Senate Judiciary Committee
J. Campbell Barker testifies before the Senate Judiciary Committee during his confirmation hearing to be U.S. district judge for the Eastern District of Texas, May 9, 2018.
We all know the drill by now: A federal agency finalizes a rule to make people’s lives a bit better, a business gets offended because the rule might slightly eat into their record profits, and the Chamber of Commerce files a lawsuit in Texas, automatically drawing a reliably conservative judge. It looks like we’re now going to have to add a part four to this pattern: The judge holds stocks in companies with a material interest in the rule.
Meet Judge J. Campbell Barker, a Donald Trump appointee who is presiding over the Chamber’s challenge to the Federal Trade Commission’s ban on noncompete agreements. The watchdog group Accountable.US revealed yesterday that Barker, as of his most recent financial disclosure form, which covers up to the end of 2022, owns as much as $665,000 in the stock of three companies that regularly use noncompetes to prevent employees from leaving for competitors.
This includes up to $65,000 in Amazon, which has routinely sued to enforce its noncompete agreements in the past; between $250,000 and $500,000 in Apple, which despite a no-poaching scandal when Steve Jobs was CEO continues to attack employees for breaking noncompete agreements; and between $50,000 and $100,000 in IBM, a board member of the Chamber of Commerce, which has also attempted to sue former employees for leaving for rivals.
Many of the Amazon, Apple, and IBM noncompete cases involved personnel whose agreements would likely still be enforceable under the FTC’s ban, as noncompetes for senior executives are grandfathered in. However, new senior executives would not have to sign noncompete agreements. The FTC ban still allows for litigation over the deliberate release of confidential information to competing firms, under trade secrets laws.
The Chamber of Commerce’s noncompete case is currently on hold because of the “first to file” rule. Ryan LLC, a tax services company run by a former tax adviser to Donald Trump, filed its challenge to the noncompete ban hours before the Chamber. Ryan LLC may or may not be a member of the Chamber, which would make consolidating the cases more likely. When Judge Barker asked Ryan whether they have membership in the Chamber, the company “refuse[d] to disclose” that information to the judge, according to a court filing.
After the Ryan case is adjudicated, it is expected that the Chamber’s case will resume, with Judge Barker as the presiding judge. “The corporate-funded U.S. Chamber is counting on Barker not to recuse despite his clear conflicts of interest,” said Liz Zelnick of Accountable.US. “It’s all part of the Chamber’s longtime legal strategy of venue shopping industry lawsuits in courtrooms of least resistance.”
Judge Barker’s financial disclosure is a case study in why judges should maybe not be allowed to own individual stocks. His holdings are not limited to Amazon, Apple, and IBM, but also include stock in AbbVie, American Electric Power, Caterpillar, CenterPoint Energy, Chevron, Clorox, Coinbase, Constellation Energy, Costco, Dominion Energy, Duke Energy, Entergy, ExxonMobil, FirstEnergy, International Paper, Johnson & Johnson, Kraft Heinz, Lockheed Martin, McDonald’s, Merck, Occidental Petroleum, Pfizer, Procter & Gamble, Royal Dutch Shell, Schlumberger, Southern Company, Target, Texas Instruments, and Walmart. These are held in five different brokerage accounts; in some cases, Barker holds stock in the same company in multiple accounts.
Chevron, Entergy, FirstEnergy, ExxonMobil, Royal Dutch Shell, Southern Company, and Texas Instruments have all disclosed in the recent past that they are members of the Chamber of Commerce, the plaintiff in the case.
Several of Barker’s stock holdings are in companies that were clients of the law firm Yetter Coleman, where he worked as an associate and then partner between 2011 and 2015. Those clients include Chevron and IBM, the Chamber board member with a history of using and enforcing noncompete agreements.
Barker also holds several cryptocurrencies, including Bitcoin, Ethereum, and Dogecoin.
This is a potential minefield of conflicts of interest for any federal judge. But that’s especially the case for any judge in federal district court in Texas, where every business group happily files with the secure knowledge that their judge will be as conservative and pro-business as all get-out.
Indeed, Judge Barker routinely rules in cases affecting big business. In 2021, he struck down the Biden administration’s eviction moratorium, which benefited landlords. Last year, he ruled against the Consumer Financial Protection Bureau’s attempts to enforce anti-discrimination laws in the banking industry through its examination manual. In March, he struck down the National Labor Relations Board’s joint-employer rule, which aims to hold franchisors accountable in matters of employment.
As you can see above, Judge Barker literally owns stock in McDonald’s (albeit less than $15,000 worth). His portfolio—unless he’s sold every one of those stocks in the past 16 months—is bound to run into the cases he hears on a regular basis.
It would obviously be less problematic if judges were confined to index funds. Judge Barker obviously sees their value, because he owns at least a half million dollars in them, according to the disclosure.
There is definitely an alternate universe where a judge’s financial ties to the businesses that have material interests in the cases he hears would be disqualifying. It’s just not the universe we live in, where recusals are entirely up to the conflicted judge in question.
