Olympia Business Watch

Supreme Court delivers 'sharp rebuke' to voters on tax limit

Yes. Yes. Yes. Yes. Yes.

Five times, Washington voters gave their approval to measures requiring a two-thirds vote of the state Legislature to raise taxes.

One time, a majority of nine state Supreme Court justices said "no," issuing a 6-3 ruling today that overturns Initiative 1053, the two-thirds tax measure that voters approved by nearly 64 percent in 2010.

And that's the opinion that prevails, at least for now.

The irony in the decision was not lost on Justice James Johnson who wrote in his dissenting opinion that the court's majority members claimed a "fear of tyrannical minority control" as a result of the two-thirds threshold.

And yet through a single decision, "a court of nine people (actually only six votes) is imposing their policy preferences over that of the 1,575,655 voters who passed Initiative 1053 and the millions who qualified and passed similar tax protections."

If the irony is noteworthy, so too is the fact that the court decided even to take up the issue.

Justice Charles Johnson observed in his written dissent that by doing so, the court had abandoned its longheld practice of staying above the political fray.

Employers face challenges in implementing Affordable Care Act requirements

Neil Trautwein, VP and employee benefits policy counsel with the National Retail Federation.

Neil Trautwein, VP and employee benefits policy counsel with the National Retail Federation, said employers face multiple challenges and will need to figure out how to adapt to requirements in the Affordable Care Act. Trautwein was one of several speakers today at the AWB Health Care Forum in Bellevue.

Trautwein says it’s a tough law to like and understand. The NRF is fiercely opposed to the law and believes it’s punitive, will hurt job creation and be too complex to administer. Regardless, since provisions are quickly coming to bear, employers need to be prepared to implement them.

“While this is the law of the land, we need to do our best to navigate the law,” said Trautwein.

Brunell: There is a better way to help convicted felons find a job

If a person with a criminal record is committed to changing his or her life, it's true that having a job will help pay the rent and put food on the table.

But a proposal from Seattle City Councilman Bruce Harrell that would essentially make convicted felons a new protected class of workers is fraught with problems, AWB President Don Brunell writes in his weekly column.

For starters, it jeopardizes any hope of establishing a trusting relationship between employer and employee by prohibiting employers from looking into a job applicant's criminal record until late in the hiring process and not allowing them to reject an applicant solely on criminal history.

It raises other questions, too, such as what happens if a felon hired pursuant to the law commits a crime on the job or with information gained through their employment. Will the city of Seattle grant employers immunity from liability?

And what happens when a convicted burglar applies for a job as a locksmith? A convicted sex offender wants a job installing home carpet? Or someone convicted of vehicular manslaughter wants a job driving a truck?

Harrell must answer all of the questions that his proposal raises before it moves forward, Brunell writes. 

Supreme Court says gas-tax lawsuit can proceed without tribes

The Washington Supreme Court sided with a coalition of gas station owners Thursday, ruling that a lawsuit the group filed over compacts between the state and some American Indian tribes can move forward even though the tribes are not a party to the suit.

The coalition filed suit in Grays Harbor Superior Court in 2010, arguing that the compacts -- which require the state to refund 75 percent of taxes collected at tribe-owned gas stations -- are unconstitutional.

But state attorneys argued successfully to have the case dismissed, saying it couldn't move forward without the tribes -- and the tribes could not be named as defendants because they have sovereign immunity.

AWB filed an amicus brief last year, urging the court to take up the case. The state, the brief argued, shouldn't be allowed to hide beyond the issue of tribal sovereignty.

"As representatives of one of the most taxed and regulated communities in Washington, AWB finds offensive the notion that state officers might act contrary to the constitution or contrary to state with respect to taxpayer money, but be insulated from any judicial check on that action simply because the illegality is with a sovereign entity within the state," wrote Kris Tefft, AWB's general counsel.

The court agreed, ruling 5-4 that the case should proceed.

"Sovereign immunity is meant to be raised as a shield by the tribe, not wielded as a sword by the State," Justice Debra Stephens wrote in the majority opinion.

The Washington Policy Center, which also filed amicus brief urging the court to review the case, blogs on the decision here.

Erik Smith at the Washington State Wire called the ruling a "major blow" to the deals that Gov. Chris Gregoire struck with the state's tribes.

The Associated Press covered the decision here, and The News Tribune's Jordan Schrader blogged on it here.

AWB files brief backing I-1053 supermajority to raise taxes

The Association of Washington Business filed a friend of the court brief Monday in support of Initiative 1053, the voter-approved measure requiring a two-thirds vote of the Legislature or a vote of the people to raise taxes.

The measure is under attack from an assortment of opponents who claim it prevented lawmakers from raising taxes during the 2011 legislation session in order to fund schools.

But the brief, written by Kris Tefft, AWB's general counsel, argues that neither I-1053 nor any of the three supermajority requirements that preceded it actually prevent lawmakers from raising taxes when there is sufficient support to do so.

In fact, lawmakers raised the very tax at issue in the I-1053 legal challenge with a two-thirds vote earlier this year.  

Instead, I-1053's opponents are merely "seeking an easier political environment in which to enact tax increases," the brief argues.

Three previous legal challenges have failed to overturn the right of the people to impose a supermajority requirement on the Legislature.

The Washington Supreme Court, which is scheduled to hear hear arguments next month on the latest challenge, should toss this one, as well, the brief argues.

In addition to calling out lawmakers for wanting an easier way to raise taxes, the brief highlights the tortured exchange on the House floor that was aimed at setting up the court challenge.

Opponents of I-1053 cite the failure of a specific piece of legislation, Substitute House Bill 2078, in their argument. But majority Democrats in the House were apparently more interested in orchestrating its failure than they were in making sure it passed, the brief argues.

"Rather than take actions that would have led to the passage of the measure, effort was instead invested in an elaborately choreographed set of colloquys preceding the floor vote, all evidently designed to tee up this specific legal dispute over the predestined failure of the measure," it states, adding that the website PubliCola confirmed that Democrats took the vote in order to set up the court challenge of I-1053.

"This is not a constitutional crisis," the brief states.

Oral arguments in the case are scheduled for Sept. 25, and it's on "expedited review," giving rise to speculation whether the court will render a decision prior to the Nov. 6 vote on Initiative 1185, whcih seeks to pick up where I-1053 left off, or prior to the start of the 2013 legislative session.

Jason Mercier of the Washington Policy Center blogs on the AWB brief here.

To view the orchestrated colloquy, click on the video below.

I-1053 legal challenge could make voters ask 'What's the use in voting?'

Voters could not have been more clear last fall on Initiative 1053, The Columbian editorial board wrote yesterday in response to the legal challenge brought this week against the measure.

In Clark County, home of Rep. Jim Moeller -- one of the dozen Democratic lawmakers who signed on as plaintiffs -- the initiative passed with a 71.3 percent approval, the paper writes.

The Columbian brings up the statistic after noting that Moeller's Web page includes this statement: "A big part of my job -- by the far most important part -- is listening to what Vancouver and othe Clark County folks have to say regarding the issues before us."

