In tro duc tion: The Mean ing of Cor po rate So cial Re spon si bil ity

  

WHAT SO CIAL RE SPON SI BIL ITY FOR THE

COR PO RA TION?

A RE PORT ON THE UNITED STATES

  

Risa L. Lieberwitz

As so ci ate Pro fes sor

Cor nell Uni ver sity

  

School of In dus trial & La bor Re la tions

  In tro duc tion: The Mean ing of Cor po rate So cial Re spon si bil ity

  The ques tions posed for the na tional re port ers for this In ter na tional Sem i nar dem on strate the wide range of is sues that can be in cluded as part of an anal y sis of cor po rate so cial re spon si bil ity. Even lim it ing the dis cus sion of cor po rate so cial re spon si bil ity to em ploy ment is sues cov ers a broad scope, rep re sented by the three gen eral ques tions posed for this Sem i nar: (1) hir ing pol icy; (2) per son nel man age ment pol icy; and so cial pro tec tion pol icy. Be fore en ter ing this dis cus sion of the three ques - tions, though, it may be use ful to step back to an even broader ques tion of the mean ing of the term, “cor po rate so cial re spon si bil ity” (CSR). The term, it self, car ries an un der ly ing as sump tion of the le - git i macy of a par tic u lar eco nomic sys tem and its cen tral ac tors; that is, cor po ra tions are cen tral, le - git i mate, and func tional ac tors in so cial re la tions within a cap i tal ist eco nomic struc ture. The con cept of CSR does not ques tion the ex is tence of cor po ra tions and their role in main tain ing a sys tem of pri - vate own er ship and con trol over cap i tal. The fun da men tal goal of cap i tal ism and cor po ra tions to max i mize mar ket con trol and prof its re mains in tact. Pol i cies fa vor ing CSR, rather, seek to shape the con duct of cor po ra tions to in crease so cially re spon si ble cor po rate prac tices, but do not chal lenge the le git i macy of cor po rate power. Such so cial re spon si bil ity may range from curb ing hu man rights vi o - la tions by cor po ra tions, such as vi o lence against un ion or ga niz ers, to in flu enc ing cor po ra tions to pro vide de cent wages to em ploy ees, to pres sur ing cor po ra tions to carry out busi ness with out harm - ing the en vi ron ment. The re cent at ten tion to CSR may be un der stood as an ex pres sion of con cern over the re duced ef fec tive ness of in di vid ual na tions to main tain the in teg rity of so cial wel fare pol icy within cur rent con di tions of global power ex er cised by trans na tional cor po ra tions (TNC).

  Al though they do not chal lenge the ba sic power ar range ments of cap i tal ism, con cepts of CSR do pres ent im por tant is sues of pub lic pol icy within a cap i tal ist so ci ety, in clud ing the scope and con - tent of CSR, as well as the means to im ple ment CSR pol i cies and prac tices. The ques tions posed to the re port ers in this Sem i nar are in tro duced with the broad query of whether CSR should be un der - stood as self-de fined and vol un tarily as sumed by the cor po ra tion or whether CSR should re fer to a sys tem of cor po rate reg u la tion by the state, im posed through leg is la tion and ju di cial or ders. The choice be tween these two ap proaches is an es sen tial one that per me ates – ei ther ex plic itly or im plic - itly – any dis cus sion of CSR, pre sent ing dif fer ing ideo log i cal vi sions of the cor po ra tion and its so - cial role.

  The view of CSR as a vol un tarily as sumed ob li ga tion is based on a view that the cor po ra tion will prop erly take ac tions con sis tent with its role in so ci ety. In one ver sion of this ap proach, the “stan dard share holder-ori ented model,” which has been la beled as “the pre dom i nant view” among U.S. cor po rate le gal the o rists, the so cial wel fare is pro moted through the cor po ra tion’s ac tions that ₁ are con sis tent with its fi du ciary duty to max i mize share holder wealth. While the cor po ra tion is bound to com ply with ex ist ing le gal reg u la tions, vol un tary CSR mea sures will also be taken in re - sponse to mar ket in cen tives that pro mote cor po rate in ter ests, de fined in terms of the share hold ers’ in ter ests in prof its. Thus, the mar ket may strengthen the cor po ra tion’s mo ti va tion to adopt so cially re spon si ble pol i cies, given the im por tance of cor po rate pub lic im age to mar ket suc cess. Ac tions by un ions and nongovernmental or ga ni za tions (NGOs) will bring is sues of CSR into the pub lic do - main. To gether with the cor po ra tion’s de sire to ful fill its fi du ciary ob li ga tions to its share hold ers, such pres sure tac tics will mo ti vate the cor po ra tion to vol un tarily adopt and self-en force so cially re - spon si ble pol i cies, in clud ing mea sures such as mon i tor ing hir ing prac tices and work ing con di tions.

  An other more “pro gres sive” ver sion of the con cept of vol un tary CSR broad ens the def i ni tion of the cor po ra tion’s fi du ciary duty to in clude other “stake holders,” such as the em ploy ees and the com mu nity, in ad di tion to the share hold ers. Un der this model, cor po rate di rec tors would be le gally au tho rized to con sider these ad di tional in ter ests in mak ing de ci sions, thereby pro mot ing a broader con cep tion of the range of ap pro pri ate ac tions sup port ing vol un tary CSR that would serve both mar - ₂ ket and so cial in ter ests.

