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Comparative Labor Law and Policy Journal

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Since the 1970’s, multinational corporations (MNCs) in large numbers have adopted codes of conduct declaring their commitment to workers’ rights. These codes, however, do not require adherence to specific labor regulations or standards in a global setting. The MNC record on voluntary compliance has been discouraging, especially in labor-intensive industries like apparel, shoes, and toys, where a global supply chain of contractors effectively controls labor conditions. The persistent gap between aspiration and achievement regarding corporate codes has led to disagreement over their meaning and value. MNCs hope to be judged on the basis of the self-regulatory systems they have established. They believe that codes and accompanying monitoring practices will generate economically profitable good will and also give rise to a legal safe harbor from regulators who must allocate scarce resources among delinquent actors. In light of these ambitious corporate assumptions, it is worth asking whether the application of codes should be subject to outside challenge, and potential improvement, on behalf of putative beneficiaries. This article examines the possibilities for enforcing corporate codes against the MNCs that draft and promulgate them. It first provides an overview of freedom of association (FOA) provisions that appear in more than 25 codes posted on corporate websites. The overview reveals divergent approaches regarding inter alia how much depth and force the FOA commitment contains; whether the same FOA commitment applies to a company’s own employees and its corporate suppliers; and whether the commitment is accompanied by a disclaimer. The article then discusses in depth certain key shortcomings to the codes as self-regulatory operations. It identifies both external and internal obstacles to successful monitoring, including monitoring by independent entities. The article recognizes that private rights of action may carry counterveiling costs, but it contends they may also be an essential complement if corporate codes are to promote freedom of association in effective terms. Finally, the article identifies and briefly analyzes eight potential causes of action to enforce corporate code provisions related to freedom of association. It explores a range of state and federal claims that could be asserted under U.S. law by employees, consumers, or investors. Although there are various obstacles to surviving motions to dismiss, several approaches appear to hold promise. This set of preliminary analyses is meant to encourage greater focus on the need for protection beyond voluntary corporate efforts, and also to deepen the conversation as to which corporate code audiences are best situated to pursue such protection in the courts.