On I-1053, the people have spoken. Loud and clear. And with respect to a supermajority vote of legislators to raise taxes, they have spoken several times.

Is Moeller listening selectively, the paper asks?

Every time lawmakers overturn the will of the people, they risk alienating them -- possibly to the point that voters give up.

The paper concludes with this warning: "Legislators who disagree certainly have their right to pursue a legal remedy, but that doesn't make them right. And they do so at their own peril, as voters justifiably ask: 'What's the use in voting, if our voice will just be ignored?'"

 

Supreme Court: No Job Protection for Medical Marijuana Patient

Yesterday, the Washington Supreme Court issued a long-awaited decision in a case asking whether an employee may be fired for medical marijuana use under the state law authorizing qualifying patients to use the drug.

Employee Jane Roe, suing under a psuedonynm, was fired from Teletech, a Colorado-based call-center company with a location in Bremerton, after failing a drug test.  She failed the test because she used medical marijuana with a doctor's referral under the state's Medical Use of Marijuana Act (MUMA), passed by the voters in 1998.  

After her termination, Roe sued, claiming MUMA implicitly protects an employee's off-site use of medical marijuana, and that her termination was a wrongful discharge in violation of public policy supporting medical marijuana use.  Roe's suit was strongly supported by the American Civil Liberties Union.  Teletech was represented by AWB board member Stoel Rives LLP.

In an 8-1 decision written by the newest member of the court, Justice Charles Wiggins, the Supreme Court flatly rejected both contentions.  Analyzing the statute, the court reasoned that while it allows a defense against criminal prosecution for marijuana possession, nothing in the plain language or obvious intent of the law suggests employers would face legal liability for refusing to accommodate marijuana use by employees.

Brunell: Texas leads the nation in tort reform -- and jobs

Reckless lawsuits sometimes make headlines -- a woman is awarded $2.7 million after spilling coffee in her lap, a judge sues a dry cleaner for $54 million for losing his pants.

But each year tens of thousands of anonymous lawsuits choke our court systems, AWB President Don Brunell writes in his weekly column.

And they're not all harmless cases that are quickly dismissed.

Even dismissed lawsuits are expensive and all of us pay the price for this abuse whether we realize it or not, Brunell writes.

In Texas, where officials are pursuing an aggressive -- and successful -- pro-growth, pro-jobs agenda, Gov. Rick Perry recently signed a tort reform law includes a provision requiring the loser to pay court costs and attorney fees of the other party, similar to what's done in some courts in Europe, Australia and Canada.

"The United States is one of the few industrial nations where that doesn't happen," Brunell writes. "But that may be changing."

 

Rewind: Video of AG McKenna's remarks on health care, gang violence

Attorney General Rob McKenna was the guest at Thursday's Lobby Lunch meeting, which just happened to be the day that the Florida judge ruling on one of the health-care law challenges issued a new ruling. Listen to McKenna explain the judge's decision, and why he agrees with it.

McKenna also spoke about Washington's growing gang violence problem, and his plan to address it. In the first video, he describes the problem in detail, offering some alarming statistics: Washington ranks fourth in the nation in drive-by shootings, and has experienced a 45 percent increase in gang-related shootings in the last 12 months.

In this video, McKenna outlined how House Bill 1126 would address the problem.

Gov. Gregoire's Keynote Remarks at AWB's 2011 Legislative Day

(Recorded: Feb. 03, 2011) Gov. Chris Gregoire’s keynote remarks at AWB's annual Legislative Day luncheon. Topics include unemployment insurance, workers' compensation, state employee pensions and education.

AWB raises concerns over campaign disclosure reform bill

Passing a law requiring political action committees to include the name of the entity that created it is cumbersome for a group with a name as long as the Association of Washington Business, AWB's Kris Tefft said Thursday.

That was one of the red flags that Tefft raised during testimony on Senate Bill 5021, a bill sparked by the Moxie Media scandal this summer that's aimed at making it easier for people to determine who is funding a political campaign.

AWB isn't particularly for or against the bill, Tefft said, just concerned about some of the language in the first draft. Two other areas of concern: A proposal to ban political committees from receiving contributions from other political committees; and language that would make it harder for a person or entity to create more than two political committees.

Sen. Craig Pridemore, D-Vancouver, the prime sponsor and chairman of the Senate Committee on Government Operations, Tribal Relations & Elections, said he heard similar comments from others and he welcomed a chance to make some changes to the bill that he admitted was more rushed than he would like.

AWB files ballot title challenge to Referndum 52

AWB filed a ballot title challenge in court today over Referendum 52, which seeks voter approval for a $505 million bond sale to finance green energy construction projects in schools.

The ballot title fails to inform voters that, if approved, the measure will make a temporary bottled water tax permanent. Revenue from the tax will be used to pay the bond debt.

"We're just asking the court to amend the ballot title, which is its prerogative, in order to include this detail," Kris Tefft, AWB general council, said in a press release. "The ballot measure should be straightforward, informational and free from political speech."

Jason Mercier of the Washington Policy Center said in a blog post that supporters of the measure couldn't say they weren't warned.

"During the floor debate, an amendment was introduced to change the suggested ballot title," Mercier writes. "Sponsors of the amendment warned that the proposed ballot title would invite a legal challenge."

The amendment failed by a vote of 16-30, Mercier notes.

A hearing on the challenge is set for May 28 at 9 a.m.

Surprise! New rest break requirement in federal health care law

House Speaker Nancy Pelosi wasn't kidding when she said "[w]e have to pass the bill so you can find out what is in it." Tucked away among the various new tax provisions and insurance industry regulations is an important, but seemingly unrelated, new employment law.  Covered employers will want to take note, and take steps to ensure compliance. 

Section 4207 of the Patient Protection and Affordable Care Act amends the Fair Labor Standards Act to require employers provide rest breaks and facilities for nursing mothers to express breast milk.  The new provision reads:

(1) An employer shall provide--
   `(A) a reasonable break time for an employee to express breast milk for her nursing child for 1 year after the child's birth each time such employee has need to express the milk; and
  `(B) a place, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public, which may be used by an employee to express breast milk.
    `(2) An employer shall not be required to compensate an employee receiving reasonable break time under paragraph (1) for any work time spent for such purpose.
    `(3) An employer that employs less than 50 employees shall not be subject to the requirements of this subsection, if such requirements would impose an undue hardship by causing the employer significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer's business.
    `(4) Nothing in this subsection shall preempt a State law that provides greater protections to employees than the protections provided for under this subsection.'.

Note that smaller businesses, with fewer than 50 employees, are not as such exempted from the provision.  Such an employer may still be covered unless it can demonstrate an "undue hardship" complying with the law. 

House sneaks union gag rule into Senate budget

It was the hottest issue of the 2009 session.

And it's made a triumphant return in the closing days of the 2010 regular session. 