  A yet more pro gres sive view de scribes cor po rate busi nesses as en ti ties that seek to ful fill goals that are of ten in con sis tent with vol un tarily as sumed so cial re spon si bil i ties, leav ing the state as the pri mary in sti tu tion to cre ate CSR through le gal reg u la tion. Un der this view, the cor po ra tion is rec og nized as a le gal con struct cre ated to carry out com mer cial ac tiv i ties within a par tic u lar le gal form that pro vides ben e fits to cor po rate share hold ers and that lim its the per sonal li a bil ity of cor po - rate di rec tors. The busi ness cor po ra tion’s goals, which are fo cused on in creas ing prof its and ex - pand ing the cor po ra tion’s mar ket con trol, are gen er ally car ried out through a non-dem o cratic cor po rate struc ture. The choice of as sum ing ob li ga tions of CSR will be made within these goals and struc ture, as well. So cially re spon si ble pol i cies will be adopted and im ple mented only when they fur ther the cor po rate goals of profit-mak ing and mar ket ex pan sion. Given the re al ity that so cially ir - re spon si ble tac tics, such as em ploy ing child la bor and pay ing low wages, will of ten pro mote these cor po rate goals, vol un tary CSR is an un re li able op tion for fur ther ing so cially re spon si ble cor po rate pol i cies. CSR should, there fore, be man dated through dem o cratic gov ern men tal pro cesses that reg u - late the cor po ra tion, in clud ing la bor and en vi ron men tal reg u la tions that can be en forced through the courts.

  The view that em pha sizes le gal reg u la tion of CSR also rec og nizes the role of pres sure tac tics that af fect the cor po ra tion’s mar ket strength, in clud ing un ion or ga niz ing cam paigns, con sumer boy - cotts, and in ter na tional pub lic ity of em ployer ac tions to wards em ploy ees. Along with le gal reg u la - tion, such mea sures are part of a broader ap proach of co erc ing the cor po ra tion into act ing more re spon si bly. Rather than mo ti vat ing truly vol un tary CSR, mar ket pres sure cre ated by col lec tive ac - tion of un ions and NGOs may co erce the cor po ra tion into adopt ing so cially re spon si ble pol i cies in an at tempt to avoid ei ther state reg u la tion or a de crease in mar ket strength.

  An im por tant dis tinc tion be tween the two views of CSR is the dif fer ence be tween the ide ol o - gies un der ly ing the two ap proaches. The pref er ence for vol un tary CSR is based on an eco nomic ide - ol ogy that ac cepts cor po rate goals as equal to – or even su pe rior to – the so cial goal of cre at ing en force able in di vid ual eco nomic and po lit i cal rights. This view of the busi ness cor po ra tion is con - sis tent with a strong sys tem of pri vate prop erty rights where the state pro tects pri vate con trol of cap - i tal from state reg u la tion or in ter fer ence from other pri vate par ties. Un der this ap proach, the cor po rate cit i zen is highly val ued for its con tri bu tions to the econ omy. The so cial wel fare is im - proved when the cor po ra tion is fi nan cially suc cess ful, ben e fit ing the work ers and con sum ers. The cor po ra tion’s com mit ment to its fi du ciary duty to act in the in ter ests of its share hold ers or other stake holders and its con cern with pub lic im age will then mo ti vate it to act re spon si bly to strengthen its sta tus in the mar ket and the com mu nity.

  On the other hand, de fin ing CSR as a pro cess of le gal reg u la tion is based on an ideo log i cal ap proach that views po lit i cal and eco nomic rights of in di vid u als as be ing in de pend ent from pro mot - ing the goals of the busi ness cor po ra tion. The state has the ul ti mate re spon si bil ity for en sur ing that in di vid u als in a so ci ety have ba sic needs ful filled, in clud ing rights in em ploy ment such as a min i - mum wage, safe work ing con di tions, the right to union ize, and non-dis crim i na tory treat ment. Rec - og niz ing that cor po rate goals are of ten in con sis tent with en sur ing such em ployee rights, the state will reg u late em ploy ers by cre at ing en force able rights of em ploy ees and cor re spond ing ob li ga tions of their em ploy ers. Such cor po rate ob li ga tions may well af fect a busi ness’s profit mar gins, as the em ployer’s abil ity to uni lat er ally set wages and work ing con di tions will be lim ited by di rect le gal reg u la tions and by col lec tive bar gain ing with union ized em ploy ees.

  This re port on CSR in the United States will ad dress the three main ar eas sug gested for the fo cus of this In ter na tional Sem i nar: hir ing pol icy; per son nel man age ment pol icy; and so cial pro tec - tion pol icy. This dis cus sion will re veal the im por tance of ide ol ogy in set ting the di rec tion of U.S. eco nomic and so cial pol icy and in lim it ing the scope and depth of le gal reg u la tion to man date CSR. While the ide ol ogy of strong pri vate prop erty rights has been par tic u larly vir u lent since the pri vat - iza tion trends of the 1980s, U.S. la bor pol icy has al ways fa vored em ploy ers’ in ter ests through lim - ited reg u la tion and weak en force ment of em ployee rights leg is la tion. This “hands off” ap proach to cor po rate reg u la tion cre ates a de fault po si tion that re lies on vol un tary cor po rate ac tions that serve the in ter ests of em ploy ees and their com mu ni ties. The re al ity of cor po rate goals, how ever, has re - sulted in weak pro tec tion of em ployee rights in the United States.

  The global na ture of cap i tal, in clud ing U.S. cor po ra tions do ing busi ness as trans na tional cor - po ra tions (TNC), re quires the dis cus sion of CSR to take place at mul ti ple lev els of na tional and in - ter na tional cor po rate ac tions. The op tions for vol un tary CSR or le gally im posed CSR must be viewed in multi-na tional con texts as well as in the con text of na tional pol icy. The same is sues ap ply at this in ter na tional level, in clud ing cor po rate in cen tives to ex ploit la bor through em ploy ment of chil dren, pay ing pov erty level wages, and pro vid ing un safe work ing con di tions. Thus, this re port will seek to ad dress the three ar eas of hir ing, per son nel man age ment, and so cial pro tec tion in the con text of in ter na tional reg u la tion of cor po ra tions, as well as through na tional reg u la tion. The dis - cus sion of each of these three ar eas will set forth the cur rent sta tus of U.S. law, prob lems of ef fec tive en force ment of ex ist ing na tional law, and the need for in creased reg u la tion and stron ger en force - ment of ex ist ing le gal stan dards at the na tional and in ter na tional lev els to achieve cor po rate com pli - ance with a stan dard of so cial re spon si bil ity.

