Looking back I hope you can see how we paid off on our promise of informational incrementalism

We’ve suggested that discrimination in the military might be ameliorated by asking a simple question.

We’ve suggested that discrimination by the boy scouts might be ameliorated by mandating a private conversation.

We’ve suggested that marriage discrimination might be ameliorated by collecting vacation pledges.

We’ve suggested that employment discrimination might be ameliorated by certifications of legal promises not to discriminate.

We’ve suggested that discrimination in a variety of contexts might be ameliorated by leaving your sexual preference ambiguous (and we’ve provided concrete suggestions when to and when not to ambiguate).

All of these suggestions are centrally about the management of information. It shouldn’t be surprising that cyberspace is a great tool for progress – and one that we explicitly try to exploit both at www.fairemploymentmark.org and www.vacationpledge.org.

We particularly hope that you will join us in pushing for employer adoption of the Fair Employment mark. Lots of people want to know what they can do to make concrete progress in the struggle for gay rights. Well, private employment is a great place to start. Title VII of the 1964 Civil Rights Act is widely regarded as the most important law passed since World War II. The simple idea that employees should be able to sue for discrimination in employment is of course the heart of that law. But more than half of U.S. employees have no right to sue for sexual orientation discrimination. Refusing to hire someone because of his or her sexual orientation is wrong and there is now something that we can do about. Please ask your boss to license the mark. Or if you’re on the board of a non-profit that hires a few people, ask the board if it will promise not to discriminate.

If interested, you can catch us in person at one of the following book events:

Wed. June 8, 7 p.m.
A Different Light Bookstore
489 Castro Street
San Francisco, CA 94114
(415) 431-0891

Sat., June 18, 3 p.m.
Chicago PFLAG
Sidetrack
3349 N. Halsted St.
Chicago, IL
(773) 472-3079

Sun. June 19, 11:30 a.m.
William Way Community Center
1315 Spruce Street
Philadelphia, PA 19107
(215) 732-2220

Sat. June 25th, 2 p.m.
Yale Bookstore
77 Broadway
New Haven, CT 06511
(203) 777-8440

Tue., June 28th
Human Rights Campaign
Washington D.C.
(202) 628-4160
www.hrc.org
Details to be announced

The week has flown by. We leave much richer thanks to you. So Long.

Ian Ayres & Jennifer Gerarda Brown

I’ve just published a book called Optional Law: The Structure of Legal Entitlements (University of Chicago Press) that not only formalizes the advantage of optional licenses but also shows there’s a dizzying array of optional entitlement structures that can dominate traditional notions of property. The book suggests a variety of new mechanisms for protecting IP and shows how many of them have been used in unnoticed ways in traditional common law decisionmaking.

Conceptually, this book asks how a court might want to allocate entitlements among individuals when the court is imperfectly informed about the individuals’ values. Imagine that a court is trying to decide which of two disputants should control a particular entitlement. Each disputant knows her own value for the entitlement, but the court sees only an unbiased probability function of each disputant’s value. The court, among other things, wants the entitlement controlled by the higher-valuing disputant.

How should the court structure the parties’ legal entitlements? A first intuition is that the court should simply give the entitlement to the individual with the higher expected value. This “mean” allocation rule would make a great deal of sense if the court were merely choosing among property rules; but we will see — through the lens of option theory — that giving the initial entitlement to the disputant who is, on average, lower-valuing can at times produce higher allocative efficiency.

Imagine for example that a court’s best guess is that a plaintiff’s value is equally likely to take on any value between 5 and 105 and that a defendant’s value is equally likely to take on any value between 40 and 60. You might think that the court would do better to give the entitlement to the plaintiff (who has a higher average valuation of 55 instead of 50). But it turns out that efficiency is substantially increased if we give the entitlement initially to the defendant but give the plaintiff the option to take for a price of 50 dollars.

This result is, of course, counter intuitive. But there are a bunch of others as well:

Where there are calls, there must be puts. Once traditional liability rules are seen as “call” options, it is natural to ask whether “put” options are or should be used by the law. Calabresi and Melamed saw that defendant polluters might pay for the right to pollute or that plaintiff pollutees might pay for the right to stop pollution, but they did not focus on who gets to decide whether payment would be made. Traditional liability rules are more like call options because they give the payor the option of forcing a sale. But it is also possible to give payees the put-like option of forcing a purchase. Instead of giving a polluter the option to pay for the right to pollute, the law might give a pollutee the option to be paid for giving up her entitlement to clean air. Put-like protections for pollutees seem startling, but they in fact are the normal “election of remedies” granted to a plaintiff whose property rights have been infringed upon. For example, if the polluter instead builds an encroaching fence on the pollutee’s land, it would be normal to give the pollutee the choice of injunction or permanent damages for the encroachment.

