Not Much Law: Occupy from the Social Perspective

I would write about corporate  law if it were as interesting as what is happening under my window in Dewey Square.

Yesterday the Occupy people were to move a winterized tent into the compound.  The Boston police announced they would resist this effort as no “construction material” will be allowed on site.  At noon there was a crowd 25 floors below me, and a couple of police cars (normally well out of view) but no sirens or signs of a scuffle.  While you could not tell much from up here, the news reports this morning said that the police politely turned away a fireproof tent that was procured in response to the city’s stated fear that the encampment was a fire hazard.

All this plays out against the backdrop of an already argued legal case, taken under advisement by a judge, wherein the Occupy people sought to enjoin their removal by the city.  The city has assured Occupy that while the city lacks present intent to clean our the compound (as has been done in many other places), they must reserve the right to react to prevent breach of public order or lack of sanitation or creation of public nuisance.  Boston’s blue collar mayor has been surprisingly supportive of free speech rights in this case, perhaps reflecting the demographics of his electorate (Monday’s Globe reported that poorer people and Obama supporters identify with the Occupy folks, not a surprising conclusion).

But is it in fact true that there is danger in those tents?  Or are they just the flimsly housing of the disadvantaged who are speaking their minds under Constitutional protection?

According to the head of one social service agency (with whom I spoke yesterday) whose mission is to protect runaway teens and young people, there is in fact danger lurking in the tents.  He describes a community run by student anarchists, and occupied by runaways and street people; the philosophical founders of the Boston Occupy are “back at Harvard and Tufts writing their term papers.”  He describes a community in which drugs of all sorts are freely available, where security is provided by the homeless, where runaway kids show up for the glamor and have 48 hours to be extracted or else get sucked into the sexual underground.

Every view of everything is determined by where you stand.  It is not surprising, although it is also true, that many business people I speak with find Occupy to be without focus or program; I think that that does not matter, Occupy is (or should be)  witness to a problem, they are not likely to have the answers no one else seems to have.  It is equally not surprising that social service professionals have such a frightening view of Occupy Boston — but to what extent is that view accurate, and to what extent is it just the projection of implicit judgment bent by the prism of where one is standing?

I don’t know, but I don’t like people who are not bankers or lawyers criticising Occupy.  It erodes the warm feeling I have held that democracy is being acted out from the grass roots upwards.  The idea that people in the tents are speaking truth to power is not strengthened by the picture of runaway teens getting sucked up into bad stuff.  I don’t like my idealized rush to embrace protest, where there is clearly so much to protest and so few ways to effect change, being sidetracked by tawdry revelations, particularly when they seem like they may be accurate.  It would be a shame if Occupy were to fall of its own weight and its failure to live up to my self-constructed image of what it might have been.

Marketing the Occupy Movement

Yesterday I saw a jacket lettered on the back “Occupy Boston.”  Although the jacket was not crisp-looking and might even be viewed as ratty, it suggests some steps for the commercialization of this social protest movement.

Normally, causes advertise themselves by posters, T-shirts and buttons.  Years after a given protest movement, the posters have been thrown away, the T-shirts are the faded tops worn at the beach or to wash the car, and the buttons are either in the trash or in the top drawer, awaiting the passage of a few decades before finding their way into memorabilia shops.

But jackets are something else.  They are most typically for sports teams, sometimes for cities or whole countries, sometimes for a club or social group; but you don’t typically see them for social protest movements.  How often have you seen jackets that proclaim “Vets against the War” or “Socialists of America” or “Mothers for Bank Regulation”?  (I exclude and refuse to discuss the seemingly bizarre trend of jackets that say on the back “Police” or “Sheriff” or “FBI” although they always have worried me on grounds of impersonation of a peace officer.)

Now that we have seen the cutting edge, the potential here, and noting that Occupy is going to need cash for food, winter warmth and defense lawyers, let us offer some marketing advice to our brothers and sisters on the barricade:

SHOT GLASSES:  There is a smart market from collectors of souvenir shot glasses.  Minimal art work is required. Glass is cheap to buy and as a single item (collectors want examples, not whole sets) a quick mover at a good price point.  (Ditto souvenir spoons, and with those comes the opportunity for a souvenir master spoon rack with an overall “Occupy” motif and notches for spoons from various cities.)