II. Em ploy ment Pol icy in Hir ing and Dis charge

  A dis cus sion of hir ing pol icy un der U.S. la bor law nec es sar ily in cludes an un der stand ing of the law re lated to the dis charge of em ploy ees, given the con tin ued im por tance in the United States of the com mon law doc trine of “em ploy ment at will.” Un der the fa mil iar lit any of em ploy ment at will doc - trine, an em ployer may hire or dis charge an in di vid ual for “a good rea son, a bad rea son, or no rea son at all,” em pha siz ing em ploy ers’ uni lat eral power to de cide whether to ini tially em ploy or con tinue to em ploy an in di vid ual. In other words, the em ployer has no ob li ga tion to make ra tio nal hir ing de ci - sions nor to dis charge em ploy ees only for “just cause.” Though most col lec tive bar gain ing agree - ments in clude pro vi sions re quir ing the em ployer to dis charge or dis ci pline em ploy ees only for just ₃ cause, only about 9% of the pri vate sec tor workforce is union ized. Many pub lic sec tor em ploy ees are pro tected by a just cause re quire ment un der civil ser vice stat utes or col lec tive bar gain ing agree - ments. Even in a union ized workforce, how ever, hir ing de ci sions are usu ally out side the scope of man da tory sub jects of bar gain ing.

  Given the scope of em ployer power un der the em ploy ment at will doc trine, stat u tory lim i ta - tions on the com mon law doc trine are es pe cially im por tant for lim it ing em ploy ment de ci sions that would be con sid ered so cially ir re spon si ble. These le gal lim i ta tions have taken the form of anti-dis - crim i na tion leg is la tion pro hib it ing em ploy ers from bas ing em ploy ment de ci sions on an in di vid ual’s race, sex, na tional or i gin, re li gion, age, or dis abil ity. Such anti-dis crim i na tion stat utes ex ist at the fed eral level, as well as in state leg is la tion or lo cal or di nances. This leg is la tion has its or i gins in the ₄

  1960s Civil Rights move ment, in clud ing the fed eral Equal Pay Act of 1963, re quir ing em ploy ers to pro vide equal pay to women per form ing work sub stan tially sim i lar to men, and Ti tle VII of the Civil ₅ Rights Act of 1964, which pro hib its em ploy ment dis crim i na tion on the ba sis of race, sex, na tional or i gin, or re li gion. Both stat utes ap ply to pub lic and pri vate sec tor em ploy ers, though it was not un til 1972 that the Civil Rights Act was ex tended to cover the pub lic sec tor work place. Con gress has en - acted ad di tional anti-dis crim i na tion leg is la tion, in clud ing the Age Dis crim i na tion in Em ploy ment

6 Act of 1967 (ADEA), pro hib it ing em ploy ment dis crim i na tion against in di vid u als forty years of age

  ₇ or older, and the Amer i cans with Dis abil i ties Act of 1990 (ADA). Both stat utes cover pri vate and pub lic sec tor em ploy ment.

  Fed eral anti-dis crim i na tion leg is la tion cre ates an im por tant source of rights for women and mi nor ity groups seek ing broader ac cess to the work place. Such stat utes are mean ing ful, both for their sym bolic sig nif i cance in stat ing pub lic pol icy of work place equal ity and for chang ing em - ployer hir ing and em ploy ment prac tices. As noted by many com men ta tors, anti-dis crim i na tion law has been most ef fec tive in cre at ing con di tions of “for mal equal ity,” ex pand ing em ploy ment op por - tu ni ties for women and mi nor i ties who meet the same em ploy ment cri te ria ap plied to ma jor ity group ₈ ap pli cants. For ex am ple, an em ployer must con sider equally men and women ap pli cants who meet the ed u ca tional and ex pe ri ence re quire ments set by the em ployer for hir ing an en gi neer. Hir ing a male ap pli cant for the po si tion over a fe male ap pli cant with the same qual i fi ca tions would es tab lish a prima fa cie case of in ten tional sex dis crim i na tion un der Ti tle VII of the Civil Rights Act of 1964. While the em ployer may re but the in fer ence of il le gal in tent with ev i dence of a non-dis crim i na tory rea son for his ac tion, the fe male ap pli cant’s abil ity to show that she is “the same as” the male ap pli - cants in cri te ria rel e vant to the po si tion as en gi neer pro vides her with an im por tant le gal ve hi cle to ₉ chal lenge the em ployer’s hir ing de ci sion. Fur ther, if the fe male plain tiff has di rect or cir cum stan tial ev i dence that the em ployer’s hir ing de ci sion was mo ti vated in part by her sex – a stan dard of proof that goes be yond show ing that the em ployer failed to hire her – the plain tiff has proven that the em - ployer vi o lated Ti tle VII. The em ployer’s de fense, show ing that he would have made the same de ci - sion in the ab sence of con sid er ation of sex, is then rel e vant only with re gard to the rem e dies to be ₁₀ or dered. The de fense is still quite sig nif i cant, though, as a suc cess ful de fense will pro tect the em - ployer from an or der to hire the plain tiff or to pay dam ages. This al lo ca tion of proof of in ten tional dis crim i na tion ap plies to the em ployer’s de ci sions to dis ci pline or dis charge em ploy ees, as well as em ployer pol i cies and prac tices re lated to other work ing con di tions. This ap proach to prov ing in ten - tional dis crim i na tion is the model for all bases of dis crim i na tion un der Ti tle VII and other anti-dis - crim i na tion leg is la tion, in clud ing race, re li gion, na tional or i gin, age and dis abil ity.

