Massachusetts Businesses and Labor Unions Are Entitled to the Same Free Speech Rights

The ability of businesses and unions to participate in electoral politics has long been a contentious topic, particularly in the years since Citizens United v. FEC. That decision struck down a federal ban on independent expenditures from those entities, but not a ban on direct donations from businesses and unions to candidates and parties (those bans still stand on the federal level).

State laws sometimes differ in this approach. In Massachusetts, for example, unions are allowed to donate up to $15,000 per year to candidates – 15 times more than the state’s limit on donations by individuals. Businesses, however, are not allowed to give even one penny directly to a candidate’s campaign. (Technically, a union in Massachusetts can give $15,000 per year to one candidate’s campaign. After reaching this threshold, they then must abide by a $500 per candidate per year limit.)

This double standard has prompted two Massachusetts businesses to challenge the law in state court. The lawsuits were originally filed on their behalf in early 2015 by the Goldwater Institute, an Arizona-based think tank. Both businesses contend that they just want to be treated equally to unions, while the Commonwealth argues that “Government is entitled to regulate different entities differently… Unions are different than corporations.”

That unions and businesses are different entities is obvious, but it is questionable that the political speech of each group is any different. It seems more likely that this double standard exists because of the decidedly partisan split between them. Labor unions give overwhelmingly to Democrats, while businesses are perceived as being friendlier to Republicans (although it’s actually a more even split, according to figures from the Center for Responsive Politics). Likely, as a result, the Massachusetts GOP has tried to lower the union contribution limit, if not remove the disparity entirely. Unfortunately for Massachusetts Republicans, the Democratic Party dominates state politics, aside from the Governor’s Office.

Examining this issue through the lens of the First Amendment, rather than partisan advantage, explains why the double standard is constitutionally suspect. The seminal 1976 Supreme Court case, Buckley v. Valeo, established that contributions to federal candidates are a form of free speech, and may only be regulated to prevent corruption or the appearance of corruption. Applying that same principle to candidates for state office would allow state governments to regulate business and union contributions. However, if the law says that union contributions up to a certain amount are not corrupting, it stands to reason that identical contributions coming from businesses are also not corrupting. This destroys the current justification for banning such donations from corporations entirely.

This is a double standard that does not exist on the federal level, which forbids both corporations and unions from making political contributions to candidates. Similar disparities have been struck down in other states as well. In Kentucky, the Goldwater Institute successfully challenged a ban on political donations by corporations – briefly allowing both unions and businesses to contribute, until state regulators decided to extend the ban to both groups (while allowing both to set up political action committees).

If these precedents hold, then Massachusetts’ ban on contributions by businesses ought to be dismissed on Equal Protection grounds as well. That would mean a single standard that either allows or bans both unions and firms from contributing. Currently, 27 states allow both businesses and unions to donate directly to candidates. It would be a shame if the Commonwealth decided to bar both groups from participating in state politics simply to spite businesses. After all, Massachusetts currently believes that union contributions do not corrupt the political system, so why should it change its mind when that same right applies to other groups? That would amount to an admission that the state government trusts some types of organizations to engage in politics more than others, and openly picks winners and losers in the campaign finance system without consistency.

Every state ought to craft its campaign finance laws in a way that does not sacrifice the fundamental rights of free speech and equal treatment under the law. If avoiding the appearance of corruption is a justification for imposing restrictions on political speech, lawmakers and regulators in Massachusetts should also beware the appearance of partisan favoritism in allowing some groups to speak more than others (or at all).

The Center for Competitive Politics is now the Institute for Free Speech.