This study examines whether labor plays a role in corporate governance by disciplining opportunistic insider trading behavior. We find that firms with organized labor experience statistically significant declines in both opportunistic insider trading activity and profitability through the employee welfare channel, labor unions' initiated shareholder proposals, and external mechanisms, including media and political support. The baseline evidence is robust to possible endogeneity concerns, alternative measures of insider trading activity, and conventional corporate governance measures. Further analyses suggest that labor's corporate governance reduces the incidence of illegal insider trading, enhances rm productivity and performance, and lowers the return predictive
power of insider trades. 

Keywords: Opportunistic Insider Trading; Labor Unions; Employees; Employee Opportunism; Corporate Governance
JEL Classification Number: G14; G31; M54​