A growing number of corporate law scholars embrace the idea that employees should have some representation on corporate boards, a concept known as codetermination.  Multiple factors drive the calls for reform.  America’s labor movement has long been in decline, accompanied by worsening economic prospects for working-class Americans.  Some scholars see codetermination as a potential pathway to improving workers’ economic outcomes.  Others view workplace democracy as necessary to protect human dignity and autonomy.  Finally, Horst Eidenmüller and I have suggested in prior work that subjecting the very largest U.S. corporations to codetermination may protect the democratic state against the political influence of large corporations.

The heterogeneous justifications for codetermination have produced a panoply of different policy proposals.  Some authors support employee codetermination in principle without dwelling on the finer details.  Others, however, propose specific regulatory regimes.  For example, Senator Elizabeth Warren’s Accountable Capitalism Act would apply to corporations with gross receipts of more than $1 billion and would allow employees to elect 40% of corporate directors. Senator Bernie Sanders, meanwhile, has proposed that employees at companies with assets or revenues of at least $100 million should elect 45% of corporate directors.

However, all proponents of codetermination must eventually face a fundamental question: whether to include overseas employees of U.S. corporations.  Should the right to elect some of the directors of U.S. corporations be extended to employees of U.S. corporations who are based overseas?  And if one decides to include overseas employees, should the right to elect directors be limited to overseas employees who are directly employed by U.S. corporations?  Or should one extend it to employees who are employed indirectly through foreign subsidiaries?  Such an extension would prevent U.S. corporations from using subsidiary corporations to circumvent the codetermination requirement.  And should it matter whether the overseas employees are U.S. citizens?

These questions are of tremendous practical importance.  Many large U.S. corporations have come to rely heavily on overseas workers.  Some well-known companies such as Coca-Cola, General Electric, and Oracle even employ more workers overseas than in the United States.  Therefore, codetermination’s advocates must provide some account of how to deal with direct and indirect overseas employees.  Critics will likely argue that protecting overseas employees is not in the United States’ interest.  They may assert that Congress should attach little to no value to the interests of overseas employees.  However, even if one believes that Congress should disregard the interests of overseas employees, it does not follow that one should deny them a voice in codetermination.  Some of the benefits of extending codetermination to overseas employees will be reaped by U.S. corporations and U.S. employees.  For example, granting overseas workers codetermination rights has the potential to protect U.S. workers because it disincentivizes U.S. corporations from moving jobs overseas, thereby creating a more level playing field.  Moreover, codetermination is associated with certain governance benefits, such as an improved flow of information from a corporation’s workforce to its management.  Extending codetermination to overseas workers would increase these governance benefits and thereby benefit U.S. corporations and, by extension, their shareholders.

Of course, codetermination has costs as well as benefits.  However, at least some of these costs are incurred regardless of whether codetermination rights are limited to U.S. employees or are also granted to overseas employees.  For example, a mandatory codetermination regime would require additional mandatory norms, such as rules governing the composition of board committees, to prevent corporations from isolating and disempowering employee directors.  Such additional mandatory norms are a fixed cost of codetermination that arises regardless of whether codetermination rights are extended to overseas employees.

Despite the importance of these pending questions, most proponents of U.S. codetermination law ignore the issue of overseas employees.  My paper Codetermination’s Moment of Truth: Overseas Workers, which is forthcoming in the BYU Law Review, fills that gap.  Drawing on economic and philosophical theories on codetermination as well as on doctrinal and comparative considerations, it analyzes how the inclusion or exclusion of overseas workers impacts codetermination’s costs and benefits.  This paper shows that there is no easy answer regarding the appropriate role for overseas workers.  Including overseas workers in a U.S. codetermination regime would reinforce some of the likely benefits of codetermination but also increase some of its costs.

In a way, the issue of overseas workers functions as a litmus test.  The politicians, pundits, and scholars who advocate for codetermination are not a homogeneous group.  Their hopes and expectations about what codetermination can and should accomplish are quite diverse.  Thus, codetermination is comparable to a blank screen on which different groups project their expectations and ideals.  The issue of overseas workers disrupts the relative harmony among codetermination’s supporters because whether one believes codetermination ought to be extended to foreign workers must depend, in large part, on the relative weight that one accords to codetermination’s various economic and non-economic costs and benefits.