We're talking, of course, about the worker privacy issue -- the rule barring employers from requiring employees to attend meetings, listen, respond to or participate in any communication related to political, labor or religious matters. It was the labor community's top priority for the 2009 session, and it all came to a screeching halt with one errant e-mail last March.

Well, it's back, in a skinnied-down version. In the rush to move the supplemental operating budget along, lawmakers in the House quietly inserted language restricting employers or service providers who receive DSHS funding.

Students of the 2009 Legislature may recall that Gov. Gregoire, Senate Majority Leader Lisa Brown, D-Spokane, and House Speaker Frank Chopp, D-Seattle, collectively agreed to shelve legislation last session after an e-mail linked action on the bills to campaign contributions. Union representatives, outraged over the death of their bills, vowed revenge at the polls with the establishment of their DIMEPAC (Don't Invest in More Excuses Political Action Committee).

Flash forward to today and, specifically, to the 2010 Senate operating budget. Upon reviewing the  proposal, AWB General Counsel Kris Tefft observed the insertion of the gag rule language in a substitute version offered by the House. He outlined his concerns in this memo to top members of the Senate Ways & Means Committee. Writes Tefft: 

Notably, these provisions were not proposed by the Senate in the original or substitute form of SB 6444, but rather, inserted by the House in its striking amendment. Specifically, at sections 205 and 206 (pp. 73 and 81-82 respectively) of SB 6444, the following language is inserted:

No employer, provider, or entity receiving state funds to provide long-term care services or services to the developmentally disabled may use these funds to assist, promote, or deter union organization.

The inclusion of such language is invalid, Tefft notes, under a recent U.S. Supreme Court decision in United States Chamber of Commerce v. Brown. The Court invalidated a California statute that prohibited private employers from receiving state program funds of more than $10,000 in any program year from using the money to "assist, promote or deter union organizing."

Yet, there it is. And while it is a much narrower version of the worker privacy bills proposed last year -- the clause specifically refers to providers who receive state funds for long-term care services or services for people with developmental disabilities -- it opens the door. Thirty-one words. Almost four lines of text.  

Did they think no one would notice?

Could Washington's Nation-Leading Minimum Wage Go Down Next Year?

Probably not.  But as news yesterday came out that the adjustable minimum wage rate in Colorado will likely go down with inflation next year (ably dilated in this blog post by the Washington Policy Center's Carl Gipson), one may wonder why our state's inflation-adjusted minimum wage rate wouldn't also go down if (and as) inflation indices trend downward.

Colorado's minimum wage law was adopted in 2006 as an amendment to the state constitution.  It states, in pertinent part, that Colorado's annual minimum wage "shall be adjusted annually for inflation, as measured by the Consumer Price Index used for Colorado." Note that an "adjustment" can go either up or down.

Washington's minimum wage law, by contrast, appears to be a one-way ratchet.  Our statute, adopted by initiative in 1998, says the Department of Labor & Industries shall "calculate an adjusted minimum wage rate to maintain employee purchasing power by increasing the current year's minimum wage rate by the rate of inflation."  Note the third verb: "increasing". 

I suppose an argument could be made that if the rate of inflation is negative, the adjusted rate should go down despite the word "increasing" -- after all, keeping the rate the same the following year because of negative inflation isn't "increasing" it either.  Courts in Washington have done stranger things with statutes. 

But I wouldn't hold my breath.

The Union Gag Rule Hidden in EFCA

Even casual OBW readers know the extent to which we've fought, and so far held off, imposition in Washington of the onerous union gag rule, unconstitutionally prohibiting employers from communicating with employees, on the employer's time and premises, about labor unions. 

This piece in today's Wall Street Journal looks at an implict gag rule in the exquisitely mis-named "Employee Free Choice Act," the legislation formerly known as card-check.  (I say "formerly" because labor's campaign in Congress to deny the secret ballot to employees in union elections has apparently been beat back, for now). 

According to a former general counsel of the National Labor Relations Board, John Irving:

Today, according to the National Labor Relations Act—as amended in 1947—employers are permitted to express themselves to their employees with “views, argument, or opinion . . . if such expression contains no threat of reprisal or force or promise of benefit.” Of course, this leaves unclear just what constitutes lawful opinion versus unlawful threats or promises. And over the years, the shifting composition of the NLRB—and of the courts—has caused disagreements over what permissible free speech is.

For example, employers who might sincerely assert to their employees that “unions cause plant shutdowns” or “could cause loss of customers” may or may not be exercising lawful free speech, depending on the views of the labor board at the time. If employers fall afoul of the law today, they face only nonpunitive “make-whole” and “cease and desist” sanctions.

But EFCA dramatically escalates these penalties. Under the new bill, the employer could be subject to a $20,000 fine for each questionable statement, and to near-automatic injunction proceedings based on union-filed unfair labor practice charges. [snip]

... Faced with these draconian penalties, employers—particularly smaller employers—will be forced to remain silent. EFCA’s penalty provisions deserve careful scrutiny in light of statutory and constitutional free speech protections. Their net effect will be to deny free speech to employers and to deprive employees of the advantages of meaningful debate before they make important choices affecting their livelihood.

New law expected to help wineries, breweries and consumers

Collectively, they’re known as Tied House Laws, and they date to the end of Prohibition.

Washington, like other states, adopted laws in the early 1930s aimed at preventing a “house,” or drinking establishment, from becoming “tied” to an alcohol manufacturer or distributor.

By erecting a wall between manufacturers and retailers, lawmakers hoped to avoid the kinds of problems that historically came from close connections -– like breweries bribing barkeepers, and Al Capone-style gangsters building empires by controlling which brands of booze were sold at bars.

That was fine, then.

But plenty has changed in the ensuing decades, including the birth and rise of a Washington wine industry that was not contemplated by the 1933 legislation known as the Steele Act.

Lawmakers have made a number of changes in the laws over the years to accommodate the changing times, but probably none as significant as this year’s adoption of House Bill 2040.

The new law, which went into effect July 26, ends the state’s prohibition against alcohol manufacturers and distributors holding a financial interest in retail establishments, making Washington the first state in the country to open up investing among the so-called “three tiers” (manufacturers, distributors and retailers).

New Laws Go Into Effect Sunday

Sunday marks the 90-day point from the April 26 adjournment of the Legislature, and so is the day our state constitution sets aside for the vast majority of the nearly 600 new laws passed in 2009 to go into effect.

Rachel La Corte, the AP's statehouse reporter, catalogs some of them here, leading with the new law making public breastfeeding a civil right under our state's Law Against Discrimination.   

As described in an earlier OBW post, this particular new law doesn't affect employment as such, although there is pending legislation in Congress that could extend the protection to employees.

Another new law that could affect the workplace is the so-called "everything but marriage" law regarding the rights and responsibilities of state-registered domestic partners.  It is subject to a referendum which has until Saturday to turn in 121,000 valid signature petitions to put the measure to a vote.  If Referendum 71 lacks sufficient signatures, the measure goes into effect.  Its workplace impacts would be felt most directly in the area of family leave, employee benefits, and workers' compensation.

