Communicating with the “Restricted Class”

Communicating with the “Restricted Class”

April 13, 2016, Covington Alert

Federal Election Commission (“FEC”) regulations permit a corporation to communicate with its “restricted” or “solicitable class” on any subject, including electoral advocacy and political fundraising. See 11 C.F.R. § 114.3(a). This includes solicitations of contributions to the corporation’s PAC. We frequently see questions arising about who falls within the restricted class in one of two contexts: (a) in an effort to ensure the class is not too narrowly defined, depriving the PAC of potential donors; and (b) when a company reads the definition of “professional or administrative personnel” in the statute to only be a question of whether the employee is “salaried” or not, not considering the second prong of the test described below.

Congress has defined a corporation’s restricted class as consisting of the following:

• The corporation’s “executive or administrative personnel.”
• The corporation’s “stockholders,” as defined by FEC regulations.
• Individuals who are members of the restricted class of any subsidiary, branch, division, or “affiliate” of the company (the FEC has a multi-part test for determining which entities count as affiliates”).
• Immediate family members of the above individuals.