As long as there have been corporations in the United States, their shareholders (and later LLCs’ members) have largely been shielded from liability. This is unlikely to change. It is hard to imagine every John Q. Public who bought 20 shares of Coca-Cola on the stock exchange being personally sued for the company’s actions.
But the law is shifting nonetheless in an unsettling way. A few weeks ago, the NLRB announced that it would hold a franchisor to be a co-employer of its franchisees’ employees. That would make McDonalds Corporation potentially liable for any unfair labor action in any one of its restaurants, even though it does not own them. McDonalds and the franchises’ owners are different corporations and neither should be liable for the other’s actions. Yet the NLRB is attempting to bridge that gap.
In a nearly opposite case, a parent company was found liable for interfering with its own subsidiary’s contract. It is axiomatic that one cannot interfere with oneself. But the Court in that case held that even though the parent owned 100% of the subsidiary and had Directors in common, that rule did not apply. The Court kept the two corporate entities strictly separated.
In the middle, business attorneys wait for the other shoe to drop from the famous First Amendment cases of Citizens United and Hobby Lobby. In those cases, the Supreme Court confounded shareholders keeping their First Amendment rights even after organizing as a corporation, with the corporation itself, as a separate entity, having those same rights. Whether that will be seized on to more easily reach shareholders of closely held corporations in an attempt to bypass centuries of settled shareholders law remains to be seen. But surely, small businesses can use sharp attorneys in their corner.