Student Blog: Labor, Pension Funds, and Private Equity

by Joseph Baron, RBFL Student Editor


The seed for my note topic was planted before I even knew I wanted to be a lawyer.  I studied film as an undergrad and went out into the world with the hopes of one day directing an Oscar award-winning masterpiece.  With no industry contacts I had to hustle for work, but I networked my way onto the sets of some big shows in New York.  For the first year, the magic masked the brutality of reality—fourteen-plus hour days often in the elements making minimum wage. 

            My role as a production assistant was one of the few non-union positions on set and I felt voiceless.  I was envious of union crew members with their shop stewards and union reps to turn to when producers pushed the envelope.  As the years went on, I realized even despite union backing producers had all the power.  Sure, filming six-day weeks for sixteen-hours a day might cost the studio a fortune in overtime, but if a crew member raised safety concerns about that work-week, they wouldn’t be back.  Once reality set in, I knew I needed to get out.  That’s when I set my sights on law school.

            The summer before school, a friend of mine and I were chatting about the labor movement and pension funds.  I proposed labor could use that capital to push for pro-worker conditions.  When I got home that night, I looked up pension fund activism and stumbled on a book (coincidentally by BU Law professor David Webber) right on point.[1]  From there, I started thinking about the tools available to labor and what enduring structural changes would look like.

            Inspiration for the substantive structural change came from the German system of codetermination requiring employee representatives to serve on certain companies’ supervisory boards (similar to boards of directors for US companies).[2]  One knock on codetermination is that it only exists by fiat.[3]  Elizabeth Warren’s Accountable Capitalism Act would take the fiat road to transplanting codetermination to America, but I wondered if there could be another viable method via existing market mechanisms.[4]

            Once I finally started school and spent some time networking with corporate attorneys, I kept hearing about private equity funds.  My ears perked up whenever they mentioned that some of the big players in the private equity world were pension funds like CalPERS—that is where an amorphous seed of an idea began to sprout.  Can pension fund involvement with private equity be used as a vehicle to introduce codetermination into the American corporate governance structure?  Can they create their own funds to advance the idea? 

            As I further research those questions, some of the major issues that crop up surround the duty of loyalty and the pressure to consider returns above all else.  In developing my note, I will see if I can answer the questions of when and whether a pension fund can push a governance reform like codetermination through private equity fund vehicles.



[1]David H. Webber, The Rise of the Working-Class Shareholder:  Labor’s Last Best Weapon (2018).

[2]SeeSusan-Jacqueline Butler, Models of Modern Corporations: A Comparative Analysis of German and U.S. Corporate Structures, 17 Ariz. J. of Int’l & Comp. L.555, 561, 566 (2000).

[3]Michael C. Jensen & William H. Meckling, Rights and Production Functions: An Application to Labor-Managed Firms and Codetermination, 52 The J. of Bus.469, 473 (1979).

[4]Press Release, Elizabeth Warren, Warren Introduces Accountable Capitalism Act, (Aug. 15, 2018),

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