Courts can decouple distributive and allocative concerns. Appreciating the possibility of put options is the first step in expanding a courts’ choice set. Allowing a defendant to pollute if she chooses to pay a million dollars should produce the same allocative equilibrium as giving the defendant a put option to sell her pollution right for a million dollars, but very different wealth distributions. Indeed, there are an infinite number of option implementations that produce the same allocative equilibrium, but merely divide the expected payoffs differently between the disputants. For example, asking the defendant to choose between paying $800,000 to pollute and receiving $200,000 to forego polluting should produce an identical allocation as the foregoing call and put implementation but provides an intermediate distribution of payoffs. Enlightened courts are thus free to maximize allocative efficiency (by delegating the allocative choice to the more efficient litigant) without sacrificing concerns of equity or ex ante investment incentives.

Two heads can be better than one. While traditional liability rules delegate the allocation choice to a single-chooser (either the plaintiff or the defendant), it turns out that it is also possible for courts to create an option that delegates the allocational choice to both parties — by allowing either disputant to veto a particular allocation. For example, a court might grant an initial entitlement to the plaintiff but give the defendant a call option to take the entitlement for $X, and give the plaintiff an entitlement to take back for $X or for $X + Y. “Dual chooser” rules of this kind can produce, under certain conditions, systematically higher expected payoffs than more traditional single-chooser rules. They give both parties a hand in deciding who will ultimately control the entitlement and thus can harness both sides’ information. And as with put option rules, it turns out that dual chooser rules are already being used in the common law.

Property protection has been with us for a long time. But optional protections have a lot going for them. They can better harness the parties’ private information, they can better promote equity and they might can even better promote trade.

You can read the first chapter here for free or (gulp) buy a copy of the book here and read comments on a earlier Balkinization post here.

Ian Ayres

Less noted has been the new and difficult choice presented to heterosexual couples: Now that it is possible to marry in a jurisdiction that does not discriminate on the basis of sexual orientation, is it moral for heterosexuals to marry in discriminating states?

To understand this dilemma, imagine you were living in Virginia when the state still prohibited interracial marriage. Even if you wanted to marry someone of the same race, wouldn’t you consider traveling to a neighboring state that did not discriminate?

From now on, every heterosexual couple that wants to marry must face the same question. After all, they can marry in Massachusetts knowing their new status will be fully recognized at home. And Massachusetts will not invoke its hateful 1913 “reverse evasion statute” to turn away heterosexual couples, as it has some out-of-state same-sex couples.

Some will protest that planning a wedding is tough enough; requiring long distance planning is unrealistic. But for many couples, Massachusetts is only a short drive away. What if a couple lives across the road from Massachusetts? Or ten miles away? At some point, the distance becomes small enough that people who care about equality should be embarrassed not to make the journey.

Moreover, the truth is that for decades, couples have taken their weddings on the road, marrying in, say, Hawaii for scenery or Las Vegas for kitsch. Now they can travel for a different value: equality. It helps that Cape Cod, the Berkshires, and Boston’s historic neighborhoods offer lovely venues for weddings and receptions. Mitt Romney said he did not want Massachusetts to become the Las Vegas of “gay marriages.” But legalizing same-sex marriages could also make Massachusetts the Las Vegas of straight ally marriages – as “hetero holdouts” travel to the Commonwealth to avoid marrying in a discriminatory jurisdiction.

The choices created by Massachusetts marriage equality do not end with travel plans. Even couples who marry at home in discriminating states have some decisions to make. Consider the wedding invitation itself. Even though most LGBT people would never think of raising the issue with their marrying heterosexual friends, they could quite reasonably harbor feelings of disquiet and pain that they are excluded from the very institution they are asked to celebrate. One might think that marriage rights for same-sex couples in some jurisdictions would reduce such feelings of pain and resentment. But a couple’s choice to marry in a discriminatory state even as non-discriminatory options become more readily available may exacerbate negative feelings.

Perhaps a personal note could accompany invitations to gay and lesbian friends. A couple could apologize for marrying in a state or church where their friends cannot. An explanation, such as concern for a sick parent who cannot travel to Massachusetts, might also help.

Couples make all sorts of choices about their ceremony. They could include a public statement of support – a prayer or blessing, for example — specifically acknowledging the love and commitment of gay and lesbian couples who cannot marry.