SOUVENIR PLATES: These usually come in sets of 8 or 12, and are suitable for wall mounting in middle class dining rooms.  Scenes from different cities, perhaps Currier-and-Ives-style hand-colored scenes of police clearing a particular public space, can also offer job opportunities for Occupy graduates seeking to reenter the job market, although the hand coloring does require a steady hand.

T-SHIRTS: Always a favorite, and permits a wide variety of content, including the ever-popular mild obscenity.  They will need to attend to stocking all sizes, of course.

GAME-USED MEMORABILIA: Sports teams sell used balls and uniforms, home plates, basketball nets, football helmets, pucks.  Occupy can cut up older site-used tents, bed rolls and picket signs.  Effective marketing requires some organization to authenticate provenance, yet another potential profit center.

The point for me is this: until now, Occupy has been accused of being unfocused and without program or purpose.  Now we can win over the critical elements of the business community which have expressed these negative views by making the Occupy movement its own business;  Chambers of Commerce will demand installation of Occupy communities in their own cities, thus also solving our unemployment problem.

Soon, Occupy people will become part of the 1%!  We call this further proof that America truly is the land of economic opportunity.

Papelbon Leaves Red Sox for Money! Imagine….

Back from three days in a cabin in the mountains with almost no contact anywhere, hiking with deer and porcupines and nameless large poop that made us think “bear,” I return to learn, indirectly, that “Papelbum” is gone. For some reason – perhaps because he is a moron? – I am neither surprised nor unhappy yet, if you compare his career to many other “closers” who had no staying power, he has been net super for us and will I agree likely continue. In  any event we will not do better.

The team may not believe in the concept of dedicated “closers,” but each game gets closed by someone so all we can really say is, either the team gets 9-inning starters (we cannot even get enough 5-inning starters!) or they will employ closers,  and if management wants to call them something else I guess owning a billion dollar business gives you a lock on lots of things including nomenclature.

The team has announced flat ticket prices.  It is hard to envision the team’s composition at this point, but I think spectacular moves will be forthcoming.  They did it each of the last few years when things did not look depressing, as they do now.  We have outfield holes, starter holes, righty holes, and mojo holes.  Holy moly, ain’t we got holes.  They will do something before they want our money, and it is likely to be flashy even if unwise because they really do not want to drop down into their waiting list for season seats and ruin the attendance karma which, for management, is much better than winning ballgames because it generates cash;  the last time I rang up a bill at Whole Foods and told the cashier we were even because the Sox won last night they called the cops on me….

My 8 year old gasped, when I told him, “You mean he left the team???!????”   So really truly sad, I could cry.  He LEFT the team, he abandoned us when we put so much trust in him.  Loyalty to the team is the myth we give the kids and still cannot rid ourselves of, after all these years and all these lessons. “ Yes,”  I replied, trying brutal frankness and watching an 8 year old both age and acquire cursed wisdom at the same time, “he left for money.  Remember they only do this for the money.”  Matthew looked glum; he should look glum.  Loss of innocence always sucks.

39 Again

My father lived to almost 101; as for birthdays, he started counting at 39.  So for me today, November 10, I am by my dad’s count 39 years old for the 31st time.  It of course feels no different from yesterday, and we cannot presume to compare it to tomorrow.

When I was 64 I declared an end to birthday celebrations; 65 sounded old, and I wanted no part of it.  Nor did the idea match my disposition or ambitions.  I was given a rousing 64th party; a cover band sang the Beatle’s song asking “will you still love me when I’m 64,”  people dressed up as various Beatles or their lyrics, people came from long distances, and that is my last party.  All is good.

My assistant today gave me, for my birthday, a cup of Dunkin Donuts coffee, cream no sugar, and I know she wishes me well because it is a medium, not just a small.  My birthday dinner last night consisted solely of four scoops of ice cream topped with dark hot fudge; if arteries have not killed me yet, one more mega-sundae ain’t gonna do it.

I detest people who pontificate on birthdays about what they have learned, or about the secret of life.  I am happy to awake on the right side of the grass each morning.  When that doesn’t happen, I will try to send word, but we all should be prepared for the possibility that that blog post will not get published.  So save this blog post, just in case….

“GOTCHA”: Social Media and the Labor Laws

Employees sometimes post unfavorable comments about their bosses or companies on Facebook or other social media sites.  Employers sometimes don’t take too kindly to such criticism and may take adverse job actions in response.  So far so good.

