12/22/2005
The NFIB Legal Foundation was a whirlwind this year, filing briefs and lawsuits, and scoring several important victories for our small-business members. The Foundation worked to defeat burdensome regulations and governmental practices that prevent your small business from succeeding. The following victories are just a sampling of the many you can claim as a victory for your small business.
Major workers' compensation victories
The Legal Foundation had two big workers' comp wins this year. The Tennessee Supreme Court started things off in August when it ruled that workers' comp only covers the loss of earning capacity. In Lang v. Nissan North America, an appellate court had quintupled the plaintiff's original award, based almost exclusively on an assumption that Lang's work-related hearing loss meant he had lost the ability to "enjoy everyday activities." The Foundation's amicus brief argued that this completely undermined the purpose of Tennessee's workers' compensation law, which is designed to compensate for loss of earning capacity. The state's Supreme Court agreed and struck down the appellate court's judicial expansion of the workers' comp statute.
"This win prevented a new standard from becoming a precedent in Tennessee and around the country," said Legal Foundation Executive Director Karen Harned. "Had the court found in favor of allowing the loss of enjoyment award, then workers' compensation costs would have been quick to escalate."
In another workers' comp victory, the Montana Workers' Compensation Court issued a ruling Dec. 12 declaring that a state law permitting workers' compensation benefits to expire once a worker is eligible for retirement benefits is constitutional. The Foundation filed an amicus brief in this case, urging the court to rule that the statute is not only constitutional but also vital for the survival and expansion of small businesses in Montana, since it directly affects workers' compensation costs.
New York asbestos case win
In October, the New York Court of Appeals, the state's highest court, announced a decision that will protect millions of New York small-business owners against liability suits from third-party claimants exposed to asbestos. The court's decision correctly ruled that an employer’s or landowner's duty to provide a safe workplace is limited to employees and does not extend to third parties such as employees' spouses.
The Foundation joined other business groups in challenging a court ruling finding that an employer may be held liable for a nonemployee spouse's personal injury from "secondary exposure" to asbestos. The appeal involved injuries allegedly sustained by the plaintiff as a result of laundering her husband's asbestos-contaminated clothes during the 30-year period he worked for New York's Port Authority.
"The U.S. Supreme Court has already noted that there is an asbestos-litigation crisis in this country. Today, there are more than 300,000 pending lawsuits over the issues, and already, more than 70 employers have been bankrupted. The court's decision to limit an employer's duty to employees will allow New York small-business owners the freedom to concentrate on things they can control, such as their workplace environment, and eliminates the fear of being held liable for unwarranted asbestos claims that they have no control over," said Harned.
Victory in fight for Tax Court fairness
In March, the Foundation scored its first Supreme Court victory and a huge win for individual taxpayers everywhere: the right to fair treatment in the Tax Court.
The Foundation filed an amicus brief last August in the case of Ballard v. Commissioner Internal Revenue Service, arguing that the U.S. Tax Court's refusal to disclose special trial judge reports to litigants violated taxpayers' rights and was unconstitutional.
The Supreme Court overwhelmingly agreed with small business, striking down the Tax Court's unfair practice in a 7-2 decision.
Victory over labor unions
The U.S. Court of Appeals for the Seventh Circuit Court adopted arguments made by the Foundation and struck down a Milwaukee County ordinance that required contractors to sign project labor agreements with unions in order to bid on projects providing county-funded services to the elderly or disabled.
"The bottom line to NFIB members is that PLAs squeeze out small businesses. The Foundation entered this case to help ensure that Main Street businesses have the opportunity to compete fairly for local government contracts. We are very pleased that the Seventh Circuit sided in favor of small business and overturned the ordinance," Harned said.
Win over regulation
Thanks to a recent Foundation victory, small business is one step closer to regulatory fairness. The Regulatory Flexibility Act of 1980 requires agencies to consider the impact of their regulatory proposals on small businesses, analyze effective alternatives that minimize small-business impacts and make analysis available for public comment.
In the case NFIB v. U.S. Army Corps of Engineers, the Foundation argued that the U.S. Army Corps of Engineers failed to follow the RFA when it revised the permit application process for homebuilders and construction firms under the Clean Water Act. The Corps, on the other hand, argued that permitting regulations did not fall under the RFA because the changes were not regulatory and permits did not constitute a final agency action against businesses.
Elizabeth Gaudio, NFIB Legal Foundation senior attorney, said the lawsuit was filed to preserve the integrity of the Small Business Regulatory Enforcement Fairness Act, enacted in 1996 by Congress to ensure regulatory agencies undertake greater review of the impact of regulations on small businesses.
"Congress passed SBREFA to protect small-business owners at the beginning of the regulatory process," said Gaudio. "Congress said to government agencies, 'Do your homework, find out if what you propose will hurt small business and, if it does, look for alternatives that are less burdensome.' Congress wanted agencies to make that decision before imposing new regulatory requirements—not after the damage is done."
