsh tool, we will actually benefit from ceding that chemical weapon in the battle over brains and instead employ more conventional arms. And yet, even in California, this insight doesn’t and shouldn’t extend to partnerships. The California policy against non-competes is limited to the employment context. If two people, as in Matt’s hypo, are together forming a business, their joint property rights in that business suggest to us that allowing some form of a covenant not to compete will be justified. There will still be a cost to positive externalities but the difference between the two forms of relationships allow for absolute ban in one and a standard of reasonableness for the other. And yes, as Brett alludes to, the world is not black and white and we will have to tread carefully in our distinctions between employees and partners.

I completely agree with Matt and Frank that there are fundamental injustices created by our entire regime of work law. Talent Wants to Be Free takes those deep structures into account in developing the more immediate and positive vision for better innovation regimes and richer talent pools. Matt writes that a more radical alternative lies within Talent but “deserves more exegesis: namely, whether we should eliminate the concept of employment entirely.” What if people will always be independent contractors?, he asks. The reforms promoted in Talent Wants to Be Free, allowing more employees more control over their human capital, indeed bring these two categories – employees and independent contractors – closer together in some respects. But far more would be needed to shift our work relations to be more “democratic and egalitarian: a post-industrial Jeffersonian economy.” As both Frank and Matt show, in their own scholarship and in their provocative comments here, this will require us to rethink so much of the world we live in.

Frank Pasquale’s review is so rich that I hope he extends and publishes it as a full article. Frank says that “for every normative term that animates [Orly’s] analysis (labor mobility, freedom of contract, innovation, creative or constructive destruction) there is a shadow term (precarity, exploitation, disruption, waste) that goes unexplored.” I would agree that the background rules that define our labor market, at will employment, inequality, class and power relations, are not themselves the target of the book. They do however deeply inform my analysis. To me, the symmetry I draw between job insecurity and the need for job opportunity is not what Frank describes as a “comforting symmetry”. It is a call for the partial correction of an outrageous asymmetry. And yes, as I mentioned at the very beginning of the symposium, I hoped in writing the book to shift some of the debates about human capital from the stagnating repetition of arguments framed as business-labor which I view not only as paralyzing and strategically unwise but also as simply incorrect and distorting. There is so much more room for win-win than both businesses and labor seem to believe. On that level, I think Frank and I actually disagree about what we would define as abuse. I do in fact believe that many of us can passionately decide to give monetary gains in return for a job that provides intangible benefits of doing something we love to do. Is that always buying into the corporate fantasy? Is that always exploitation? Don’t all of us do that when we become scholars? Still, of course I agree with many of the concrete examples that Frank raises as exploitation and precarious work – he points to domestic workers, which is a subject I have written about in a few articles (which I just realized I should probably put on ssrn - Family Geographies: Global Care Chains, Transnational Parenthood, and New Legal Challenges in an Era of Labor Globalization, 5 CURRENT LEGAL ISSUES 383 (2002) and  Class and Care, 24 HARVARD WOMENS LAW JOURNAL 89 (2001)]. Frank describes a range of discontent in such celebrated workplaces as Silicon Valley giants, which I too am concerned with and have thought about how new hyped up forms of employment can become highly coercive. Freeing up more of our human capital is huge, but yes, I agree, it doesn’t solve all the problems of our world and by no means should my arguments about the California advantage in the region’s approach to human capital and knowledge flow be read as picturing everything and anything Californian as part of a romantic ideal.

 

Wall Street Journal on the Airline Seat Squeeze

Given the intense controversy raised by my last post on the topic, I thought I’d just bring up this diagnosis of the situation from Rupert Murdoch’s Wall Street Journal:

Airlines’ push to lure high-paying fliers with flatbed business seats and premium economy loungers is leaving economy-class passengers with less space. A push over the past decade by carriers to expand higher-fare sections has shrunk the area devoted to coach on many big jetliners. But airlines don’t want to drop passengers. So first airlines slimmed seats to add more rows.

An interesting idea was floated in the comments section of the piece: fliers could buy 2 seats (or a row of 3 seats for 2 people) to get a bit more space, without shelling out the enormous price of first-class. I imagine this is not controversial for the very wide flier, but has anyone who’s just over the 17-inch one-seat-width tried it? Given how one-sided airline ticket contracts are, it seems unlikely that one could simply assume the full use of two seats.

The commenter mentioned that he bought 2 seats for his father so he’d have his medical equipment next to him. Shouldn’t an airline be accommodating that as a matter of course anyway (if not to comply with the ADA, if only as an expression of some compassion toward the plight of the ill)?

Grassroots Campaigns to Untax the One Percent

RPMThis book, recently published by Oxford, ought to draw some comment this Fall. From its description:

Isaac Martin shows how protesters on behalf of the rich appropriated the tactics used by the Left-from the Populists and Progressives of the early twentieth century to the feminists and anti-war activists of the 1950s and 1960s. He explores why the wealthy sometimes cut secret back-room deals and at other times protest in the public square. He also explains why people who are not rich have so often rallied to their cause.