But what happens when social media criticism reflects joint action by a group of employees?  Let’s say one employee says to a group of employee friends that the company is stupid and unethical and underpays and its president is creepy and someone ought to do something about it?  And one of the group posts a comment to that effect?

Enter the National Labor Relations Board, which you may recall is charged with protecting group employee action from retaliation by employers.    This post I described is “protected concerted action” by employees and legally cannot result in retaliation.  Further, employer policies about social media cannot prohibit a wide range of posts, including the oft-banned comment that may damage the reputation or goodwill of the employer.

Interestingly, over-the-top language and personal affronts don’t change the result; in one case a post described a boss as a “scumbag” and the NLRB did not care — in the heat of labor disputes nasty things are said all the time.

Since NLRB rules in this area apply to all employers and not just those companies with a union presence, it is likely that management and even in-house counsel may lack sensitivity to these issues in both HR management and in drafting policies.  This area is a “gotcha” and one of those unfortunate ones where caerful study of the NLRB report, or actually undertaking the distasteful step of hiring counsel, may be indicated.

“Occupy” and the Underlying Economics

I don’t want to re-engage here the by now much-overworked debate as to whether there is a coherent message or an identifiable plan emerging from the “occupy” movements, or whether those movements will survive the winter snows of Boston or the police actions that will over time no doubt increase.

I do want to just record, without detailed citation (this data is easily retrieved from the internet as reported by the mainstream press), the highpoints, or rather lowpoints, of our current economic situation.  I do submit that one underlying driver of the “occupy” movement is growing awareness of great economic distress.

We have learned that poverty is growing in the US.  We have learned that the number of people who fall into the category of gross poverty (less than 50% of the poverty line earnings) has doubled over recent years.  We have learned that young people are disproportionately unemployed.  We have learned that undereducated people are losing ground relative to the educated.  We have learned (November 9 Boston Globe) that there are Boston neighborhoods with over 40% of the children below the poverty line, most in single parent homes and with 20% of those parents without a high school degree.  We have learned that on an international scale, our economic and social well-being, once pre-eminent, has fallen mightily; the Times reported the Bertelsmann Siftung survey indicating that our child poverty and senior citizen poverty rates place us in company with Grece, Chile, Turkey, Mexico and other unenviable peers,  while our “overall social justice rating” ranks us below such as South Korea, Portugal, Slovakia, Ireland, Hungary, Poland and other countries which are instinctively dismissed by Americans as not in our league.

While it is unlikely that cutting the economic legs off the wealthy will achieve anything useful in the long run (the money to be redistributed is a pittance compared to the problem), we should understand that that reaction (tax the rich) is one of frustration in light of the economic realities, and the loss of faith by the folks at the bottom that they have a reasonable shot at rising upwards.  And the internationalization of business and its growing tax-efficiencies are in fact a significant issue in our ability to afford the legitimate demands that an enlightened society puts upon its government; today’s signs in Dewey Square don’t so much want to tax people who make a lot of money, but rather to tax the entities with high untaxed profits even after the compensation of our highest earners.

It is likewise no doubt frustrating for people who work hard for their money, and perform difficult tasks, to be told they are overpaid.  The point is they are not so much overpaid as the other guys are underpaid or unpaid.  But another point is that those who work and earn and get angry at Occupy had best understand their own risk profile: regardless of who is “right” about many of these issues, the perception of these issues, if held by a large enough part of the population over a long enough period of time, will be viewed as unfair, will certainly be uncharitable in human terms, and will likely destabilize the society which is the assumed underpinning of the safe enjoyment of the wealth being accumulated by all this hard labor.

Class tension interferes with what we really need to get done: create confidence in the society so as to drive funding of innovation; allow confidence in other people so as to loosen immigration in areas that actually can expand the economy; create predictibility in our politics and public policies;  find some way to mediate the power of wealth which is driving public policy into areas of self-interest measured in the narrowest sense.

We are all in this together.  Driving to Weston doesn’t distance us from the tents in Dewey Square.  If the tents disappear from Dewey Square, the people in them, and the problems they reflect, do not disappear.  These people are like Whitman’s leaves of grass; they are ever under our feet.  And grass can be slippery for those who stride across it without heed for their footing.

