While the federal government has shifted toward deregulation, states have increasingly enacted mandates and regulations that place heavy burdens on small business owners. These state actions often introduce requirements that are not only difficult to comply with but also, in some cases, unlawful. To address these increasing challenges, the NFIB Legal Center actively responds by filing lawsuits and submitting amicus briefs in state courts. These legal actions help ensure that small businesses are represented and their concerns are heard during crucial state legal battles.
WORKER CLASSIFICATION UNDER SCRUTINY IN MINNESOTA
NFIB joined a coalition of business organizations and filed a lawsuit in a Minnesota state court challenging a new independent contractor rule that was passed as part of a catch-all omnibus bill. The statute established a fourteen-factor test for determining independent contractor classification, making it nearly impossible to hire independent contractors. It also imposes severe financial and criminal penalties on even well-meaning small businesses that fail to comply. NFIB’s lawsuit contends that the Minnesota bill violates the Minnesota Constitution’s Single Subject and Title Clause because it addresses multiple subjects and lacks a clear title. Therefore, we argue that the new independent contractor statute is unlawful, and the courts should prevent the state from enforcing it.
A WIN AGAINST OREGON’S COSTLY PROJECT LABOR AGREEMENT MANDATE
The Legal Center achieved a significant victory in Oregon by challenging an overly broad union mandate. Last year, we filed a lawsuit against Governor Tina Kotek’s executive order requiring state agencies to negotiate project labor agreements (PLAs) with labor organizations for all state- managed construction projects. Shortly after filing, a circuit judge temporarily halted the PLA mandate, and on March 12, 2026, the judge permanently blocked it, ruling the mandate unconstitutional.
Our challenge successfully argued that a PLA mandate goes far beyond the governor’s authority and intrudes on the state legislature’s authority. Thanks to the court’s decision, small business owners will be able to continue to bid on public projects without needing to comply with the governor’s unlawful mandate.
WASHINGTON’S DRACONIAN ENVIRONMENTAL PENALTIES CHALLENGED
In March, the Legal Center submitted an amicus brief supporting a small business owner’s legal challenge against bureaucratic overreach before the Washington Supreme Court in the case Fode v. Department of Ecology. The case involves a state agency that hastily imposed hundreds of thousands of dollars in fines instead of providing a farmer with the necessary technical assistance mandated by state law. Our brief contends that the state has a duty to help farmers find ways to achieve their goals—specifically, to assist them in securing water rights—rather than swiftly issuing warnings and fines.
Although states can burden small business owners as easily as the federal government, NFIB’s Legal Center is here to challenge unlawful requirements and mandates as they occur, offering much-needed regulatory relief for NFIB members.
