Rule of Law - January/February 2010
Year Ends With Legal Center Victories
The NFIB Small Business Legal Center enjoyed another successful year in 2009. The Legal Center emerged victorious in eight cases, including two before the U.S. Supreme Court, matching our total from 2008.
Here is a look at some of our most important wins over the last 12 months. For the latest on our legal work, please visit NFIB.com/legal.
Mandated Paid Sick Leave in Milwaukee
The win: The Legal Center helped defeat a Milwaukee law that would have resulted in a loss of jobs and the closing of some businesses. A Milwaukee County judge ruled that a passed referendum requiring city employers to provide employees with paid sick leave exceeded the city’s authority.
The small business benefit: Expensive mandates take away needed flexibility and force employers to comply with burdensome paperwork requirements. Small business owners and their employees need flexibility to negotiate what benefits work best for them.
Mandated Attorney Representation in Illinois
The win: The Legal Center urged an Illinois appellate court not to force employers to hire attorneys in order to participate in Illinois Department of Employment Security hearings on unemployment compensation claims. Attorneys had alleged that allowing non-attorney representatives violated the court’s rule that only lawyers may participate in the practice of law.
The small business benefit: Forcing business owners to hire an attorney for these proceedings is unnecessary and only serves as an additional barrier for small businesses that want to defend themselves against frivolous claims. Rather than being forced to spend money on attorneys for unemployment hearings--which employees were not required to do--employers can send a representative of their choosing. An unemployment hearing is faster and more informal than a real legal proceeding. There is no judge, no discovery, no right to a jury and the rules of evidence do not apply.
Supreme Court Rules for Employers on Age Discrimination
The win: The U.S. Supreme Court held that in order for an employer to be liable under the Age Discrimination in Employment Act, the plaintiff must prove that age was the actual cause of the termination or other detrimental action. Going forward, the burden of proof falls on the plaintiff to prove that the employer used age to take a negative action against an employee, rather than forcing the employer to prove that age was not a factor.
The small business benefit: By establishing a national precedent that the burden belongs to the plaintiff, employers are now likely to see fewer age discrimination cases brought against them for decisions made against older workers for performance or behavior-related reasons. This is good news, because according to the Equal Employment Opportunity Commission in 2008, age discrimination charges nearly surpassed race discrimination charges.
Two Victories to Help Small Business Against Frivolous Asbestos Claims
The win: The U.S. Supreme Court ruled that a court should instruct a jury to limit awards in asbestos cases where the plaintiff has a fear of developing cancer but has not yet been diagnosed with the disease. The plaintiff received a $5 million award in earlier litigation because the jury was not instructed by the court to reach a reasonable limit. The Supreme Court ruled that plaintiffs be required to prove their fear is "genuine and serious."
The small business benefit: This standard will help reduce fraudulent claims and will discourage plaintiffs from going after business owners with unsubstantiated claims. The limitation will help affected business owners manage the costs associated with asbestos litigation.
The win: The Wisconsin Supreme Court ruled that an insurance company must fully defend and indemnify asbestos and environmental claims filed against their policyholders. After a plastics company became caught in asbestos litigation, its insurance carrier tried to change its coverage based on technicalities.
The small business benefit: Due to the nature of asbestos claims, it is often impossible to pinpoint exactly when exposure occurred to claimants. It would be unfair if insurance companies were allowed to wiggle their way out of providing coverage to their policyholders. This precedent-setting case will help small business owners stay in business.
Other Important Victories From 2009
The Washington Supreme Court upheld state Initiative 601, which requires a super majority vote in both chambers of the state Legislature in order for the state to pass a tax increase.
The South Carolina Supreme Court overturned a multimillion dollar verdict against an oil wholesaler after it was named in a suit alleging that a mini-mart failed to
check the age of a customer who purchased
alcohol and subsequently got into an
accident. The court ruled that the wholesaler could not be held liable for the actions of one of its customer’s employees.
Call the NFIB Employment Law Hotline
If you’re an NFIB member and have an employment law question, call the free NFIB Employment Law Hotline at 866-678-NFIB.