If the fines are meaningful, they'll primarily hurt shareholders. It's possible a corporation will try to mitigate some of the costs by downsizing, but that's no different from any other corporation with a non-working business plan.

Sparing shareholders for the costs of the choices their leadership made is a recipe for continued disinterest. Why bother appointing boards and CEO's that will avoid this stuff if they're always able to shift the costs to somebody else?

Just because a company has employees does not mean it appropriate to shield it from consequences of its actions.

> If the fines are meaningful, they'll primarily hurt shareholders.

I’m just not so sure this is true. What kind of fine would hurt shareholders more than the employees that are let go to offset said fine?

At least currently, reputation is not represented in the tech market prices. Microsoft had a major security breach in separate products every 4 months last year, and opened this year by shuttering and laying off a large number of recently acquired game studios.

They are currently one of the 2 most valuable companies in the world by market cap.

What kind of fine could you throw at them?

Ideally, the labor market is competitive. If a company tries to offload it's legal costs to its employees, they'll find work elsewhere, at least in aggregate. Ideally (again), shareholders do not have that option.

When a company goes under or significantly downsizes there will of course be impacts on employees. But equally, their competitors' employees may thrive.

I want to stress again that the alternative is basically lawlessness. If a company cannot be held to account merely because doing so might hurt employees, then it's in shareholder's interest to ensure the company disregards those laws whenever they get in the way of profits - which they can do by selecting boards and CEOs that are willing to take "risks" (and it seems quite unlikely that's ever likely to change). Those agents of a company might not even be in the same jurisdiction as the law, so trying to exclusively hold them to account seems like a pipe dream.

In any case, if laws try to very narrowly focus liability, you're also asking for games of musical chairs, and because it's so easy to create and destroy corporations, that's a game that will often lead to evaporation of any penalties.

Shareholders absolutely need to be held to account for the choices their companies make. Even limited liability is a protection with some problematic consequences; we definitely shouldn't make it even easier than it already is to shift burdens onto others or society at large than it already is.

I still don’t see how fines would hurt shareholders, realistically.

We need some kind of punishment, which is why we have fines, but it’s good to recognize that, at least right now, they don’t really do the job they’re meant to do.

> In any case, if laws try to very narrowly focus liability, you're also asking for games of musical chairs

Yes, this is true. It’s a hard problem.

Fines could be used to bolster the state's unemployment program and/or provide continuing health insurance to laid off employees. If a company can only maintain its staff size with illegal practices, then we shouldn't expect it to maintain that staff size.

"You can't punish me because I'll just punish the little guys" is an awful defense.