Finally, while not affecting the workplace per se, another new law effectively abolishes the employee-only restroom in retail establishments.  My colleague Jason Hagey took a look at it here, back when it was signed into law.  I was reminded of this new law whilst dining last week at a favorite downtown Olympia spot, which on that day had two prominent handwritten signs on the door saying "No public restrooms."  Not anymore.

UPDATED: Washington Attorney General: "Worker Privacy Act" Invalid

No, this is not a re-run.  Well, sort of.

As regular OBW readers know, one of the most hotly contested pieces of legislation in the 2009 session was the so-called "Worker Privacy Act," organized labor's top priority and a gag rule that would prohibit employers from engaging in legitimate, federally protected communications with employees about labor organizing and collective bargaining. 

Its abundantly justified demise last session provoked a series of jeremiads from the state labor council, culminating in last week's release of their legislative wrap-up, the common take-away being this misguided and generally unprovoked legislative attack on Washington employers isn't going away anytime soon.

In 2009, aunified business community resisted the proposal on the grounds it is unnecessary, unworkable, and not least of all, unconstitutional insofar as it would be pre-empted by federal law.  Before the bill died in a series of eventsbest characterized as Grisham-esque, our legal argument was confirmed in an informal opinion letterfrom Attorney General Rob McKenna's office.

Yesterday afternoon, McKenna's office released the formal Attorney General Opinion (2009 AGO No. 3) confirming the same conclusion its informal opinion reached: the "Worker Privacy Act" is pre-empted by federal law.  If our Legislature were to pass it, a court would likely reject it.

Interestingly, after Washington's legislative session adjourned in April, Oregon became the first state in the nation to pass a functionally identical version of the gag rule, and Governor Kulongoski signed it into law on June 30, with an effective date of January 1, 2010.  As this useful summaryfrom CCH Workday describes, the measure will almost certainly face a legal challenge on pre-emption grounds. 

Expect AG McKenna's contribution to the debate in Washington to resonate in the legal challenge to our south as well.

UPDATE (1:10pm): Senators Mike Hewitt (R-Walla Walla) and Janea Holmquist (R-Moses Lake), the original requestors of the Attorney General Opinion during session, released a statement calling it "the right decision at the right time."

Wash. Supreme Court Sides with Employees In Punitive Damages Case

One of the few areas where Washington law allows the imposition of punitive damages is in employment law, where an employer may be found liable for double damages and attorney's fees when he or she "wilfully and with with intent to deprive the employee of any part of his wages" fails to pay the employee all the wages he or she is due.  This law also one of the few areas that "pierces the corporate veil" in that corporate officers are personally (as opposed to corporately) liable for the damages.

So it's a big deal. And there has been some uncertainty over what the law means by a failure to pay wages that is "wilful" and "with intent to deprive."  Our Supreme Court has previously held that a struggling employer's financial inability to pay wages owed is no defense to a finding of willful withholding.

This morning, the Supreme Court extended that principle to hold that a legal inability to pay wages is also no defense.  In Morgan v. Kingen, the court held 6-3 that an employer's involuntary chapter 7 bankruptcy proceeding, in which its assets are under court supervision and it lacks any legal ability to pay wages, still counts as failing to pay wages "wilfully and with intent to deprive."

Oregon becomes first state to pass union "gag rule" bill

Oregon became the first state in the nation** to pass the national AFL-CIO's model "Worker Freedom Act," the gag rule bill known in Washington the last several sessions as the "Worker Privacy Act."  It purports to rebalance federal labor law in unions' favor by restricting employers' ability to effectively communicate with employees about labor issues during organizing and bargaining campaigns.  The Oregonian reports here, with statehouse coverage here.

The bill now heads to Governor Ted Kulongoski, who the Oregonian reports is expected to sign it.  After the Washington version of this proposal died last session, Governor Gregoire was quoted as saying she would have vetoed it had it passed.

With good reason.  If the measure is signed, expect a court fight.  One of the reasons it took national unions so long to find a state willing to pass the bill is its extremely dubious legality. Especially in light of the U.S. Supreme Court broadly striking down a similar California measure aimed at employer speech about unions, these proposals have been viewed as attempting to take away rights that employers clearly enjoy under federal labor law -- something states are pre-empted from doing.

** The Oregonian imprecisely implies Oregon joins New Jersey in passing this bill.  New Jersey passed a version in 2007 that did not include the provisions related to employer speech about unions.  No other state has passed this full version of the model "Worker Freedom Act" bill.

Mandatory Paid Sick Leave Ordinance Struck Down in Milwaukee

We have been following the national debate over a bill in Congress mandating employers provide paid sick days to employees, and noting implications of the debate for employers in Washington (most recently, here and here). 

Interestingly, while no state has passed such a requirement (Senator Karen Keiser, D-Des Moines, introduced a version in Washington in 2006 but it died in committee), three municipalities have adopted paid sick leave ordinances: San Francisco, Washington D.C., and Milwaukee. 

Milwaukee's ordinance, which was adopted by referendum last November, was struck down last Friday.  A Circuit Court judge declared the law invalidly enacted and unconstitutional in a challenge brought by the local chamber of commerce. 

Both legal defects stemmed from the insertion of mandatory time off for victims of domestic violence, sexual assault, or stalking, which the judge found to be neither reasonably referenced in the referendum's ballot title nor reasonably related to the underlying purpose of the ordinance.

The Milwaukee ordinance was somewhat unique in this regard.  The "Healthy Families Act" pending in Congress does not include a domestic violence provision.  And while Washington, in 2008, joined a relatively small handful of states requiring time off for victims of domestic violence, sexual assault, and stalking, there is no requirement that time be paid. 

Paid leave proponents in Milwaukee how vowed an appeal.  Whether the ruling stands, and has more than merely local signifcance to the overall debate about mandated paid leave, remains to be seen.

Putting Together a Social Media Policy

Jason Hagey posted this morning about some of the risks and rewards of business embracing social media, with some thoughts and recommendations derived from a seminar earlier this week by attorneys at AWB member law firm Perkins Coie in Seattle.  

Recommendation number one is "develop a social media policy and enforce it."  What should a social media policy say?

Here is one HR professional's take, writing at the social media wesbite Mashable.com: 10 Must Haves For Your Social Media Policy.  It includes as examples social media policies from a couple different companies.

Take a look.

Social media offers businesses potential profits - and pitfalls

Sure, your company is experimenting with social media.

But does it have a social media policy? And are you taking steps to minimize the potential public embarrassment -- and worse, legal liability -- that it could bring?

To help make sense of the social media phenomenon from a business perspective, three attorneys from the Seattle office of Perkins Coie law firm put on a seminar this week entitled “Critical Legal Questions for Companies Participating in Social Media.”

The program included practical suggestions for how to make the most of the various social media while still protecting your business.

 “Social media is changing the way we do business,” attorney Tom Bell said.

Among the suggestions:

Breastfeeding at Work?