Heterosexuals who marry might devote some combination of time and money to work for change. As newlyweds, they could spend their honeymoon in Massachusetts and reward the state that has done the most to promote marriage equality. In lieu of gifts, couples might ask wedding guests to contribute to freedomtomarry.org or Gay & Lesbian Advocates & Defenders, the organization that won the Massachusetts case (and continues to fight for marriage equality). Even if the bride and groom don’t request it, wedding guests could donate on their own initiative, contributing in the couple’s honor. Guests can still buy a toaster or table cloth, but it makes sense to buy a slightly smaller gift and redistribute part of the money in the interest of people who are unfairly prohibited from marrying.

Even clergy people have decisions to make. For instance, in 2003 about a dozen clergy from Connecticut and Massachusetts refused to sign marriage licenses for heterosexual couples until unions between same-sex couples are legally recognized. Their motive was not to renounce the tainted benefits of discrimination, but to avoid facilitating the discrimination itself. There are always two ways to end disparate treatment; in a world where same-sex couples can’t marry, refusing to legally marry everyone does the trick.

Meanwhile, Massachusetts’ innovation gives all of us some choices. Supporters of gay rights, regardless of sexual orientation, may want to reward the state for its progressive stance. Instead of the negativism of boycotts, a grassroots campaign should declare a marriage “buycott.” Summer 2005 looks like a great time to visit Massachusetts.

A single state has provided a truly global public good. Massachusetts is offering the right to marry without regard to sexual orientation. The rest us of us are now challenged to construct an appropriate response.

If you own a patent, you can practice your own invention.
If you own copyrighted material, you can certainly publish and sell it.
If you own a trademark, you can certainly put it on your products.

In contrast, I think the certification mark is the only type of intellectual property that owners can’t use themselves. Owners are are only allowed to license the intellectual property to others

The owner of the Good Housekeeping Seal can’t put it on the its own products (such as the Good Housekeeping magazine). The idea is that it is too severe a conflict of interest to certify your own goods or services as complying with the requirements of the certification mark.

So what? Well sadly this means that Jennifer Brown and I are the only employers in the world that can’t use the Fair Employment license as a means of committing ourselves to non-discrimination.

And it’s interesting that the Fair Employment mark can potentially protect employees in other countries. That’s right. It’s not just away for any U.S. business to opt into ENDA, but the fair employment mark gives businesses in any other country an opportunity to make a legally binding commitment not to discriminate. Just as Jennifer and I can enter into a contract with an Italian business to buy flowers, we can enter into a contract with the same firm whereby we grant them a license to use the certification mark and they make a contractual promise not to discriminate.

So let us be clear. Non-U.S. readers of this blog, we welcome you to license the mark as well. Ask your boss if she is willing to promise not to discriminate. Of course, it might be unduly burdensome for Italian employees to sue in U.S. courts but some non-U.S. jurisdiction would even give local employees (third-party beneficiary) rights to sue at home based on business’s contract with us.

This imperialistic potential for the Fair Employment mark also suggests a dimension on which the mark is more powerful than a federal statute. The mark would allow non-US business to provide non-discrimination coverage for their workers. If ENDA was passed as federal legislation, it would mandate domestic compliance, but in contrast it wouldn’t even give foreign employers the option of having their employees coverage.

Maybe Congress should rethink the jurisdictional scope of its laws. Like the fair employment mark, maybe Congress should allow foreign businesses and individual to opt into certain U.S. regimes if they want to. If a non-US firm wants to be covered by Title VII’s prohibition of sex and race discrimination, maybe Congress should given them an option to opt into a contract with the United States. There might even be contexts where it would be in our interest for Congress to even allow opt-in enforcement. If a non-US firm said it wanted to be bound by the NLRA or Title VII, maybe it wouldn’t be bad to empower the NLRB or EEOC to enforce the promise – analogous to the way that traditional certification mark owners certify compliance with their marks.

2. We’ll send a free book to the person who gets the largest number of employees covered by the license in the next month.

3. We’ll send a free book to anyone who gets a business with more than 100 employees to license the mark.

To enter the contest 1) get a business/employer to license the mark on line at www.fairemploymentmark.org, 2) send an email to [email protected] with the subject line “free books” and tell me the names of the business or businesses that you got to license the mark as well as your mailing address. If the business has a webpage, please send a link for that as well.

I will check to see that the businesses did in fact license at our site.

As I said in an earlier post, the licensing agreement can provide protection for non-US employees. So this is a contest in which anyone in the world can participate.

Here’s a pre-emptive strike against those who will want to rail against the contest idea. The books aren’t really free – you have to do something to get them. But that something is trying to provide others with a basic civil right – a legal remedy for the harms of discrimination.