  While rec og niz ing the im por tance of in creased for mal equal ity, com men ta tors have raised cri tiques that anti-dis crim i na tion leg is la tion has been much weaker in pro vid ing “sub stan tive equal - ₁₁ ity” for women and mi nor i ties. The con cept of sub stan tive equal ity states a goal of more fun da - men tal so cial change, seek ing deeper re form of stan dards that fa vor the ma jor ity group by us ing it as the norm for set ting job re quire ments and work ing con di tions. For ex am ple, though job re quire - ments that set in flex i ble work hours of 9:00 a.m to 5:00 p.m. may be ac cepted as nor mal for many jobs, they dis ad van tage women, who are still the pri mary care tak ers of young chil dren in the fam - ₁₂ ily. As sump tions about cer tain types of in di vid u als to fill cer tain types of jobs may also fa vor the ma jor ity group. For ex am ple, the im age of large, “tough-look ing” in di vid u als for po lice of fi cers is based on the idea that men set the norm for this po si tion. The im age of young women flight at ten - dants is based on the ex pec ta tion that young, at trac tive women should serve the air lines’ cli en tele. The ma jor ity group is also fa vored by the sys tem atic way in which the mar ket sets wages for cer tain oc cu pa tions held pre dom i nately by men or by whites. For ex am ple, childcare or nurs ing jobs are held pre dom i nately by women and have low sal a ries, while elec tri cians or phy si cians are well-paid oc cu pa tions held pre dom i nately by men.

  Mak ing changes in these sorts of em ploy ment cri te ria and con di tions goes be yond a con cept of treat ing all groups and in di vid u als “the same,” to de velop le gal doc trines that will break down oc - cu pa tional seg re ga tion on the ba sis of race and sex. These is sues of sub stan tive equal ity raise the ques tion of the proper goals of anti-dis crim i na tion leg is la tion and ju di cial in ter pre ta tion of such laws. Stated in terms of CSR, should the law reg u late em ploy ers to ward achiev ing a goal of fun da - men tal so cial change or is it suf fi cient for em ploy ers to avoid in ten tional dis crim i na tion with out any ob li ga tion to change their hir ing cri te ria to achieve a more just so ci ety? U.S. anti-dis crim i na tion law makes only par tial prog ress to ward sub stan tive equal ity through le gal doc trines of “ad verse im pact,” equal pay re quire ments, and af fir ma tive ac tion. Un der an ad - verse im pact the ory of dis crim i na tion, neu trally stated em ploy ment prac tices that, in ap pli ca tion, have a dis pro por tion ately neg a tive ef fect on a pro tected group vi o late Ti tle VII of the Civil Rights Act, un less the em ployer can prove that the em ploy ment prac tice is job-re lated and a busi ness ne ces - sity. Thus, un der the ad verse im pact doc trine, an em ployer’s in tent is ir rel e vant, as the rel e vant le gal is sue is the ef fect of the em ployer’s prac tice. The ad verse im pact the ory of dis crim i na tion is es sen - tial for ad dress ing the sys temic na ture of dis crim i na tion, where deeply rooted dis crim i na tory em - ploy ment prac tices seem “nor mal” be cause they have been used for such a long time. As the United States Su preme Court has stated, elim i nat ing such dis crim i na tory prac tices is nec es sary to re move “em ploy ment pro ce dures or test ing mech a nisms that op er ate as ‘built-in head winds’ for mi nor ity ₁₃ groups and are un re lated to mea sur ing job ca pa bil ity.” For ex am ple, weight lift ing tests for the po - si tion of fire fighter, which have a neg a tive im pact on women, are un law ful un less the tests are ac tu - ally job-re lated and ful fill a busi ness ne ces sity, and un less the need for strength can not be ful filled in an al ter na tive man ner, such as us ing heavy lift ing equip ment or ac com plish ing the nec es sary task with out lift ing. As fem i nist the o rists have ob served, how ever, the courts have not in ter preted ad - verse im pact doc trine to ap ply to some ac cepted prac tices, such as in flex i ble work sched ules, long work days, or ex ten sive travel, which dis ad van tage women due to the un equal child care bur den that ₁₄ con tin ues to be car ried by women. This bur den has a par tic u larly neg a tive im pact on women in the

  United States, given the ab sence of pub licly funded childcare pro grams. Courts are un will ing, how - ever, to re quire em ploy ers to re struc ture a job in a way that would be more com pat i ble with women’s rather than men’s daily lives.

  Sim i larly, the courts have been un will ing to in ter pret Ti tle VII of the Civil Rights Act to en - com pass “pay eq uity,” which would go be yond the for mal equal ity of equal pay re quire ments un der the Equal Pay Act. While the re quire ment of “equal pay for equal work” is es sen tial for elim i nat ing ₁₅ sex dis crim i na tion be tween male and fe male co-work ers, a pay eq uity or “com pa ra ble worth” ap - proach rec og nizes that sex dis crim i na tion in com pen sa tion is based in the higher value placed on oc - cu pa tions held pre dom i nately by the ma jor ity group – white men. Un der com pa ra ble worth anal y sis, the value of an oc cu pa tion held mainly by women or mi nor i ties is com pared to the value placed on a ₁₆ dif fer ent oc cu pa tion held mainly by the ma jor ity group. For ex am ple, un der a com pa ra ble worth job anal y sis point sys tem, nurses could be com pared to elec tri cians with re gard to oc cu pa tional char ac ter is tics such as “knowl edge and skills, men tal de mands, ac count abil ity, and work ing con di - ₁₇ tions.” If the “worth” of the oc cu pa tions is sim i lar but the com pen sa tion for nurses is lower, the ₁₈ dif fer ence in pay is at trib ut able to the gen der dif fer ence.