For anyone wanting to understand the anti-tax activists of today, including notable defenders of wealth inequality like the Koch brothers, the historical account in Rich People’s Movements is an essential guide.

As Ezra Klein notes, for many, “opposition to taxes has nothing to do with policy. It has nothing to do with the economy. It’s religion. It’s dogma. It’s identity.” Martin’s scholarly work may help explain this development.

Why Do Airlines Continue to Shrink Seats?

Airlines are shrinking economy class seats again, and they’ll achieve some efficiencies by doing so. But let’s not forget another key reason why the back of the plane becomes ever more like a cattleyard as the front transmogrifies into a luxury hotel:

It is not because of the few thousand francs which would have to be spent to put a roof over the third-class carriages or to upholster the third-class seats that some company or other has open carriages with wooden benches . . . . What the company is trying to do is to prevent the passengers who can pay the second-class fare from travelling third class; it hits the poor, not because it wants to hurt them, but to frighten the rich . . . . And it is again for the same reason that the companies, having proved almost cruel to third-class passengers and mean to the second-class ones, become lavish in dealing with first-class passengers. Having refused the poor what is necessary, they give the rich what is superfluous.

Something for first-class passengers to chew on as they retire to their aerial suites.

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Happy to be back!

Thanks to the Concurring Opinion folks for inviting me back!

It has been four years since I last guest-blogged.  Looking back at my archived posts, it feels a little as though time has stood still.  My final post in November of 2009 was entitled “Re-Igniting the Movement for Integration” alerting readers to a conference at Howard Law School that focused on the role of integration in k-12 schools.  In the post, I referenced the vexing questions surrounding integration, including the issue of when integration in a neighborhood is seen as cause for celebration and when it is decried as gentrification.   The issue of gentrification has only intensified in my corner of the world – Brooklyn – and was the subject of my most recent article, The Gentrification Trigger:  Autonomy, Mobility, and Affirmatively Furthering Fair Housing.   In the 20 years I have lived in Brooklyn, I have both participated in and winced  as neighborhoods that were abandoned in the 1960s are gradually flooded:  first with hipsters, then with the stroller set looking for three bedrooms and original moldings.  For those of you old enough to remember, the neighborhoods featured in Spike Lee’s “Do the Right Thing” are suddenly the places of choice for post-collegiate types from the suburbs.  Ideally, policy can be developed that encourages the influx of people with capital to neighborhoods that were once avoided – but also ensures that those who have been living and working in the neighborhoods don’t experience a sense of invasion or displacement.  And it will be crucial to address expressly the challenges that may arise with the changing racial and economic demographics.

I look forward to discussing this issue and others that arise this month.  And here’s hoping that the shut down ends quickly!

Disrupting “Disruption” Rhetoric

Why is the term “disruption” so popular nowadays? We rarely hear about a new social commitment to guarantee access to housing, health, or education. Instead, elite media features a parade of thinkers keen on “disrupting” old institutions. Freddie DeBoer has one perspective on their popularity:

Talk of social contracts is passé in an America obsessed with technocapitalist visions of a prosperous future. The yen for “disruption,” an empty term for empty minds in empty people, makes traditional obstacles like social contracts suspect or downright pernicious. This has led to an embrace of proceduralism by those true believers who want an app economy to be the engine of capitalism. And such people rule the world.

The “disruption” proposed by thought leaders also appeals to those who think of economics as the king of social science, and methodological individualism as the only ontological orientation to rigorous inquiry:

[I]ndividualistic predilections give a cohesiveness and homogeneity to … new ideas and inventions, actively constructing and shaping the digital environment from which [Silicon Valley thought leaders] claim to draw their inspiration. The insistence on “disrupting” our social and environmental lives; the idea that the solutions inspired by and enabled by the Internet mark a clean break from historical patterns, a never-before-seen opportunity – these mean that the only lessons to learn from history are those of previous technological disruptions. The view of society as an institution-free network of autonomous individuals practicing free exchange makes the social sciences, with the exception of economics, irrelevant. What’s left is engineering, neuroscience, an understanding of incentives (in the narrowly utilitarian sense): just right for those whose intellectual predispositions are to algorithms, design, and data structures.

The economy of internet intellectuals encourages endless reworking of algorithmic, design-, and data-based thinking. As Henry Farrell has observed, “While making your way up the hierarchy [of internet intellectuals], you are encouraged to buff the rough patches from your presentation again and again, sanding it down to a beautifully polished surface, which all too often does no more than reflect your audience’s preconceptions back at them.” The smiling faces at TED talks want to hear tried-and-true methods and 17-minute solutions. Woe to the skeptic who counsels there may not be any.

