Freedom of speech in business: Does it exist? Is it important?

Exemptions to First Amendment right to free speech are a complicated and often misunderstood concept

Matthew Blum

With presidential elections approaching in November, and the wealth of political controversies taking up the headlines in recent months, it seems like a good time to consider the implications of free speech as it relates businesses. The First Amendment right to free speech is a complicated and often misunderstood concept. In our business practices, it is not only important to be mindful of what this right means, but also how that meaning is subject to change.

First, it is important to understand that the First Amendment only limits government infringement on speech. All too often, I have heard the argument that firing an employee for a political statement is a violation of free speech. Generally speaking, it is not. The same concept applies to your friends, colleagues, church groups, golf clubs, etc. The First Amendment does not give every United States citizen the right to express themselves however they would like, without fear of consequences from other citizens. In this day and age, where opinions are so readily available via the internet, one unpopular tweet can result in a firestorm of negative reviews for your business. That is just the reality of today’s market, and something that most have accepted.

Second, when it comes to government restriction of speech in the business world, it is also important to understand that speech in business is less protected than other areas of speech. Businesses are subject to consumer protection laws, trademark and copyright laws, regulatory agencies, employment discrimination laws, etc. How is this possible under the First Amendment? The answer is that there are many exceptions that have been developed by the courts, specifically applicable to the world of business.

“Commercial speech,” or speech that is purely profit driven in nature, was first singled out in 1942 in the case of Valentine v. Chrestensen, 316 U.S. 52 (1942). In the Valentine case, the U.S. Supreme Court identified commercial speech as exempt from freedom of speech protection. The protection for commercial speech then shifted in 1980 with the case of Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980). In that case, the Supreme Court recognized commercial speech as an area of speech that receives lesser protection, but created a four-pronged test to determine whether a law violates freedom of speech. This test asks initially (1) whether the commercial speech at issue is protected by the First Amendment (whether it concerns a lawful activity and is not misleading) and (2) whether the asserted governmental interest in restricting it is substantial. If both inquiries yield positive answers, then to be constitutional the restriction must (3) directly advance the governmental interest asserted and (4) be not more extensive than is necessary to serve that interest.

In addition to the “commercial speech” exception, there are also many other exceptions that authorize the government to restrict speech. Those exceptions include: 1) Advocacy of the Use of Force; 2) False Statements of Fact; 3) Obscenity; 4) Child Pornography; 5) Fighting Words and Offensive Speech; 6) Speech Owned by Others; and 7) Restrictions Based Upon Special Capacity of Government. While not all of these exceptions apply in the business world, many of the exceptions do apply on a regular basis. False statements are heavily regulated by the Consumer Protection Act. Speech owned by others is regulated by trademark, copyright and patent law.

Even when a specific exception is not met, the government may still restrain speech in various ways, depending on the means utilized. “Content” based restrictions, or restrictions that prohibit expression of certain viewpoints, are subject to “strict scrutiny” and are only allowed if they fall into special categories of exception. In contrast, a restriction based on time, manner or place on speech must only pass “intermediate scrutiny.” These types of restrictions may be upheld if they are: 1) content neutral, 2) narrowly tailored, 3) serve a significant government interest and 4) leave open alternate channels of communication.

So what does that mean for your business? If restrictions on speech are so common in the business world, how does this right help us in our daily practice? Well, if history has shown us anything about this right, it is that while the majority of new laws adhere closely to a clearly identified exception, laws are passed from time to time that do not. Either they are overly broad, or incorporate some otherwise prohibited restriction on speech. These laws may be burdensome to your business, but will remain in place until they are challenged in court.

While court decisions often have limited application, the decision to overturn a law will also sometimes have a ripple effect on constitutional law moving forward. For example, a lot of attention was garnered by the 2015 case of Reed v. Town of Gilbert,135 S. Ct. 2218 (2015). The case struck down a law enacted by the Town of Gilbert restricting display of signs without a permit, but provided exemptions for 23 different types of signs based on the “topic” that the sign addressed. While the court’s decision to strike down the law was not particularly controversial, the characterization of “topic” based restrictions as an impermissible “content” based restriction has serious implications. The case seemed to expand the First Amendment, which previously focused on whether laws restricted specific “viewpoints.”

Whether cases like Reed will actually result in a broader change to the law remains to be seen. However, it is clear that while protections for commercial speech have been limited in years’ past, the recent trend appears to be for greater protection in business dealings.

Matthew T. Blum is an attorney for the Law Offices of Carolyn M. Drew, P.S., focusing on family law, estate planning and probate matters. He can be reached at 360.690.0822 or matt@carolynmdrew.com. You can learn more about Blum at www.carolynmdrew.com. The above editorial contains general information and not legal advice. If you have questions about specifics of your own case, you should consult with an attorney.

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