  Ap pli ca tion of com pa ra ble worth doc trine un der Ti tle VII would go a long way to ward a goal of sub stan tive equal ity. As com pen sa tion be tween fe male and male-dom i nated oc cu pa tions is equal - ized, it is likely that oc cu pa tional seg re ga tion would di min ish, as well. Com pa ra ble worth anal y sis would also pro vide a means for im prov ing ra cial eq uity, given the con cen tra tion in low-pay ing jobs by peo ple of color. The rev o lu tion ary na ture of this le gal doc trine, though, is also the ba sis for ju di - cial re sis tance to its ap pli ca tion. The fed eral judges have con cluded that Con gress could not have in - tended Ti tle VII to reg u late em ployer com pen sa tion sys tems so ex ten sively. Rather, the courts have found that em ploy ers who pay mar ket rates are not re spon si ble for gen der bias in the way that the mar ket dif fer ently val ues male- or fe male-dom i nated oc cu pa tions. As one fed eral cir cuit court ex - plained: “Nei ther law nor logic deems the free mar ket sys tem a sus pect en ter prise…. We find noth - ing in the lan guage of Ti tle VII or its leg is la tive his tory to in di cate that Con gress in tended to ab ro gate fun da men tal eco nomic prin ci ples such as the laws of sup ply and de mand or to pre vent em -

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  ploy ers from com pet ing in the la bor mar ket.” In the ab sence the fed eral ju di ciary’s em brace of com pa ra ble worth anal y sis, the state leg is la tures have been the most im por tant venue for reg u la tion, ₂₀ with some states adopt ing com pa ra ble worth re quire ments for pub lic em ploy ees.

  Af fir ma tive ac tion plans are also sig nif i cant means for achiev ing sub stan tive equal ity, go ing be yond an “anti-dis crim i na tion” ap proach to seek pos i tive mea sures for in creas ing the in clu sion of women and mi nor i ties in oc cu pa tions in which they are un der-rep re sented. Ti tle VII pro vides only par tial prog ress to ward this goal by per mit ting vol un tary af fir ma tive ac tion plans. The United States Su preme Court has held that em ploy ers may vol un tarily adopt tem po rary af fir ma tive ac tion plans that seek to cor rect a “man i fest im bal ance” in the rep re sen ta tion of women and mi nor i ties and that do not “un duly tram mel” the rights of white men by ex clud ing them from con sid er ation for the jobs ₂₁ in ques tion. The courts will not man date that an em ployer adopt an af fir ma tive ac tion plan, though, given the Ti tle VII pro hi bi tion of re quired pref er en tial treat ment on the ba sis of race, sex, na tional ₂₂ or i gin, or re li gion. Fur ther, the cri te ria for up hold ing vol un tary af fir ma tive ac tion do lit tle to en - cour age em ploy ers to adopt such mea sures, given the ex treme na ture of the “man i fest im bal ance” stan dard and the po ten tial for lit i ga tion against an em ployer by white men who are de nied a job.

  The fed eral courts have been will ing to in ter pret the mean ing of Ti tle VII sex dis crim i na tion flex i bly in some cases, but are rigid in oth ers. Thus, the United States Su preme Court has been a leader on the de vel op ment of le gal doc trine de fin ing and pro hib it ing sex ual ha rass ment. In con trast, while the Su preme Court has not yet ruled on the is sue, the lower fed eral courts have re fused to de - fine sex dis crim i na tion in em ploy ment as en com pass ing sex ual ori en ta tion. A num ber of state and lo cal gov ern ments have en acted leg is la tion pro hib it ing em ploy ment dis crim i na tion on the ba sis of ₂₃ sex ual ori en ta tion.

  Fed eral law pro hib it ing em ploy ment dis crim i na tion on the ba sis of dis abil ity has not lived up to its prom ise of chang ing the work place to ac com mo date the needs of in di vid u als with dis abil i ties. The po ten tial for im ple ment ing a model of sub stan tive equal ity is found in the ADA’s re quire ment that em ploy ers pro vide rea son able ac com mo da tions to en able in di vid u als with dis abil i ties to meet job re quire ments. Through such work place reg u la tion, Con gress cre ated a pri or ity of em ployee needs over em ployer pre rog a tive. As in ter preted by the Su preme Court, though, the ADA ap plies a the ory of for mal equal ity in a par tic u larly wooden man ner. The Court has held that in di vid u als whose med i ca tion or cor rec tive de vices mit i gate their phys i cal im pair ment may be ex cluded from ₂₄ the def i ni tion of in di vid u als with a dis abil ity. As a re sult, a dis abled in di vid ual who is un able to meet the re quire ments of the job may be de nied the job be cause he is “not the same as” in di vid u als with out a dis abil ity. How ever, a dis abled in di vid ual who is able to per form the job due to med i ca tion or other cor rec tive de vices may be found to be “the same as” in di vid u als with out a dis abil ity, and there fore, not dis abled enough to be pro tected un der the ADA. The Su preme Court has also held that an em ployer may deny a dis abled em ployee’s re quest for an ac com mo da tion that would vi o late ₂₅ the work place se nior ity sys tem. Here again, the Court ap plies a for mal equal ity the ory that pur - ports to treat ev ery one equally, but ac tu ally de nies sub stan tive equal ity by de fin ing the work place “norm” as those with out dis abil i ties.