Seize the Day–and the Computer

On November 3, 2010 a US citizen returning to Cambridge, MA from a trip to Mexico was questioned at the airport by the Department of Homeland Security.  It is not clear where Homeland Security gets its lists of suspicious folks but I thought they were to protect us from terrorists.

Seems this citizen was involved with a non-profit supporting Bradley Manning, the soldier accused of leaking classfied documents to WikiLeaks.

Our citizen was released but DHS retained his laptop, USB drive and camera for almost two months.  Enter the ACLU of Massachusetts, which brought suit on free speech and unlawful search grounds; there was nothing illegal about our citizen’s support for the non-profit and thus no seeming basis, under traditional legal analysis, for searching or seizing any property.

This month ACLU lawyers go to court to challenge the oppressive impact of hassling travelers whose sole sin appears to be the exercise of First Amendment rights.  We all should be following the case ofHouse v. Napolitano, which will be argued this month in US District Court in Massachusetts.

The incursions on liberty are growing yet viewed singly and at first blush may appear subtle.  They also can be dismissed as reflecting a paranoid fear of a government we all know in fact is benign.  But those who know of McCarthy, of J. Edgar Hoover, and of the corruptive nature of combining excess zeal with unbridled power need to react against these incursions.  Today the government can easily know where we are physically, and what we say over the internet and on social media (which are the modalities of communication most used in our society). The assumption that, if our government is doing it then, it is intelligently and fairly performed flies in the face of experience and of the societal judgment of liberal and conservative alike; this is an area where all should agree that big government involvement is thought unwise by all political viewpoints.

Do Directors Matter?

The National Association of Corporate Directors reports the median pay of a Fortune 200 director at $228,058, a tidy sum although not nearly enough if a derivative suit is filed against the board.  NACD does not report on any relationship between compensation and frequency of litigation.

Commentary on the survey attempts to make the point that weak boards of directors tend to lead to corporate catastrophe.  This surely is a conclusion that seems intuitive, but is it correct?

Fortune, as reported by CNN Money on line, collects anecdotal situations wherein problem boards ended up with big corporate problems to boot: News Corp, BP, etc.  These boards seem to lack truly independent directors (nothwitstanding regulatory requirements for public companies wherein carefully defined levels of independence are required to sit on audit and comp committees), coupled with long tenures, advanced age, lack of women or minorities, and with personal ties to top executives (which latter point is just another way of saying they lack independence).

Several issues suggest themselves.  Aside from linking some companies suffering catastrophe with a lack of strong directorship, the data does not seem to reach the question of whether poorly directed companies have a higher catastrophe RATE.  Many poorly directed companies dodge the bullet plenty.  Many well directed companies suffer major set-backs.

It is important not to use only hindsight.  It is easy, after a debacle, to go back and note that the board lacked certain attributes.  But if you did an audit of all companies, which would include the damned and the blessed, would failure follow the weakest board?

How many of us have seen very well run boards nonetheless get surprised by disaster?  The legal standard for boards is not to meddle in operations; boards do not have front-line responsibilities.  If there is risk identified, the board is supposed to inquire that the risk is being addressed, not itself seize control of a company at the operational level.  A board has a duty of care that includes using normally prudent practices to identify and cause to be addressed enterprise risk.  The management has the operational burden.

So perhaps the ultimate stopping place of the buck, at the board level, is the selection of the principal officers who DO have front line responsibility for execution?  And perhaps a non-independent board ultimately does tend to rule over a company that is disaster-prone because such a board elects cronies, retains its own membership too long, and becomes used to the nice dinners and dulled to their duties?

The last decade of corporate grief seems to this observer, indeed again anecdotally, to be spread widely across the spectrum of well-directed, ill-directed and non-directed businesses; if anyone out there has data that is more tightly ratcheted on a statistical demonstration of the avoidance of catastrophe (not the level of earnings, just the absence of disaster) in the presence of a younger and more rigidly “independent” directorship, I would be interested in hearing about it.

We strive for good directors and thus are invested in seeing better performance from boards which meet our preconceptions.  And surely independence on boards is a defense to many shareholder suits (put another way, woe be to the defendant director who can be painted in a lawsuit as a “crony” of the controlling person(s)),

And I haven’t even gotten to the implicit age-ism in the equating of older directors with lousy boards….