In the hands of a Cory Doctorow, we can see a disruption ethic of public spirited dissent. Unfortunately, the “disruptions” pursued by Silicon Valley giants (and their well-heeled consultants) often have little to do with challenging the biggest power centers in society. And why would they? As Farrell notes,
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What It Means to Talk about Reproductive Justice

In my first post, I offered a truncated discussion of reproductive justice (RJ) in which I strongly asserted that RJ is not solely, or even primarily, about abortion. I then went on to write a blog post about abortion, so I forgive you if you think that I was being deceptive. Perhaps in that post I could have directed you to check out the schedule for a conference that I’ve been organizing at my law school called, Beyond Roe: Reproductive Justice in a Changing World, which will take place on October 11. That schedule, while certainly not ignoring abortion, also considers issues of faith and reproduction, choices in childbirth, assisted reproduction and women’s equality, access to contraception and more, which illustrates my point about how wide a shadow the RJ umbrella casts. In this post, to further illustrate my point, I am going to write about examples of reproductive regulation, some more overt than others, that fall squarely within the rubric of RJ and offer some ideas about how a justice lens helps illuminate critical issues and lead us toward resolution.

As I wrote previously, reproductive justice (RJ) is about the right to have children, to not have children, and to parent children in safe and healthy environments, which means that its reach is expansive. That expansive reach is absolutely necessary in the world of reproductive hierarchies in which we all reside. I use the term reproductive hierarchies to reflect the reality that individual decisions about reproduction are subject to varying levels of approbation or disapproval as expressed through public policy and law. While our system creates benefits for many of those who procreate and finds ways to encourage their procreation and support their parenting, for instance by giving tax breaks for child care and education costs, there are many others whose choices about whether and how to bear and beget are less accepted. For instance, an undocumented immigrant who gives birth to a child on American soil may get accused by many of giving birth to a so-called “anchor baby”— a pejorative term used to refer to certain children born in the United States to non-citizen parents. Young women who give birth while still in high school or college are subject to various penalties, including being asked to leave their schools or being forced to leave because of a lack of support for young parents. There are those who strongly believe that people who are LGBT should not procreate or parent and many state laws either do not protect LGBT people from discrimination in access to the tools of assisted reproduction or deny stability to families created by same sex couples. Even in the absence of pregnancy, women are subject to strictures that can be significantly limiting economically and professionally based on concerns about risks to a potential fetus. Breastfeeding mothers who work outside of the home have to contend with employers who provide inadequate or no time or unacceptable space in which to pump breast milk during the day, thus making it harder or impossible for women to effectuate a choice to breastfeed. Individuals living with intellectual disabilities, especially women, are at risk for non-consensual sterilizations sometimes without adequate procedures in place to protect their reproductive interests.

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Martin Luther King, Labor Day, and Surveillance

Interesting to see how the three topics converge. First, an excerpt from King’s December 1961 speech to the AFL-CIO Convention:

Less than a century ago, the laborer had no rights, little or no respect, and led a life that was socially submerged and barren. . . . American industry organized misery into sweatshops and proclaimed the right of capital to act without restraints and without conscience. . . . The children of workers had no childhood and no future. They, too, worked for pennies an hour and by the time they reached their teens they were worn-out old men, devoid of spirit, devoid of hope and devoid of self-respect.

Second, from Tom Geoghegan’s analysis of King as a labor leader: “It is said that just after this speech, J. Edgar Hoover was more determined to wiretap King.”

Treating someone working for the betterment of the many, as an enemy of the state, is a core harm of politicized surveillance.

364 CEO Days

SaluteLaborLynn Parramore observes that exploitative practices do little to help US productivity, or even the position of firms engaging in them:

[America's] cult of endless toil doesn’t really help the bottom line. Study after study shows that overworking reduces productivity. On the other hand, performance increases after a vacation, and workers come back with restored energy and focus. The longer the vacation, the more relaxed and energized people feel upon returning to the office. Economic crises give austerity-minded politicians excuses to talk of decreasing time off, increasing the retirement age and cutting into social insurance programs and safety nets that were supposed to allow us a fate better than working until we drop.

That doesn’t seem very economically rational: why not respect Brandeis’s basic insight that “I can get 12 months of work done in 11 months, but not in 12″? One clue lies in an observation from Polish economist Michal Kalecki:
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The “Markets” for Top “Talent”

IncomeGrowthThe stories we tell ourselves about inequality matter. As incomes of the top 0.1% and top 0.01% grow ever more stratospheric, “low wage workers are paid less now than they were from the 1950s-1970s.” Is this just, as Steve Schwartzman suggests, the natural consequence of globalization? Tim Harford suggested as much in the FT last week:

The uncomfortable truth is that market forces – that is, the result of freely agreed contracts – are probably behind much of the rise in inequality. Globalisation and technological change favour the highly skilled. . . . [A]t the very top, winner-take-all markets are emerging, where the best or luckiest entrepreneurs, fund managers, authors or athletes hoover up most of the gains.

The most important word in that paragraph is “luckiest.” What deserves comment is Harford’s argument that “freely agreed contracts” are deciding who is “hoovering up” the most. He elaborates a bit later:
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