  In sum, anti-dis crim i na tion leg is la tion has had some im pact on cor po rate ac tions through its pro hi bi tions of cer tain types of dis crim i na tory em ploy ment prac tices, par tic u larly in in creas ing “for mal equal ity” by open ing op por tu ni ties for women and mi nor i ties to en ter oc cu pa tions from which they had been ex cluded. Anti-dis crim i na tion leg is la tion has been less suc cess ful in pro mot - ing fun da men tal changes in the work place to ward a vi sion of sub stan tive equal ity. The ef fec tive ness of the anti-dis crim i na tion leg is la tion has also been lim ited by the prac ti cal lim i ta tions of the time and ex pense of lit i ga tion, which main tains power in em ploy ers who have the re sources for long-term lit i ga tion. Fur ther, most lit i ga tion is brought by in di vid ual claim ants, which cre ates a highly in di vid u al ized ap proach to work place change. The abil ity of em ploy ees to pro mote equal ity at the work place through col lec tive ac tion is lim ited by the dif fi culty of gain ing ju di cial cer tif i ca tion that a case is ap pro pri ate for a class ac tion. But more im por tant are the ob sta cles faced by em ploy ees seek ing col lec tive ac tion out side of lit i ga tion – through union iza tion – which would en able the em - ploy ees to col lec tively bar gain for changes in wages, hours, and work ing con di tions. The Na tional La bor Re la tions Act (NLRA), which cre ates rights of pri vate sec tor em ploy ees to union ize, is plagued by weak rem e dies and de lays in en force ment, en abling em ploy ers to eas ily re sist union iza - tion through dis charges and threats to dis charge un ion ac tiv ists and other in tim i da tion tac tics. Fur - ther, the NLRA ex cludes the fol low ing cat e go ries of em ploy ees from cov er age: su per vi sors, man a ge rial em ploy ees, in de pend ent con trac tors, do mes tic em ploy ees, and ag ri cul tural work ers. In the pub lic sec tor, four teen states still do not have stat utes cre at ing col lec tive bar gain ing rights for ₂₆ pub lic em ploy ees. Even where pub lic em ployee col lec tive bar gain ing stat utes do ex ist at the state and fed eral level, most pro hibit pub lic em ployee strikes.

  Per son nel Man age ment Pol icy

  Thus far, this dis cus sion has fo cused on em ploy ment is sues within the United States. Bring ing in per son nel man age ment pol icy – par tic u larly the ef fects of cor po rate re lo ca tions and re struc tur ing – nec es sar ily raises and in ter twines is sues at the na tional and in ter na tional lev els. In the United States, em ploy ees in both union ized and non-un ion workplaces have found them selves vir tu ally pow er less in the face of cor po rate de ci sions to re lo cate to coun tries with low wage workforces. TNCs also sub - con tract much of their man u fac tur ing work to busi nesses in de vel op ing coun tries, per mit ting the TNC to avoid li a bil ity for ex ploit ative em ploy ment prac tices of the sub con trac tor. In a third cat e - gory of cor po rate re struc tur ing, em ploy ees in the United States are left with out pro tec tion or com - pen sa tion when their em ploy ers go bank rupt, in clud ing bank rupt cies that re sult from cor rup tion and il le gal prac tices, as in the case of Enron and WorldCom.

  Some ex am ples will il lus trate the scope and depth of the prob lems in each of these three cat e - go ries. In the in ter na tional search for low-wage work ers, large U.S. cor po ra tions have laid off U.S. work ers and re lo cated their man u fac tur ing and ser vice fa cil i ties to coun tries such as Mex ico, In do - ne sia, and the Phil ip pines, which have cre ated Ex port Pro cess ing Zones (EPZs) that of fer low ered ₂₇ taxes to fur ther re duce cor po rate costs. Even where the for mal law of the coun try re quires safe work ing con di tions, pro tec tion for un ion or ga niz ing, and pro hi bi tions against child la bor and sex or race dis crim i na tion, cor po ra tions en gage in such ex ploit ative and dis crim i na tory prac tices due to lax le gal en force ment in the EPZs. For ex am ple, in the Mex i can maquiladoras, lo cated near the U.S.-Mex ico bor der, TNCs have hired Mex i can women for oner ous fac tory work at pov erty level wages, en gag ing in prac tices that vi o late Mex i can law, in clud ing sex ual ha rass ment, preg nancy test - ₂₈ ing, and se vere re tal i a tion against un ion ac tiv ists. In coun tries like Hon du ras, Gua te mala, El Sal - va dor, and China, large U.S. cor po ra tions such as the Gap, Kathie Lee Gifford, Nike, and Reebok sub con tract much of their cloth ing man u fac tur ing pro cesses to sub sid iar ies or sup pli ers that hire ₂₉ child la bor and women work ers un der sim i larly ex ploit ative work ing con di tions. These sub con - tract ing re la tion ships oc cur in the U.S. as well, where sub con trac tors hire the most vul ner a ble em - ploy ees, in clud ing un doc u mented work ers, Asian women, and chil dren to work in sweat shops in ₃₀ such cit ies as New York and Los An geles.

  In the United States, cor po rate cor rup tion scan dals on the scale of bil lions of dol lars have high lighted the vul ner a bil ity of em ploy ees sud denly laid off af ter cor po rate bank rupt cies, with out any sev er ance pay or ben e fits. Non union em ploy ees at Enron and WorldCom lost all their pen sion funds, which had been in the form of em ployee pur chases of Enron or WorldCom stock. While the cor po rate di rec tors and of fi cers pro tected them selves by sell ing their Enron or WorldCom stock prior to the dec la ra tion of bank ruptcy, these same di rec tors and of fi cers pre vented the em ploy ees from tak ing such ac tions, by fail ing to in form the em ploy ees of the cor po ra tion’s fi nan cial prob lems ₃₁ and by pro hib it ing the em ploy ees from sell ing their shares dur ing this pre-bank ruptcy pe riod.