From law firm Stoel Rives's World of Work law blog: US Senator Jeff Merkley, D-Oregon, has announced his sponsorship of the Breastfeeding Promotion Act (BPA) in the U.S. Senate, following introduction of a companion in the U.S. House yesterday.  The measure would amend the anti-discrimination provisions of the Civil Rights Act of 1964 to:

• protect breast-feeding in the workplace;
• provide tax incentives for employers that establish private lactation methods in the workplace;
• establish minimum safety standards for breast pumps;
• make breast feeding equipment tax deductible; and
• create time and privacy for working mothers to express milk.

Oregon May Be First to Pass Labor's "Gag Rule" Bill

Organized labor's top legislative priority the last couple years -- the inaptly titled and gratuitously unconstitutional "Worker Privacy Act" -- failed to move in Washington this session after examination of its legal and policy defects slowed it, and a bizarre e-mail scandal killed it.

But the misguided measure appears to have life across the southern border.  The Statesman Journal reports this morning that the Oregon Senate has passed a functionally identical version of the bill.  The vote sends it to the Oregon House, which has already passed the bill in a prior session. 

Under the guise of protecting employees from forced communication about matters of political or religious belief, the law is designed to restrict effective employer-employee communication during labor organizing and collective bargaining campaigns.  Federal labor law balances what unions and employers may do and say during organizing and bargaining. 

The purpose of this bill is to use state law (and the threat of an employment lawsuit and punitive damages) to tilt the balance in the union's favor by taking away the employer's right to call a meeting of its employees to express its views.  To paraphrase the U.S. Supreme Court, it would allow the unions to continue fighting freestyle while requiring the employer to follow the Marquis of Queensbury rules. 

If Oregon passes the measure and Governor Kulongoski signs it, it will be the first state in the country to have adopted the full version of this national AFL-CIO model bill.  Because of the bill's dubious legality, however, a legal challenge would be reasonably anticipated.

Washington Supreme Court Expands Retroactive Liability for Manufacturers, Sellers

In another pro-plaintiff holding in an important case for the business community, the Washington Supreme Court this morning released its decision in Lunsford v. Saberhagen Holdings, a products liability case involving asbestos exposure. 

The court held 9-0 that strict liability applies retroactively to all claims, even those occurring before the state actually adopted the rule of strict liability against manufacturers and sellers.  

In general, strict liability means a manufacturer or seller is liable for a defective or dangerous product even if it wasn't negligent in manufacturing or selling the product. 

Here, Lunsford's claim arose in 1958. Washington adopted strict products liability in 1969 against manufacturers, and 1975 against sellers. Today, the court held this half-century old claim will be governed by rules that didn't exist -- and couldn't be planned against -- at the time.

The US Chamber of Commerce, our national affiliate, filed a coalition friend of the court brief in the case arguing against retroactive application. The Chamber pointed out that retroactive application of strict liability would be inconsistent with the court's own recent rulings about retroactivity and particularly troubling for products liability defendants in the state.

Interestingly, last year, the Supreme Court of Ohio had a virtually identical case before it and reached the exact opposite result, which was left undisturbed on appeal to the US Supreme Court.  

State Supreme Court Again Makes Washington a Corporate Law Outlier

Self-consciously adopting a new rule from which the majority of other states are recoiling, the Washington Supreme Court this morning released its decision in In re F5 Networks, Inc., a case that sets an important legal standard for corporate litigation in Washington State. 

The issue involves the standard by which shareholders may commandeer control of a corporation to sue in its name in what is called a shareholder derivative lawsuit.  Such suits are a limited and disfavored exception to the rule that corporate governance is vested in the business judgment of officers and directors. Before taking the reins of a company in a lawsuit, must a shareholder first make demand of the corporation to take action itself, and then only proceed if the corporate leaders refuse the demand?  Or could shareholders excuse themselves from the requirement by claimint demand would be "futile"? Far from an esoteric journey through the business law textbook, the question has real consequences for current and potential Washington companies because shareholder derivative suits are very susceptible to a form of lawsuit abuse called the "strike suit."

House Passes Workers' Comp "Ex Parte" Bill

Last night just after midnight, the House of Representatives passed HB 1402, a measure opposed by the business community because it introduces more adversarial legal process into the state's workers' comp appeals system.  It is designed to prevent effective communication between employer representatives and claimant medical providers by channeling those contacts through the claimant's attorney. 

The bill passed 55-42, with a handful of Democrats crossing party lines to vote no.  the Department of Labor & Industries, which in past years has opposed the legislation, stayed on the sidelines this year, having brokered with the bills' proponents an exemption from the bill's more onerous features. 

The bill, if it passes the Senate and becomes law, is expected to add delay, and therefore cost and inefficiency, to the resolution of disputed workers' compensation claims.  It undoes a 1992 decision of the Washington Supreme Court, Holbrook v. Weyerhaeuser, in which the court, surveying the prior 80 years of workers' compensation law, observed "[t]he Legislature has determined that a free flow of information is necessary for the efficient and proper resolution of industrial insurance claims."  (Holbrook, 118 Wn.2d 306, 318).

Evidently, at the behest of the politically powerful claimants' bar, the Legislature, and to a certain extent the Department of Labor & Industries, is willing to revisit that determination.

Gag Rule Dead; Criminal Investigation Underway -- UPDATED

The morning before the Legislature's house-of-origin cutoff started off normally enough, with this piece by Jerry Cornfield in the Everett Herald (since overtaken by events and updated, here) exploring both sides of the so-called "Worker Privacy Act" as it gets down to crunch time. 

Then this blog post from Niki Sullivan at TVW's Capitol Record:  "'Worker privacy' bill is dead after e-mail linking contributions to votes."  (Since updated, here).

That still remains about all anyone knows (or can say) about the issue. It's now shrouded in cloak and dagger talk of pending criminal investigations, undue influence, bribery and intimidation.  Press conferences have been scheduled, then cancelled.  

Cornfield provides an updated timeline here.

Adam Wilson (The Olympian) comments on the matter here (with an update here).  His colleague Brad Shannon, here.

Joe Turner at the News Tribune here.  The Seattle Times' Politics Northwest blog here.  Rich Roesler (Spokesman-Review) here.

EFF takes a look here and here.

UPDATED:  AWB has released a statement on these developments here. 

The Washington State Labor Council has released a statement here.

KUOW Examines Card-Check Bill, Employer Gag Rule

This morning's KUOW Weekday show spent an hour looking at the exquisitely mis-named "Employee Free Choice Act," or card-check bill, about to be introduced in Congress, as well as the equally Orwellian "Worker Privacy Act" now pending in the Washington Legislature.  

The show spends a considerable amount of time on the arguments of both labor and management.  The employer community's perspective received excellent treatment from Seattle labor and employment attorney (and AWB Board member) Tim O'Connell of Stoel Rives LLP, whose remarks ranged from an historical perspective on labor law in this country to up-to-date statistics on unionization from the National Labor Relations Board.  Tim covered the panoply of concerns and objections that lead the business community to oppose card-check and the gag rule as the most radical retrenchments of federal and state labor law in at least six decades. 