Jennifer and I will provide a lot (but not all) of the book’s ideas for free in the coming week. We should have talked with Princeton University Press about the idea of making the entire book available — at least for a limited time. But we are willing to spend our own money (and believe me these books are not free to us either) to try to launch the mark by getting some more licensees.

Take for example my church . . .

I’m Episcopalian (and have been teaching Sunday school for the last three years). The Episcopalian Church still discriminates against same sex couples. I can religiously marry the woman I love, but my sister who is gay cannot religiously marry the woman that she loves.

[Now some readers do not accept the characterization of this marriage prohibition as being a type of discrimination. But imagine for moment that you did consider it to be a form of invidious discrimination. Or imagine for a moment that the church that you loved engaged in a form of invidious discrimination on some other dimension (such as gender).]

What should I do in response to this discrimination? Well, Jennifer and I worked hard in getting the vestry of our local parish, St. Thomas in New Haven, to pass a resolution requesting that the clergy of the parish consider same-sex candidates for marriage on the same basis as different-sex candidates. The movement for the resolution was spear-headed by a group of heterosexual couples who wanted their children to grow in a church that truly embraced equality.

But the Bishop in short order called us on the carpet saying that Canon law did not allow same-sex marriage. He forbade us from ending the discrimination by religiously marrying same-sex couples.

This is a point where the moral duty to warn kicks in. My parish was prohibited from marrying same-sex couples, but neither the bishop nor the cannon law prohibit us from warning potential members that the Episcopalian church treats same-sex couples differently than different sex couples. We might even require our current members to sign statements acknowledging that they are choosing to associate with an organization that discriminates on the basis of sexual orientation with regard to marriage.

Isn’t there a moral duty to warn people about things that they might find repugnant — especially if you find it repugnant? Reasonable people can make different choices about whether it is appropriate to work for change inside or outside a discriminatory organization. But if you’re working for change inside, you should at least let a potential member know that he or she is making this kind of choice.

Just the act of private acknowledgement is a power force for change. Few organizations or people could distribute such warnings or make such acknowledgements without doing something more.

Indeed, it natural to move from acknowledgement to apology and action — the three A’s. A church in warning about its mandated policies of discrimination would have a powerful calling to go forward and apologize for the discrimination that it is for the moment saddled with. And ultimately acknowledgement and apology would be a powerful impetus for action to change the underlying discrimination itself. Acknowledgement and apology is not a stable equilibrium – something has to give.

It’s hard to acknowledge that you associate with a discriminatory organization. Here’s a personal exercise that you can complete right now in the privacy of your home or cubicle. Do you attend a church that discriminates on the basis of sexual orientation on whom it will marry? Can you bring yourself to literally sign your names to these words: “I acknowledge that I am choosing to associate with a church that discriminates on the basis of sexual orientation”?

Here’s a confession. Jennifer and I believed that we were doing this, but we couldn’t bring ourselves to put pen to paper.

We delivered from this dilemma by Rector. The bishop wouldn’t let us marry same sex couples. But Father Michael Ray ended discrimination another way. For now, St. Thomas will not marry either same- or different-sex couples.

But here’s an informational proposal for dealing with the Boy Scouts’ discrimination that promotes both honesty and informed association.

The Supreme Court in 2000 struck down the application of New Jersey’s civil rights statute as applied to the Boy Scouts. If a private organization wants to discriminate against gays, the Court found they have a constitutional right to do so.

Jennifer and I in the book and in an article at AlterNet argue that New Jersey might pass a new statute that mandates a private conversation between organizations that wish to retain the right to discriminate and their potential members. The organization would have to privately disclose to potential members that it discriminates AND members would have to privately sign an acknowledgement (which would be kept on file by the organization for the possibility of in camera court review) that they wish to associate with an organization that retains the right to discriminate.

Lots of people worry that public disclosure would chill associational rights. I might be deterred from joining an unpopular group if the public get to know about it and harass me.

But requiring a private conversation of this kind facilitates freedom of association. The right to association is also the right of people not to (unwittingly) associate with organizations that have policies that they view to be repugnant.

Or to put it another way, our contractual silences always have some default meaning. Right now in New Jersey, if a private organization remains silent about discrimination when speaking to its members, this means they retain the option of discriminating on the basis of sexual orientation. There is no constitutional reason why the New Jersey legislature can’t flip this default. They could ordain that private organizations that fail to privately disclose (and obtain acknowledgements about) their policies that are in derogation of general civil rights restrictions will be deemed to accept those restrictions.

Ian Ayres

But it turns out that there are lots of parallel reasons why adopting these licenses make plenty of sense.

