TheCorporateCounsel.net

The intro to a recent Covington alert made me thankful I’m not navigating political law issues in my day-to-day. Here it is:

With Election Day fast approaching, corporations face increasing pressure from both internal and external forces to make legal decisions about political activities. This can be a fraught area of law, with little understood, highly technical regulatory issues that vary significantly across jurisdictions. Corporate counsel should be mindful of common—and sometimes complicated—political law traps.

The alert lists seven areas for corporations to monitor and best practices to pursue in an election year. Here are two of the timely reminders:

Contribution Reimbursement

Almost every jurisdiction prohibits contributions that are made in the name of another. Therefore, a corporation (or any other person) should never fund a contribution made by one of its employees or any other person, whether through reimbursement, advance, “bonus,” or other funds given with an understanding or expectation they will pay for a contribution that has or will occur. Doing so exposes a company and its executives to criminal penalties. Corporations have sometimes inadvertently reimbursed employees’ political contributions through the corporate expense reimbursement system, and care should be taken to ensure that such systems do not allow for expensing of contributions.

Policies Around Voting

Any company policies regarding voting and elections should be reviewed by counsel to ensure they are consistent with current laws concerning political activity. For example, voter registration drives can be subject to complicated state regulations. Providing gifts or other things of value to encourage voting may raise issues under federal and state laws meant to prohibit vote buying or influence. Additionally, some state employment and labor laws, such as California’s Labor Code, include restrictions on an employer’s efforts to influence employee political behavior. Corporations that do not already have compliance policies governing corporate and employee political activity should consider adopting such policies now.

– Meredith Ervine