The archived show can be streamed here.  For folks interested in the issue, it's well worth a listen.

Supreme Court Rejects Challenge to I-960

The Washington Supreme Court just released its eagerly anticipated decision moments ago in Senate Majority Leader Lisa Brown's lawsuit against Lt. Governor Brad Owen, which attempted to invalidate the supermajority vote requirement of Initiative 960 for bills that raise taxes. 

In an unanimous opinion authored by Justice Mary Fairhurst, the court refused to entertain the question.  Agreeing with arguments made by Lt. Governor Owens, as well as AWB in our friend-of-the-court brief, the court concluded:

This original action is improperly before this court on application for a writ of mandamus and is a nonjusticiable political question.  Intervention of this court into an intrahouse dispute over a parliamentary ruling to compel the president of the senate to perform a discretionary duty would be a grave violation of separation of powers.  We dismiss the action.

Two More Papers Oppose the Gag Rule

First the Seattle PI called it "pointless." Then the Seattle Times called it a "bad idea" and "entirely one-sided."  The Longview Daily News said it "amounts to a violation of employers' free speech rights."

This morning, two more editorial pages came out against HB 1528/SB 5446, the labor unions' attempt to squelch employer speech about unions. 

The Spokesman-Review joined the growing chorus, noting that becoming the first state in the country to pass this "needless intrustion" would be a "reckless impulse" and "give businesses that are either in Washington or thinking about it a reason to consider one of the other 49 states."  The Spokesman's bottom line: the bill is "unneeded and unwise."

Likewise, the Vancouver Columbian notes the bill is "so vague as to allow workers -- non-bosses, remember -- to speculatively make executive decisions" and asks "What are unions afraid of? Workers becoming too informed?"

Both pieces are worth a full read.  The editorial pages are so far unanimous -- this bill is unnecessary, unworkable, unconstitutional, and sends a horrible message to the state's employers at a time we need jobs the most. 

Seattle Times: Defeat Labor's Gag Rule

Labor's anti-employer gag rule bill continues to get panned by the state's editorial pages.  Like the Seattle PI, which a couple weeks ago called the bill "pointless" and a waste of time, today's Seattle Times editorial page concludes it's a "one-sided" "bad idea" that should be rejected.

Notably, the Times editorial cuts through the rhetoric about supposed workplace forced listening on political and religious opinions and exposes the real purpose of the bill: to tilt a labor organizing campaign in the union's favor by prohibiting the employer's effective communication of its position on unionizing to its employees.  This right, of course, is both allowed and protected by federal labor law, and scrupulously monitored by the National Labor Relations Board to ensure employer communications during a campaign are not coercive.

The editorial explores this federal pre-emption issue but also focuses on the bill's First Amendment issue -- placing content-based restrictions on employer speech the state disfavors.  But the Times's conclusion is the most salient: "The Legislature should scrap this bill and focus on balancing the budget." 

Indeed, with the challenges this Legislature faces, there is no time to waste on a legally dubious, politically charged, one-sided attack on the long-held rights of Washington job providers. 

Unions' Anti-Employer Gag Rule Drawing More Fire

Showing that the strength of one's argument is often inversely proportionate to the excess of one's rhetoric, the principal pushers of the anti-employer gag rule have taken to the blogosphere this week with some surprising statements in an effort to rehabilitate their troubled, and troubling, "top priority": the attempt to take away employers' long-held, federally protected right to communicate with workers during labor organizing campaigns. 

Of course, readers would have to think back some to remember that's what this national AFL-CIO model bill is all about -- employer opposition to union organizing -- because beyond secreting "labor or other mutual aid organizations" within the definition of forbidden speech on "political matters," the bill is sold as an innocuous protection against forced indoctrination of political or religious opinions.

The proponents don't talk much about that core purpose anymore -- and for good reason.  Federal labor law has long protected an employers' right to engage in free speech, even in a called staff meeting, about labor organizing, so long as the speech is non-coercive and makes no promise of benefit or threat of reprisal for the employee's decision whether to unionize, and not held within 24 hours of a union election.  As a result, states are not free to regulate or prohibit this speech.

So what are they talking about?

More Media on Gag Rule Problems

Not quite live-blogging, but I'm sitting in the evening hearing of the Senate Labor, Commerce & Consumer Protection Committee at which the employer gag rule bill is expected to move out on a partisan vote.   

Two new pieces were published today about the bill.  The first, by the Everett Herald's Jerry Cornfield, explores the negative message the bill sends to the Boeing Company in particular.   Speaking of the sponsor in the House, Rep. Mike Sells (D-Everett):

Having this mega-corporation stand firm against you might be a badge of honor for Sells, whose other job is secretary-treasurer of the Snohomish County Labor Council.

But in the Capitol, his bill is stressing out a few of his valued political allies, including Democratic Gov. Chris Gregoire.

They perceive it as another straw bending the backbone of Boeing's desire to stay in Washington.

The Longview Daily News picks up on the legislation's anti-business message, editorializing against what the Seattle PI has already pithily dismissed as "pointless":

Last spring’s U.S. SupremeCourt ruling and the conclusion of McKenna’s office ought to be enough to stop this legislation dead in its tracks. That hasn’t happened, which is unfortunate. The unions backing this measure and the so-called “Employee Free Choice Act” now pending in Congress are attempting to stack the deck against employers in ways that should offend anyone’s sense of fairness. ...

There’s every reason to think the proposed Worker Privacy Act would end up in court and, in time, be tossed out. But what kind of message would the Legislature be sending prospective employers by approving such a proposal? That’s something lawmakers should consider.

Read the whole thing.

It's in the P-I: Employer Gag Rule Bill 'Pointless'

The Seattle P-I on labor's employer gag rule (here, second item down):

[T]here's Sen. Margarita Prentice's well-meaning but pointless SB 5446, which would limit employers' ability to call meetings of workers. It's aimed at firms that try to block unionization, but an opinion from the state attorney general says it flies in the face of federal law. Some supporters supposedly think it'd still be a nice symbol. Please. Why waste time -- to insult the majority of good companies?

Exactly.  The bill, certain to be challenged and invalidated if enacted, has already fostered a political atmosphere that treats Washington job providers like Mao-era re-education cadres. Just listen to Friday morning's committee debate over the measure here (fourth item down).

(Showing that silver linings can have dark clouds, though, the same P-I piece editorializes in support of SB 6035, this session's misguided attempt to regulate the workers' compensation retrospective ratings program, ostensibly to muzzle the policy and political participation of one of the program sponsors.  More on that in another post.)

State Labor Council Swings at AG Opinion on Gag Rule; Misses

As we noted Tuesday afternoon, Attorney General Rob McKenna's office released an analysis in response to a question by the Senate Minority Leader whether the application of the employer gag rule, SB 5446/HB 1528, to employer communications about labor unions is pre-empted by federal labor law.  The Attorney General adopted the correct view, backed by roughly six decades of federal law and recently underscored by the US Supreme Court, that employers' free speech about union matters is beyond the authority of states to regulate. 

