Corporate Criminal Law Is Too Broad -- Worse, It's Too Narrow
Will Thomas, Assistant Professor of Business Law, Ross School of Business
The federal criminal law of organizations is built atop a doctrinal foundation of respondeat superior, whereby a commercial entity (like a corporation) can be held responsible for criminal misconduct carried out by any one of its employees. Since its inception over a century ago, this doctrine of organizational respondeat superior has been criticized for exposing commercial organizations to more criminal liability than is either just or efficient. Organizational respondeat superior is understood to be overbroad—that is, the doctrine is overinclusive of instances that we might consider giving rise to genuine institutional fault.
Recently, several scholars have noticed a long-overlooked, symmetric problem: organizational respondeat superior is not just overinclusive, but underinclusive as well. That is, in addition to capturing too much conduct under its ambit, organizational criminal liability also captures too little misconduct. But not all symmetries are created equal. The ambition of Professor Thomas' project is to show that this formal symmetry belies a deep, substantive asymmetry: organizational respondeat superior’s underbreadth problem is qualitatively worse than its overbreadth problem. Professor Thomas says this not because there are potential cases beyond the reach of the criminal law, but because the sorts of cases that organizational respondeat superior puts beyond the criminal law should be seen as ur-instances of organizational wrongdoing. For a legal perspective, this finding suggests that the criminal justice system reaches certain important cases of genuine institutional fault either not at all, or else only pretextually. From a commercial perspective, this finding raises a serious concern for how corporate America designs its compliance programs.