Corporate Laws vis a vis Employees Rights

May 19, 2023

Corporate Laws vis a vis Employees’ Rights


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Corporate Laws vis a vis Employees’ Rights

     The operation of companies in the US is vertically governed by corporate laws. (Romano, R. 1993). These are sets of legislations that regulate the day-to-day functioning of companies. Furthermore, they establish and control the inherent powers of corporations in the US. Federal laws that govern corporations and companies merely set an equal ground that ensures the equal application of corporate laws in various states. Every state has its corporate laws. However, these laws are distinctly at variance in different states. Corporations are entitled to the enjoyment of a plethora of rights provided for under the US constitution. The first section of the Fourteenth Amendment to the US constitution provides for the equal protection clause (Amar, A. R. 1991).  The supreme court in Santa Clara County v. Southern Pacific Railroad Co, (1886) categorically retaliated that the right guaranteed under the equal protection clause extends to a corporation. This is because corporations and companies are considered legal persons. The fact that corporations are natural legal persons was affirmed by the court in Trustees of Dartmouth College v. Woodward, (1819).The court in the foregoing case went on to maintain that corporations were thus entitled to the protections guaranteed under the constitution. This means that corporations have the legal ability to sue and be sued. Article 11 of the Bill of rights guarantees the freedom of association and this proposition is enjoyed by shareholders of a company. Some of the federal laws that govern corporations include the 1933 Act and the Securities Exchange Act of 1934. At the state level, a plethora of states has adopted the Model Business Corporation Act.

     A parent company may have a subsidiary company. A company is a subsidiary when its powers to make decisions are controlled by another entity which is the parent company. In a nutshell, these are affiliate companies and are either controlled directly or indirectly by the parent company. Despite the fact the decisions of a subsidiary company in controlled by others, it operates as a distinct corporation from the parent company. (Ballantine, H. W. 1925).

     The first subsidiary company located in Ypsilanti, Michigan enjoys the benefit of operating separately from the parent company. This company ought to be governed by the Michigan General Corporations Act of 1934. The US constitution is supreme and all the corporate codes and practices ought to conform with the provisions of the constitution. The right to privacy is guaranteed under the 1st Amendment, the 3rd Amendment, the 4th, and the 5th Amendment of the US constitution. (Brandeis, L., & Warren, S. 1890). The Fourth Amendment guarantees the privacy of a person and possessions as against unreasonable searches. The significance of this right was affirmed by the court in Olmstead v. United States, (1928). This right however is not absolute. In a summary, employers may conduct searches on their employees if they have a reasonable cause to do so. The constitution only prohibits unlawful searches by the government. Under the case scenario, the company is a private entity and may subsequently enforce searches on employees as a measure of securing the company. The company ought to establish that illegal items such as drugs and weapons find no way into the company. The court in Hayes v. Unemployment Compensation Board of Review, (2010) maintained the position that an employer had the right to run his own business in a manner he deems fit unless limited by gross reasons. This means that employees under the private sector have very limited rights. From the foregoing position, the company can continue to search employees with reasonable cause that conforms with provisions of the US constitution. “Each man’s home is his castle. There is a need for one to protect their own business per se.”

     The other subsidiary company located in Sandusky, Ohio is subsequently governed by Section 21B of the Ohio Senate Bill that amended the Ohio General Corporate laws (CAP 1701) of the Ohio revised code. The company is acting under a contract with the government. The government has directed the company to search civilian employees without any reasonable cause. Such acts by the government amount to a violation of constitutional rights. The Fourth Amendment under the US constitution guarantees a person protection against unreasonable searches by the government. Since the Ohio company is acting under the directives of the government then the searches conducted on the employees amount to a violation of their rights under the Fourth Amendment of the US constitution. (Maclin, T. 1993). This position has been retaliated by the court in Abel vs United States, (1960). The Miranda case, (1966) is the current-day landmark decision that is often referred to concerning unreasonable searches. Although that right is not absolute, the government did not show any reasonable cause for the searches to be conducted. Furthermore, anything turned as evidence from the searches should not be admitted as evidence in court. this was the position of the court in Mapp vs Ohio, (1961). The US supreme court was categorical that evidence obtained from unreasonable searches was subject to the exclusionary rule. The government should not invade people’s privacy where there is no reasonable cause to do so.”

     The third company is based in France. Both the US and France are member states of the Organization for Economic Co-operation and Development (OECD) that is based in France. The OECD has a guideline on the protection of privacy and personal data. The company violates provisions of international law concerning privacy by collecting people’s data without their consent.  The European Court of Human Rights highlighted the importance of personal data in the case of Laender vs Sweden. The court went ahead to establish the significance of such a right being protected. The French-based company is in clear violation of that. The right to privacy under international law is entrenched under Article 17 of the ICCPR. The Supreme Court of India in Justice KS Puttaswamy (Retd) and Another v Union of India and Others, (2012) vastly elaborated on the significance of this right. The French-based company is in clear violation of the right to data protection and the right to privacy.  “The international society ought to strive more towards the protection of people’s data.”

     In summary, the US constitution prevents the government from conducting unreasonable searches on citizens under the Fourth Amendment. However, private employers can conduct searches on employees as so far as the search is conducted under goodwill without malice. Employees under private sectors have very limited rights concerning searches. In the current era, information easily transverses across the globe. International articles have inherently aided in the protection of personal data and the right to privacy.


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