Online

Rent-to-Own Unionism?

In Information and the Market for Union Representation, Professor Matthew Bodie provides an instructive framework for addressing information deficiencies in union elections. His consumer or “purchase of services” paradigm is apt and well illustrates the shortcomings of the more dominant approaches to elections. The extent to which this paradigm should drive the National Labor Relations Board’s (NLRB) regulation of union elections is less obvious. The best fit with Bodie’s consumer paradigm appears to be a system in which employees can easily designate a union as their representative, yet can just as easily get rid of the union. In other words, employees, like many other consumers, could purchase union services with the knowledge that they can easily change their mind later. It is not clear, however, whether the benefits associated with that model are worth its costs.

Bodie rightly decries the NLRB’s failure to ensure that employees have access to the information needed to make a fully informed decision whether to unionize. In particular, his criticism of the NLRB’s “laboratory conditions” and “political elections” models provides valuable insights into the nature of the union election process and raises important questions about the governance of elections. Yet his consumer paradigm is no panacea. For example, employees’ collective decision whether to unionize differs from a typical consumer decision, which generally does not face concerns from a group of dissenting members. Moreover, even if employees are acting as consumers when voting on union representation, there is a real danger of taking that model too far. The informational concerns that Bodie emphasizes may lead to changes with significant costs of their own. Thus, I am not convinced that the gains from a consumer approach to union elections are large enough to warrant the regulatory response it demands.

The Scope of Trademark Law In the Age of The Brand Persona

A description of a typical trademark infringement suit begins with the assumption that acquiring a desired product in the marketplace involves a search process, which incurs costs in terms of time spent, cognitive attention, and other resources. Consumers use trademarks as heuristics to reduce the amount of these costs. The trademark Levi’s, for example, allows a consumer to quickly find the jeans she knows fit her well without having to try on multiple pairs each time she goes to the department store. (This, of course, assumes that Levi Strauss & Company maintains the same design for its jeans over time, which trademark law does not obligate it to do.) Trademark law uses the concept of “consumer confusion” to describe a scenario in which the ability of a trademark to function as a shorthand is called into question because more than one producer is using the mark to brand its product. Thus, the theory goes, if we eliminate uses of trademarks that lead to “confusion” among consumers—the unauthorized Levi’s jeans, for example—we will stave off “search costs.”

Professor Mark McKenna’s article “A Consumer Decision-Making Theory of Trademark Law” brings welcome attention to what has become an increasingly unhelpful vocabulary. As he notes, the terms “confusion” and “search costs” are not always useful ways of characterizing the harms that result from trademark infringement. Consider, for example, the typical trademark infringement case, in which the defendant’s use of the plaintiff’s trademark misled the consumer into buying the impersonator’s product in lieu of the trademark holder’s product. Characterizing the defendant’s actions in this scenario as unfair competition is uncontroversial because the defendant took business away from the trademark owner through duplicity rather than through persuasion. But trademark law doesn’t actually tell a nuanced story about the nature of the consumer’s harm. Perhaps the consumer was ultimately pleased with her purchase, despite the fact that it was not what she initially intended to buy. Perhaps it is enough that she was provided with false information, regardless of her ultimate assessment of the product. Perhaps she will henceforth distrust the Levi’s trademark and instead try on several pairs of jeans to find the fit she likes or give up and turn to a different type of clothing altogether. Trademark law typically doesn’t delve too deeply into these questions, using “confusion” and “search costs” to characterize the various possibilities instead. A better sense of the harm that trademark law is supposed to remedy (and why it constitutes a harm) may not be crucial in a fake Levi’s scenario, but it becomes increasingly important the more the fact pattern moves away from the prototypical to more expansive theories of infringement.

The Impotence of Delaware’s Taxes: A Response to Barzuza’s Delaware’s Compensation

PERHAPS the most hackneyed and intractable debate in all of business law concerns the question of whether Delaware has incentives to provide an optimal corporate law, whatever that is. The world seems divided into the race-to-the-topers and the race-to-the-bottomers, with increasing amounts of scholarship piling up on both sides, none of which seems to be convincing the other side or moving policy forward in a meaningful way. When asked to respond to the latest salvo in this battle, I feared more of the same. But after reading Professor Michal Barzuza’s thought-provoking article, Delaware’s Compensation, I am convinced that there are still interesting things to be said about the optimality of the state-as-competitor-for-charters model of modern American corporate governance. I do not find Professor Barzuza’s proposal for making the franchise tax proportional to firm value convincing or necessarily desirable, but, because of the natural check provided by state competition, it is unlikely to do much harm.

©Virginia Law Review Association. All rights reserved.