  Dis cus sions of so lu tions to these prob lems must rec og nize the hu man costs of fail ing to im - ple ment ef fec tive rem e dies at both the na tional and in ter na tional lev els. Within the last ten years, in - creased at ten tion has been brought to the hu man rights di men sions of cor po rate ex ploi ta tion of la bor, in clud ing de nial of ba sic eco nomic rights to health care, ad e quate sus te nance and hous ing, po lit i cal rights of speech and as so ci a tion, rights to phys i cal se cu rity, and free dom from race and sex dis crim i na tion. The height ened at ten tion to these hu man rights is sues has fo cused not only on la bor con di tions in de vel op ing coun tries, but in the United States, as well. De spite its great re sources, in - equal i ties of wealth con tinue to widen in the United States, where in the year 2000, CEOs at large ₃₂ cor po ra tions are re ported to have earned 419 times an av er age worker’s pay. As will be dis cussed in the next sec tion of this pa per, the United States is vir tu ally unique among in dus tri al ized na tions in fail ing to pro vide ba sic eco nomic needs to its pop u la tion, in clud ing health care, paid sick leave, paid va ca tions, pub licly funded childcare, and pen sions. Fur ther more, the fed eral gov ern ment fails to ef - fec tively en force even the pro tec tive leg is la tion that does ex ist. In this con text, one ob vi ous mea sure to in crease pro tec tion of em ploy ees’ hu man rights would be more ef fec tive en force ment of ex ist ing na tional laws, in clud ing the Fair La bor Stan dards Act (FLSA), the Oc cu pa tional Safety and Health Act (OSH Act), the Na tional La bor Re la tions Act (NLRA), and Ti tle VII of the Civil Rights Act. The lim ited re sources ap pro pri ated by Con gress to en force the FLSA leaves the U.S. De part ment of La bor with a se vere short age of in spec tors, en abling em ploy ers to avoid their le gal ob li ga tions un - ₃₃ der child la bor pro hi bi tions, min i mum wage stan dards, and over time wage re quire ments. This same re source prob lem ex ists for the Oc cu pa tional Safety and Health Agency (OSHA), which is so lim ited in the num ber of in spec tors that em ploy ers can eas ily choose to ig nore OSH Act stan dards, which re ceive pub lic at ten tion only af ter a di sas ter, such as the North Carolina poul try pro cess ing plant fire in 1992 that re sulted in the death of twenty-five work ers and in jury of fifty-six work ers ₃₄ due to the em ployer’s safety vi o la tions. The weak rem e dies and in ef fec tive en force ment of the

  NLRA ex ac er bate these prob lems by plac ing ob sta cles in the way of em ploy ees’ ef forts to union ize and col lec tively bar gain for higher wages, work place safety stan dards, anti-dis crim i na tion pro vi - sions, and im proved ben e fits and work ing con di tions.

  La bor con di tions in the United States pro vide in sight into the ques tion of CSR re gard ing cor - po rate re struc tur ing, whether in the form of cor po rate re lo ca tion in search of cheap la bor, cor po rate sub con tract ing, or cor po rate bank ruptcy. The lack of ef fec tive en force ment of U.S. la bor laws leaves im ple men ta tion of em ployer le gal ob li ga tions largely to the em ployer’s dis cre tion; in other words, to vol un tary CSR. The case of the United States – with its se vere in equal i ties in the dis tri bu - tion of wealth, the ex is tence of sweat shops, the lack of health care, pen sions, paid sick leave, or paid va ca tions for most em ploy ees, and the bar ri ers to union iza tion to im prove these con di tions – shows that vol un tary CSR does not work, even in a re source rich, highly de vel oped econ omy. Thus, pro - pos als for vol un tary CSR, such as cor po rate codes of con duct in de vel op ing coun tries, can not be taken se ri ously as mean ing ful mea sures to pro tect ba sic hu man rights of la bor. At best, such vol un - tary cor po rate codes can be used as sup ple men tal mea sures to gain ac cess to in for ma tion about fac - to ries in the United States and other coun tries, which can then be used in in ter na tional pub lic ity cam paigns to pres sure the cor po ra tions to im prove work ing con di tions. At worst, though, vol un tary cor po rate codes may de tract from ef forts to im pose en force able reg u la tion man dat ing cor po ra tions to com ply with la bor stan dards.

  What, then, is to be done? First, ex ist ing U.S. la bor and em ploy ment laws should be ef fec - tively en forced. This will re quire ad e quate fund ing to be ap pro pri ated by Con gress to pro vide a suf - fi cient num ber of in spec tors and other per son nel in the fed eral agen cies charged with en force ment of laws such as the FLSA and the OSH Act. Ef fec tive en force ment may also re quire leg is la tive amend ments, as in the case of the NLRA, which has rem e dies so weak and such long de lays in en - force ment that em ploy ers do not have an in cen tive to com ply with the law. Strength en ing the NLRA will fa cil i tate union iza tion ef forts by U.S. em ploy ees, which will en able them to col lec tively bar gain for work place protections. For ti fy ing Amer i can work ers’ rights to union ize is nec es sary but not suf - fi cient to op pose cor po rate ex ploi ta tion of la bor. In the face of a col lec tive bar gain ing agree ment pro vid ing for good wages, ben e fits, and work ing con di tions, U.S. cor po ra tions will seek cheap la - bor else where in the global cor po rate “race to the bot tom.” It is es sen tial, there fore, to cre ate ef fec - tive rights of union iza tion in ter na tion ally to en able all work ers to act col lec tively to im prove their wages, ben e fits, and work ing con di tions. Ful fill ing this goal will op pose cor po rate power by build - ing an in ter na tional la bor move ment, which is es sen tial to fight the xe no pho bia in the United States that can oc cur where Amer i cans view work ers in other coun tries as com pet i tors rather than as la bor al lies.

