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The Monitor-“Client” Relationship

After the government discovers wrongdoing by a corporation, the corporation and the government often enter into an agreement stating that the corporation will retain a “monitor.” A corporate compliance monitor, unlike the gatekeeper, is not charged with “monitoring” the corporation in an attempt to detect and prevent wrongdoing. A monitor, unlike the probation officer, is not solely charged with ensuring that the corporation complies with a previously determined set of requirements. Instead, a corporate compliance monitor is responsible for (1) investigating the extent of the wrongdoing already detected and reported to the government; (2) discovering the cause of the corporation’s compliance failure; and (3) analyzing the corporation’s business needs against the appropriate legal and regulatory requirements. A monitor then provides recommendations to the corporation and the government meant to assist the corporation in its efforts to improve its legal and regulatory compliance—the monitor engages in legal counseling. The ad hoc structure of monitorships has, however, failed to facilitate the monitor’s function as a legal counselor. This failure is largely the result of structuring monitorships in an environment lacking binding rules and conceiving of monitorships as if a monitor’s only function is that of a governmental agent.

Yet the current monitorship structure is not necessary to achieve the monitorship’s goal, which is to establish a corporate compliance structure that deters and prevents future misconduct. This Article argues that providing a set of clear, enforceable, predictable rules regarding the scope of monitorships that facilitate a monitor’s function as a legal counselor will improve the long-term effectiveness of monitorships. This Article suggests one mechanism for achieving this goal—a statutory privilege—aimed at encouraging a formalized relationship amongst a monitor, the government, and the corporation, which re-conceptualizes the relationship as “The Monitor-‘Client’ Relationship.”

The Hidden Nature of Executive Retirement Pay

There are two competing theories of why public companies pay executives generous retirement benefits. One is that retirement pay is easier to hide from shareholders than other forms of compensation. The other is that retirement benefits align executives’ interests with those of long-term creditors, since the executives may not receive their payouts if the firm goes bankrupt. The latter view depends on the assumption that retirement benefits put executives in a similar contractual position as the company’s creditors. Yet no previous work has tested that assumption.

This Article provides the first systematic study of the contractual structure of executive retirement payouts. Using retirement pay data for thousands of executives, we show that a large proportion of executives link the value of their payouts to the company’s stock price and receive the bulk of these payouts immediately following their departure—features that contradict the incentive-alignment theory of retirement pay. The evidence also shows that the full amount and structure of retirement pay are undisclosed—findings consistent with the camouflage theory. While the structure of some executives’ payouts can be reconciled with the incentive-alignment theory, current rules do not give investors the information they need to tell the difference between payouts that align incentives and those that camouflage compensation. Lawmakers should require companies to reveal the structure of these payouts, and neither regulators nor commentators should assume that retirement benefits suppress top managers’ appetite for risk.

Common Sense about Common Decency: Promoting a New Standard for Guard-on-Inmate Sexual Abuse under the Eighth Amendment

When inmates claim they are sexually abused by their prison guards, many courts scrutinize their claims to determine, as a threshold inquiry, whether they allege objectively serious injury. Courts often hold that guard-on-inmate sexual abuse does not inflict that level of injury, and therefore does not violate the Eighth Amendment or impose cruel and unusual punishment.

The dominant body of law arrives at the wrong conclusion because it focuses on the wrong question.  It asks whether guard-on-inmate sexual abuse imposes a threshold level of physical or psychological harm on an inmate. Instead, Eighth Amendment case law should simply ask whether a guard’s sexual abuse of an inmate, as specifically defined in current federal law, can be justified by any legitimate prison-management purpose. If it cannot, the law should presume that guard-on-inmate conduct violates contemporary standards of decency, and thus violates the Eighth Amendment.

This Note will demonstrate that courts’ misdirected focus has negative ramifications beyond its maladjustment to our society’s contemporary standards of decency. First, courts are less likely to find that male inmates meet the injury threshold. Consequently, the dominant standard often results in male inmates receiving less recognition and relief than female or transgender inmates for psychological injuries suffered from sexual abuse. Second, this disparate treatment and certain language in the case law promote a discourse about gender that proves problematic for men, women, and transgender persons alike.

Through this Note, I offer two fairly simple solutions to eliminate this disparate treatment and adjust Eighth Amendment standards to more closely correspond with current sexual abuse law and societal norms. Using emerging case law and Supreme Court precedent, I enumerate specific standards that advocates and courts can use to properly redirect the focus of the Eighth Amendment inquiry from the injury threshold to whether contemporary standards of decency have been violated by guard-on-inmate sexual abuse. State and federal law show our current societal norms deeply condemn such abuse, and suggest courts should presume violations of contemporary standards of decency in specified circumstances of sexual abuse.

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