Companies Should not Whistle at Whistleblowers

Public companies are required by Sarbanes Oxley to avoid adverse employment action against employees who in good faith suggest that certain laws are being violated by their employer.  The enforcement of anti-retaliation protections rests in a Review Board of the United States Department of Labor (and not, as many might assume, with the SEC).  The idea is that the DOL has experience under other laws in protecting against employer retaliation.

In September, the Review Board held (Menendez v. Halliburton) that an employer may be held to have taken unlawful retaliatory action simply by divulging the name of a whistleblower to that person’s fellow employees.  Seems the employees shunned Menendez after he blew the whistle, indicating that workers don’t like a rat even while the Congress and SEC are attempting to promote such actions.  (Indeed, the 2010 Dodd Frank Act provides cash bounties to whistleblowing employees in many circumstances.)

While it seems about four centuries since Halliburton got any piece of good publicity, the release of an anonymous whistleblower’s name clearly is not what that person wanted to have happen, and it is hard to imagine a corporate motive  for that name release except an effort to discourage the underlying behavior.  In that light, the Review Board had little choice but to condemn the practice in protection of the regulatory reporting scheme.

In an interesting sidelight, the CPAs doing the company audit declined to speak with the whistleblower until his allegations were resolved, an action that might well endear the accountants to management but is hard to parse with the idea that the CPAs need to track down the accounting truths,  at least when placed on inquiry notice.

Decline and Fall

Today I write about the breakdown of the American social compact.

The Congress cannot engage in dialog on important issues.  We do not speak to each other, we do not listen.  Republicans stonewall.  The President campaigns rather than inspires a dialog.

A candidate for school committee in Newton campaigns on the platform of building a bridge between the schools and the 80% without children in the schools.  This in a city noted for its educational system, and where once all taxpayers understood investment in the future of the children.

Commentators on the Occupy movement criticize the participants because they do not have a program, as if having a solution to incredibly complex problems is easy to articulate in a 140 character sound bite digestible by our slogan-ized polity.  Is not the message clear, that many of our fellow citizens feel grossly disenfranchised and mistreated in our society in a variety of ways?  Even suburban populations are forming support groups for the Boston “Occupy” movement.

Is it not clear that movements such as this always attract marginal issues, but that we must strip out the clutter and understand the fundamentals, rather than marginalizing the fundamental content?

The Boston Globe reports a heightened concentration of US wealth over the last three decades, and the Globe may be the last publication on earth to discover this reality.  This factual driver of “Occupy” seems to be missed by some of “the one percent,” and the “movement” seems unable to communicate the core issue to many who clearly are not hearing it.

What do non-Americans think of our political state?   The other day in our offices, which overlook Dewey Square and Boston’s tent city, a dozen Russian entrepreneurs attended a business conference to discuss their companies.  One or two commented on the protesters, but most were politely silent. The business of business is business, not politics.

This convenient dichotomy is perhaps learned in countries where growing economic opportunity must co-exist without political freedom;  but is this a dichotomy (business as divorced from public debate of politics) that Americans living under our Constitution should embrace?  Aside from a mixture of embarrassment and distaste, what should the 1%-ers, looking down on the tents, be thinking?  How many go down to the streets and talk with the people?  Not many, to my experience.

Why is it repellent when people exercise the rights they have under our Constitution?  Seems as if many folks in the office towers love the geographic or non-specific idea of America, but not the actual exercise of American rights which are part of our social compact: free speech, free assembly, economic opportunity in fact, and open communication leading to jointly reached and mediated solutions.

For those people who think that John Locke is a bolt for your toilet door, I suggest an elevator down to the street and a modest exercise in the way in which American society ought to operate: talk with, not over your fellow citizens. THAT is the social compact we once thought we had, and the one we need to redeem.

Yesterday, one of my partners forwarded to me an on-line article complaining that the Occupy people smell bad.  This is what purports to pass for political analysis today.  I’ll bet George Washington’s armpits stank at Valley Forge; let’s give the country back to the British, seemingly smelly people don’t deserve our attention.  Although I would bet my bankbook that the author of the smell test never visited the tents and, well, sniffed around.

And, returning to the young Russian entrepreneurs for a moment, as one of them said: “The people downstairs just want to be treated as people.”  If a twenty-something Russian engineer with marginal English and no tradition of free politics can understand what “Occupy” is all about, why do so many Americans have a problem doing so?  Maybe we have stopped listening….