  Mul ti lat eral trade agree ments have been the pri mary ve hi cle for pur su ing in ter na tional rights to or ga nize, in an at tempt to con di tion the ben e fits of free trade on the agree ment part ners’ en force - ment of la bor rights to union ize and en gage in col lec tive bar gain ing. This ap proach may be pref er a - ble to set ting min i mum stan dards for wages, ben e fits, and other work ing con di tions, given the dif fer ing lev els of eco nomic de vel op ment of the coun tries ne go ti at ing the trade agree ments. An ef - fec tive right to or ga nize would en able un ions to ap ply col lec tive eco nomic pres sure on cor po ra tions and gov ern ments to im prove wages, ben e fits, and work ing con di tions. As cri tiques have noted, this tac tic of trade agree ment con di tion al ity has had only lim ited suc cess due to the weak ness of la bor ₃₅ pro vi sions in trade agree ments. The North Amer i can Agree ment on La bor Co op er a tion (NAALC) was added as a side agree ment late in the ne go ti a tion of the North Amer i can Free Trade Agree ment (NAFTA), cre at ing a sys tem un der which any one of the three NAFTA gov ern ment part ners or a pri - vate party can file a sub mis sion al leg ing that one of the other two coun tries has failed to en force its ₃₆ do mes tic la bor law. The NAALC, how ever, lacks the mus cle needed to make it an ef fec tive guar - an tor of la bor rights in the three NAFTA part ner na tions, based on the com pli cated and un wieldy ₃₇ steps in this sys tem and the ab sence of any se ri ous en force ment pro vi sions in the NAALC. Other trade agree ments suf fer from sim i lar prob lems, which are in some cases in creased by the weak ness ₃₈ of the trad ing part ner’s na tional la bor law. The United States is cur rently ne go ti at ing other trade agree ments, in clud ing the Cen tral Amer i can Free Trade Agree ment (CAFTA) and the Free Trade of the Amer i cans Agree ment (FTAA), nei ther of which yet has mean ing ful la bor pro vi sions in draft ₃₉ agree ments. Given the con ser va tive shift in U.S. pol i tics and the AFL-CIO’s cur rent lack of clout, it seems doubt ful that such la bor pro vi sions – even if in cluded in trade agree ments – will pro vide for strong en force ment mech a nisms. Their use ful ness, there fore, will likely re main at the level of cre at - ing the foun da tion for cross-bor der al li ances be tween the AFL-CIO and trade un ions in other coun - ₄₀ tries in sup port of spe cific or ga niz ing cam paigns.

  The U.S. Con gress could in crease cor po rate so cial re spon si bil ity by en act ing leg is la tion cre - at ing li a bil ity of cor po ra tions for the ac tions of their sub sid iar ies and sub con trac tors. There have been ex ten sive cri tiques of the cur rent sys tem that per mits pow er ful gar ment and sport ing goods man u fac tur ers like the Gap or Nike to avoid li a bil ity for sweat shop con di tions in fac to ries run by ₄₁ their sub sid iar ies or sub con trac tors en gaged in es sen tial as pects of the man u fac tur ing pro cess. Im - pos ing li a bil ity on the pri mary em ployer – such as Nike – for its sub sid iar ies’ or sub con trac tors’ sub - stan dard wages and work ing con di tions would rec og nize the pri mary cor po ra tion’s abil ity to con trol ₄₂ the sub sid iary or sub con trac tor, in clud ing the work pro cess and la bor con di tions. Reg u lat ing the pri mary cor po ra tion would, thus, in crease cor po rate so cial re spon si bil ity in a way that com ports with the re al ity of its re la tion ships with sub sid iar ies or sup pli ers. Leg is la tion could im pose such li a - bil ity on all cor po ra tions for il le gal con duct by the cor po ra tions or their sub sid iar ies or sub con trac - tors within the United States and could have ex tra-ter ri to rial ap pli ca tion to ac tions by U.S. ₄₃ cor po ra tions or their sub sid iar ies or sub con trac tors do ing busi ness in other coun tries.

IV. So cial Pro tec tion Pol i cies

  A so ci ety’s so cial pro tec tion pol i cies re flect its con cern for the wel fare of its cit i zens at dif fer ent stages of their lives – from child hood to old age – and in their var i ous roles – as stu dent, em ployee and fam ily mem ber. The choices of whether and how a so ci ety meets these needs range across a broad spec trum, from one ex treme of leav ing in di vid u als to fend for them selves, to the other end of the spec - trum of en sur ing that all in di vid u als have ad e quate sup port through out their lives. Based on a deeply en trenched ide ol ogy of in di vid u al ism, the United States has never had a strong wel fare state. Since the Rea gan ad min is tra tion, even the wel fare pol i cies of the 1930s New Deal have been un der at tack through re struc tur ing of wel fare pro grams and cuts in other gov ern men tal pro grams for the poor, such as job train ing. The United States stands out among in dus tri al ized coun tries for its lack of leg is la tion cre at ing ba sic eco nomic rights to health care, paid sick leave, paid or un paid va ca tion leave, paid ma - ter nity or pa ter nity leave, or rights to pen sions. Un der the weak wel fare state, in di vid u als must ei ther pro vide for their own needs or rely on their em ploy ers’ pol i cies that may cover such needs.