This morning, the Washington State Labor Council has responded with an unsigned "Legislative Analysis" attempting to refute the Attorney General Office's letter.  But the Labor Council's "analysis" contains a couple fundamental non sequiturs.

State AG: Labor's gag-rule bill pre-empted by federal law

State Attorney General Rob McKenna this afternoon has delivered a letter to Senate Minority Leader Mike Hewitt, R-Walla Walla, responding to his question about the legal validity of labor's "top legislative priority" this session, the so-called Worker Privacy Act, which imposes unnecessary, unworkable, and unconstitutional restrictions on employer communications with employees.  Senator Hewitt asked AG McKenna if, as we've been contending, provisions of this law are pre-empted by federal law. 

AG McKenna has confirmed that indeed the bill's attempt to restrict communications between employers and employees on matters related to "labor and other mutual aid organizations" runs afoul of federal law.

There are many pressing priorities confronting the Legislature this session -- solving the budget gap, stimulating investment and economic recovery, growing and maintaining jobs -- it should not waste its time on a bill that now even our state's top lawyer confirms is unconstitutional. 

Rome burning; will legislators fiddle?

That's the question surrounding today's reintroduction of House Bill 1528 and Senate Bill 5446, this year's version of the labor unions' notorious gag rule bill.   Although deceptively titled the "Worker Privacy Act" and cloaked in talking points about rights to conscience and privacy in political and religious matters, the bill is designed to prohibit employers from effective communication about labor unions during an organizing campaign.  It arms the employee with a new right to decide which meetings, communications, and valid job directives he or she will listen to, a right enforced by a new lawsuit against the employer with the threat of punitive damages.  

One problem: The bill would prohibit, with respect to unions, a constitutional free speech right that federal law explicitly protects.  It's pre-empted.  That's why no other state, despite intense national lobbying by the AFL-CIO, has passed this bill.  The only state that came close, California, had their similar 2004 attempt struck down last summer by the US Supreme Court on federal pre-emption grounds.  

Undeterred, advocates have rolled out this bill again with fanfare, exaggeration, and caricature.  But it's a needless diversion.  

In this challenging economy, with the state unemployment rate rising to 7.1 percent and the Legislature struggling with a projected $6+ billion deficit, lawmakers waste their time and the taxpayers' money considering a bill the core purpose of which has already been ruled beyond the authority of states to regulate.    

Cross-posted at WashACE.com.

Supreme Court's Wind Farm Ruling Right on the Money

Last Thursday, the Washington Supreme Court released its eagerly-awaited decision on the viability of the $150 million Kittitas Valley Wind Power Project, the 65-turbine wind farm proposal along highway 97 near Ellensburg.  The project has been held up in a legal dispute between Kittitas County, some landowners, the state Energy Facility Site Evaluation Council (EFSEC), and Governor Gregoire.

As we detailed in this month's edition of Washington Business Magazine, the project -- and in some important ways, the permitting process for future alternative energy facilities -- has hung in the balance while the high court hashed out the issues in the case.  

Largely at stake was whether the EFSEC law permits the council and the Governor to preempt local land use laws in order to site a power project.  The court unanimously said yes.

AWB supported this project and the decision by EFSEC and the Governor to approve it.  Joined by the Northwest & Intermountain Power Producers Coalition, we filed an amicus curiae ("friend of the court") brief urging this outcome in the court case. 

Decisions like this rile local governments and property owners who ordinarily, and understandbly, expect local control in land use planning matters.  But the Legislature has long decided that in order to be timely and viable, large energy projects need an expedited, "one stop shop" for permitting decisions.  With our state's push toward renewable energy mandates (I-937) and recent legislative initiatives regarding climate change, the ability to quicky and efficiently site these kinds of projects are key. 

We think the Supreme Court got this one right.

Supreme Court Upholds, Extends (?) Smoking Ban

This morning, in a deeply split set of opinions, the Washington Supreme Court upheld the constitutionality of Initiative 901 as applied to a private American Legion club and arguably extended the ban by wiping out the private club exemption entirely, so long as the club is also a place of employment.  The Olympian has a story here. 

The initiative's inconsistent wording caused tremendous headaches for employers anxious to ensure compliance with the new requirements, prompting AWB to issue a Q&A on the law's requirements in 2005.  A new Q&A can be added to that now in light of the court's case -- is a "private club" still exempt from the law's requirements?  Not, evidently, if it has employees.

Supreme Court Hears I-601 Lawsuit

The Washington Supreme Court this morning heard arguments in Brown v. Owen, a lawsuit we've been following with great interest and in which we submitted a friend of the court brief supporting Initiative 601. 

The basic question in the lawsuit is whether the supermajority requirement of I-601 to raise taxes is constitutional, but there are significant procedural issues in the way the lawsuit was brought that might keep the court from reaching that constitutional issue. 

The AP has this short blurb out, and a nice summary of the argument is in the Olympian this afternoon, accessible here. 

Jason Mercier with the Washington Policy Center took in the arguments and has these insights on the WPC blog.  The Evergreen Freedom Foundation, which also filed an amicus curiae brief in the case, has some additional thoughts on their blog.

The weight of commentary thus far seems to be that at least a majority of justices seemed reluctant to insert the court into a legislative squabble -- a nice touch of judicial restraint.  It seemed that way to me too, watching the argument, but the same justices had tough questions for both sides.  Sometimes our high court telegraphs its views through its questions; sometimes, things are closer than they appear. 

Time will tell.  A case usually gestates for about nine months before a decision comes out, but given the potential impact of this one on the 2009 legislative session, justices might work double-time to issue a decision.

AWB Files Legal Brief in Brown v. Owen Lawsuit

This afternoon, AWB filed an amicus curiae ("friend of the court") brief in Brown v. Owen, the lawsuit by Senator Majority Leader Lisa Brown challenging the constitutionality of the provision of Initiative 601 that requires a supermajority vote of both houses of the Legislature to raise taxes.  From the brief's intro:

AWB makes this short amicus submission to add an additional dimension to respondent’s separation of powers argument, contending that the petition raises essentially a political question that the court, as a matter of prudence and restraint, should decline to reach. Should the court reach the merits and grant the writ, it would in essence absolve a coordinate and co-equal branch of government from the difficult political and policy choices it must confront under RCW 43.135.035(1) by invalidating the statute under the same constitutional principle – majority rule – that the Legislature may itself use at any time (and has used in the past) to avoid the statute’s procedural requirements. The court should refrain from granting a single member of a single political caucus of a single chamber of the Legislature the extraordinary relief of striking down an enhanced procedural requirement the full Legislature has chosen for itself when the full Legislature could, by its own authority and through its own processes, loose the binds of that requirement at any time. 

The rest can be read here.  The Supreme Court takes up the case on September 9th.

