Bankrolling Corporate Campaigns 
Unions often launch corporate campaigns against companies as a loss leader. The way the process works is they pick a target company or industry and then start looking for potential areas to attack. For example, unions often file nuisance lawsuits or shareholder actions in the hope of eventually organizing new dues-paying members. But they know that their odds of success in these “outside-in” campaigns aren’t great. Yet imagine if unions could actually profit (in the short term) from launching corporate campaigns against employers? Scary thought, huh? Well, a recent New York Times article outlines exactly how that could work. A new billion dollar industry in bankrolling lawsuits has emerged over the last few years. Banks, hedge funds and private investors are bankrolling other people’s lawsuits including class actions and shareholder lawsuits against corporations. Their hope is that they can share in the potential winnings. The business is booming because the payoffs are huge. One of the cases described in the article a bank loaned $35 million to the plaintiffs in a lawsuit regarding work at ground zero. They made $11 million on the deal – 31% return. It isn’t a huge leap to see how unions might employ the same strategy to generate profits in potential corporate campaigns. Instead of home-brewing their own “nuisance” lawsuits, they just look for plaintiffs in current actions and offer to bankroll those cases. They then launch a corporate campaign on the other side, hoping perhaps that the pressure they are applying leads either to a settlement of the lawsuit or a bunch of new dues-paying members. Heads they win. Tails they win. There are numerous ethical issues involved in these, not the least of which is that right now the arrangements don’t have to be disclosed and sometimes the interest payments on the loans leave the “victorious” plaintiff with a bill instead of a check at the end of their suit. Several business groups are seeking to limit these activities. I encourage you to read the article and to think about how this could impact your own company. Unions aren’t doing a great job increasing revenue in their regular business operations (i.e. organizing new members or buying members of Congress). They are desperately looking for new revenue streams, and this one seems like a natural fit.