First and foremost, committing to equality is good business. 88% of the public opposes employment discrimination against gay and lesbian workers. And licensing the fair employment mark could be a great recruiting tool. [The parallel here is that giving away part of your copyright bundle of rights can still let you sell books or services or get your ideas out in ways that can produce revenue.]

The cost of allowing private suits is incredibly low. The GAO studied 11 states which had already prohibited employer discrimination. In the average year only 6/100th of a percent of employees brought claims of sexual orientation discrimination. Even if an average claim costs an employer $100,000, this would represent an extra cost per employee of only $1.67 per year. Employers who voluntarily sign up are even less likely to face liability. Employers who operate in the 15 states and dozens of municipalities that independently prohibit this type of discrimination have no additional exposure. [The parallel here is that there are plenty of copyrights that would never have produced revenue anyway — so you have nothing to lose by giving it away.]

Most importantly, promising not to discriminate is the right thing to do. Licensing the mark doesn’t mean that an employer can’t contest claims of discrimination. It just means that the business can’t stand up in court and say “we have a right to discriminate against gay and lesbian employees if we feel like it.” [The parallel is the most obvious — setting copyright information free is a powerful engine for social good.]

Employers that are committed to the idea of employment equality for gay and lesbian workers don’t have to wait for federal or state legislation. They can privately adopt the legislation themselves.

You can learn more about the mark either in Chapter 4 of our new book or in this draft law review article.

The idea is simple, really. By signing the licensing agreement, an employer gains the right (but not the obligation) to use the mark and in return promises to abide by the word-for-word strictures of ENDA (the proposed federal statute that would prohibit employment discrimination on the basis of sexual orientation). Displaying the mark on a product or service signals to knowing consumers and employees that the company has committed itself not to discriminate on the basis of sexual orientation.

Other certification marks (such as the Good Housekeeping Seal, the Underwriters Laboratory, and the Orthodox Union marks) require the mark holder to police the certification to insure compliance with the requirements of the licensing agreement. But the licensing agreement for the Fair Employment mark allows employees and applicants to enforce the ENDA duties directly as express third-party beneficiaries of the agreement. The Fair Employment mark thus replicates the core enforcement mechanism of ENDA by creating private causes of action in the same class of individuals who would gain protection under the statute.

The license is also incredibly transparent. No need to worry that Ayres and Brown will be litigious or hold up licensees for money. We disclaim any personal right to sue for breach of the non-discrimination promise and licensees can terminate their license at anytime. It is clear we are not profiting from this venture because we charge no licensing fee. The substance of the licensees’ duties is also clear. We did not try to improve on ENDA, just to copy it. Since ENDA requires a filing of claims within 180 days, so does our license. Since ENDA would allow arbitration agreements, our license would as well.

The mark represents an incremental strategy in the struggle for equality. Most importantly, the mark holds out the possibility of extending substantive ENDA rights – especially rights to sue for discrimination – to potentially millions of workers and applicants who are currently uncovered.

But the mark also provides a “demonstration” effect. It provides Congress with information that might quell concerns about ENDA. The mark provides a mechanism for producing case law about the language of a statute before the statute is ever enacted. The mark thus provides legislators with information about the ways a statute might be interpreted by courts, as well as the rates of litigation the statute might engender.

It is somewhat surprising, but to the best of our knowledge, this license is the first time that private contractors have intentionally taken the language of proposed legislation and inserted it into private agreement.

People in the United States strongly support the simple idea that employers should not discriminate against gays and lesbians. In a 2003 Gallup poll, a whopping 88 percent of respondents said that “homosexuals should . . . have equal rights in terms of job opportunities.” Even prominent conservatives — such as George W. Bush — at least give lip service to the idea that employment discrimination on the basis of sexual orientation is wrong.

But gay rights advocates have made only limited legislative progress on this issue. Fifteen “blue” states have prohibited employment discrimination against gays and lesbians. At the federal level, the “Employment Non-Discrimination Act” (ENDA) has been introduced several times in Congress without success. ENDA has virtually no chance of passing during the Bush administration.

A boatload of prominent corporations – including the likes of AT&T, Coors, IBM and General Mills – have already come out and endorsed ENDA. Virtually all the corporate endorsers of ENDA already have nondiscrimination policies that include sexual orientation. But the pretty words of nondiscrimination policies sometimes turn out to be only that. If an employer discriminates against an applicant because she is gay, it is far from certain that the employer would be liable for breach of contract – even if the employer has a non-discrimination policy.

Lots of businesses say they oppose this kind of discrimination. They adopt policies and endorse ENDA. Few employers, given the chance, would opt out of race discrimination laws. Few employers would opt out of ENDA if a waivable version were enacted. Now, with the Fair Employment mark, they have the opportunity to opt in.