(Cross-posted at WashACE.com)

               

Washington Supreme Court: Good for Business?

AWB looks at that question in its 2008 Scorecard and Guide to the Washington Supreme Court, released this week as an insert to the July-August issue of Washington Business Magazine.

This latest version of the judicial scorecard looks at 26 different business climate cases across six areas -- labor and employment, land use and environmental, tax & fiscal policy, torts and insurance, workers' compensation and safety, and general business issues.  AWB participated as a friend of the court in many of the cases evaluated, arguing for a pro-business outcome.

The top 3 "pro-business" scores in 2008 went to Justice Jim Johnson, whose decisions we agreed with 92% of the time; Justice Richard Sanders at 76%, and Chief Justice Gerry Alexander at 58%.  Down at the bottom end were Justice Tom Chambers, at 40%, and Justices Mary Fairhurst and Susan Owens at 38% and 35% respectively. 

Good Reads on "Card Check"

A couple notable items are up today on the national labor unions' top legislative priority, congressional approval of the wildly misnamed "Employee Free Choice Act" (EFCA), the proposal that would eliminate the decades-long democratic principle of secret ballots in union elections.

First, the Wall Street Journal describes the Wal-Mart company's aggressive and proactive mix of business and politics in meetings with management employees on the issue as well as efforts by the US Chamber and other groups to win hearts and minds on the issue this fall.

Second, in a different vein, Portland attorney Stacey Mark, who chairs Ater Wynne's labor & employment group, posts a discussion of the issue on the firm's Northwest Business Litigation blog.  Mark's piece is interesting for its thoughts on how card check plays out in practice, noting Oregon has had some experience with the system in public employment for about a year:

In some organizing efforts under the Oregon law, it was reported that employees who did not want to be represented by the union felt coerced into signing cards. Employees described verbal confrontations with the union during visits to employees’ homes and workplaces. Employees who petitioned for an election have also reported hostile and retaliatory treatment from union representatives and pro-union co-workers, who were aware of the petitioners’ identities because the process was not secret.

Mark's blog post concludes with a section headed "the EFCA is Likely to Become Law."  Of course for this prediction to come true, the unions need certain political outcomes this fall, and not just in the presidential race but in the US Senate as well.   And that gets back very nicely to the central themes of the WSJ article. 

Civil Rights and Union Membership

Dick Davis draws my attention this morning to an op-ed in the San Francisco Chronicle proposing that union membership be added to the federal Civil Rights Act as a protected class in employment.  These "six little words" -- prohibiting discrimination in employment "on the basis of union membership" -- would, the author proposes, allow workers to "defend themselves" against "union-busting thugs."  How?  By filing lawsuits, of course.

But is the proposal -- which if enacted, might go by its short title, the "Labor Lawyers' Full Employment Act" -- entirely without merit?  Query whether the modest addition of just another ten words -- "or the refusal to join or financially support a union" would make it a fair compromise?

(Cross-posted at WashACE.com)

Seattle PI Announces Supreme Court Endorsements

As one would expect, the Seattle PI today endorses the three incumbents (Charles Johnson, Mary Fairhurst, Debra Stephens) up for re-election (or in Stephens' case, election) to the Washington Supreme Court this fall.  As a point of personal privilege (and as an alumnus of his chambers), I would note the editorial's vastly more interesting comments thread which starts off with a reader's suggestion that "[w]e are in bad need of Richard Sanders clones" on the high court.

AWB has previously announced its endorsement of Justice Charles Johnson for re-election, but did not take a position in either of the other races, partly for reasons that will become apparent when the next edition of our Judicial Scorecard comes out in the next Washington Business magazine.

I-1029 Goes to Court

As anticipated, the legal dispute over I-1029 is now in the hands of the Supreme Court, if it agrees to hear the matter.  The News Tribune's Joe Turner and the Spokesman's Rich Roessler blog it, and Jonathan Bechtle at the Evergreen Freedom Foundation has a copy of the Community Care Coalition's petition and accompanying motion for discretionary review as well as a short summary of the argument.

Court of Appeals Misses on Municipal Tax Uniformity

Division I of the state Court of Appeals has released its decision in Group Health Cooperative v. City of Seattle, a municipal B&O tax case in which AWB submitted an amicus curiae brief.  The taxpayer actually prevailed for the most part in the case but it was an underlying issue that interested us -- the first precedential interpretation of the remedy provision of 2003's landmark municipal tax fairness legislation, EHB 2030. 

Here's what we wrote about EHB 2030 in 2003:

AWB’s tenacious six year effort to bring municipal tax fairness to Washington has finally paid off! EHB 2030 was signed into law by Gov. Gary Locke in early April. The signing of EHB 2030 marks the end of confusing local B&O tax codes, the elimination of the potential for double taxation and the preservation of the rules of fair tax treatment. Soon business taxpayers will be on the receiving end of a long-awaited, model B&O tax ordinance that creates uniformity, certainty, predictability and fairness in local taxation. Introduced by Rep. Lynn Kessler (D-Hoquiam), EHB 2030 ends differing interpretations of tax laws from the state to local level and from city to city. Thanks to this legislation, businesses that operate in multiple cities will no longer be forced to pay double or triple taxes on the same revenue. A long time priority of AWB, the Governor’s Competitiveness Council and the Gates Tax Study Commission is now a reality.

This bill, an executive request bill from then-Governor Gary Locke and Competitiveness Council priority, was enacted over the strenuous opposition of the cities.  One reason?  Section 14 of the bill, or RCW 35.102.140, provided a strong incentive for cities to come into compliance with the uniformity requirement:

A city that has not complied with the requirements of sections 2 through 13 of this act by December 31, 2004, may not impose a tax that is imposed by a city on the privilege of engaging in business activities.

In other words, comply with this law or lose the legislative authorization to impose a B&O tax while out of compliance.  In this case, it was pretty clear the City of Seattle was not complying with one of the provisions of the law relating to refund calculation -- in fact, an e-mail from the city's tax manager obtained through a public records request showed the city was actively thumbing its nose at the 2003 law.

Nevertheless, on this point, the Court of Appeals decided the Legislature couldn't have possibly meant such a draconian remedy for non-compliant cities:

While it is true that the legislative history supports the conclusion that the legislature intended the requirements of [EHB 2030] to be mandatory for cities imposing B&O taxes, there is nothing whatsoever in the legislative history suggesting that the legislature's objective was to impose a retroactive B&O tax revenue "death penalty" on municipalities found to have unwittingly enacted provisions of the model ordinance that were drafted in such a manner so as to be inconsistent with the statute.

Of course it isn't so much the Legislative history as the text of the law itself ("A city that has not complied . . . may not impose a tax . . .") where the Legislature's objective was clear -- and since we helped draft the statute, we felt pretty confident on this point. 

But, this decision is another reminder -- like last month's unemployment insurance decision from the Supreme Court repudiating another major 2003 enactment -- that what seems so clear before the Legislature often looks completely different through the prism of the judiciary.