Commercial Bribery: Choice and Measurement within a Remedies Smorgasbord

By Rendleman, Doug | Washington and Lee Law Review, January 1, 2017 | Go to article overview

Commercial Bribery: Choice and Measurement within a Remedies Smorgasbord


Rendleman, Doug, Washington and Lee Law Review


Table of Contents

I. Introduction.........371

A. Gift or Bribe?.......372

B. Civil and Criminal Remedies .......374

II. Civil Remedies: The Employer Sues the

Employee........381

A. Breach of Duty?........383

B. Salary Forfeiture..........389

C. Compensatory Damages........392

D. Restitution......394

E. Damages and Legal Restitution......400

F. Equitable Restitution......405

1. Constructive Trust.......405

2. Accounting-Disgorgement......410

3. Constructive Trust or Accounting?......416

III. Civil Remedies: The Employer Sues the Briber..427

A. The Briber's Duty?...........428

B. Compensatory Damages..........429

C. Unjust Enrichment, Restitution, and Disgorgement.......431

IV. Loose Ends.......437

V. Double Recovery, Punitive Damages, and Multiple Damages.......438

A. Employer Sues Both the Briber and the Employee...........438

B. Punitive Damages.........442

C. Multiplied Recovery............445

VI. Principled Choice and Measurement Decisions.........449

VII. Conclusion............462

I. Introduction

This Article will examine civil courts money remedies to deal with private commercial bribery through the lens of the following hypothetical.

Sam Sailer "gives" Ben Beyer's purchasing agent, Alice Aggie, a sound system worth $8,000. Sailer's "gratuity" facilitates Aggie's decision to buy Sailer's speakers to sell in Beyer's NoisiStan Stores. Beyer learns about Aggie's new speakers and consults a lawyer.

My Remedies course in the spring of 2014 spent two class sessions on commercial bribery.1 The students began the course thinking of Remedies law as having separate pigeonholes named contract and tort, law and equity, damages and restitution; overall, they were baffled during our commercial bribery sessions. My experience with commercial bribery in the classroom drew me to develop further the subject that David Mills and Robert Weisberg refer to as "a fascinatingly underexplored area."2

A. Gift or Bribe?

A bribe is a transfer that often takes the ostensible form of a gift. In property law, the elements of a gift are the donor's intent to give plus a transfer to the donee; a gift does not require an exchange of consideration.3 But a bribe concealed as a gift involves the parties' surreptitious exchange of consideration whereby the bribe recipient agrees to "earn" the transfer.4

In this shadow world, we inquire whether Sailer and Aggie created a corrupt bargain. Was Sailer's transfer to Aggie a gift that stemmed from his friendship and altruism? Or was it a bribe based on his self-interest? Was there a quid pro quo, Aggie's promise or a wink and nod? Standing alone, the parties' consideration may not be illegal on either side; but the addition of the bribe element is an illegal performance.5

Some employment-related transfers to agents are not bribes.6 A "gift" to an employee that her employer knows about- a tip, for example-is not a bribe.7 One rule of thumb is: "If you can eat it and drink it in a single sitting, it's not a bribe."8

In the grey area between a bribe and a gift, many "gifts" are based less on the "donor's" altruism than on his interest in obtaining the "donee's" goodwill in one form or another.9 On the "donee's" side, the human impulse to reciprocate may lead her to return the favor.10 A campaign contributor, for example, may have a disinterested policy goal. Chief Justice Roberts wrote that "spending large sums of money in connection with elections . . . does not give rise to . . . quid pro quo corruption."11 In the grey area, a contributor may achieve recognition or access that blends into influence and reciprocity. Or the contributor may cross the bribery line by conditioning his payment directly on the politician's specific vote on specific legislation.12

"At what point do the 'gifts' become so clearly transactional, however, that the behavior they induce is no longer viewed as altruistic, but crass? …

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