NFIB Legal Center Weighs-In on Two Major Cases in the Pennsylvania Supreme Court

Date: March 20, 2018

In March 2018, the NFIB Small Business Legal Center filed briefs in two important Pennsylvania cases. First, we filed a brief in Williams v. City of Philadelphia, in challenge to a municipal soda tax. A week later, the NFIB Legal Center filed in Building Owners and Managers Association of Pittsburgh v. City of Pittsburgh, which is an even bigger case for small business employers. The first case will decide whether its permissible under Pennsylvania law for cities to impose taxes on distributors for retail products that are also subject to state sales tax, the second concerns the legality of Pittsburgh’s paid sick leave ordinance. Together these two cases will decide what burdens local authorities can impose on small businesses in Pennsylvania.

Why Pittsburgh’s Paid Sick Leave Ordinance Should be Struck-Down

NFIB Legal Center is fighting the trend toward greater regulation at the local level, state-by-state. But while these cases have focused on minimum wage in other jurisdictions, the fight in Pennsylvania centers upon Pittsburgh’s paid sick leave ordinance. This is because labor activists are trying to get around an explicit statutory prohibition that forbids Pennsylvania home rule cities from imposing burdens on business. They argue that there is a supposed exception for regulation on health issues, which should justify a local paid sick leave mandate; however, if the court should embrace an open-ended exception for health-related regulation, Pittsburgh, Philadelphia and other cities might next look to impose heightened minimum wage, overtime and or other burdensome requirements on employers because one can always imagine a tenuous connection to public health.

We argue in our brief that its vital that the court reject any interpretation that would upset the General Assembly’s policy choice. Small business employers are already swimming in regulatory red-tape at the state and federal level, so there are compelling reasons for the General Assembly’s decision to preempt this sort of municipal action. Running a business is complicated enough without opening the door to municipalities piling-on and balkanizing employment standards.

What is more, if Pittsburgh’s paid sick leave ordinance is allowed, other municipalities will follow suit—but with inconsistent rules from one community to the next. So as a practical matter, it’s important to support uniform employment standards throughout the Commonwealth—otherwise small business employers are really left in a lurch when trying to figure out how to follow inconsistent local mandates. Indeed, if you have a mobile workforce, say a plumbing company, it gets very complicated if Pittsburgh and surrounding communities impose different rules.

Why Philadelphia’s Soda Tax Should be Invalidated

While we were pleased with the lower court decisions striking-down Pittsburgh’s paid sick leave ordinance, the courts have thus far upheld Philadelphia’s controversial soda tax. While we’ve argued throughout these proceedings that state law prohibits double-taxation of products sold in commerce, the courts have thus far sided with Philadelphia in viewing the soda tax myopically as a distributor-level tax. But, they miss the point that distributor-level taxes are passed on to consumers in the form of higher prices.

The good news is that in granting review, the Pennsylvania Supreme Court has opened the door for reversal. In any event, the stakes are high. As we argue in our amicus brief, a decision upholding Philadelphia’s soda tax regime would invite other municipalities to follow-suit in adding taxes on disfavored products. Or worse, a cash-strapped city might look to raise revenue by taxing all products sold in retail at the distributor-level—which would result in consumers paying more, and or businesses losing sales to neighboring communities.

For more thoughts on the soda tax case, check-out John Stossel’s recent segment over at Reason.

Subscribe For Free News And Tips

Enter your email to get FREE small business insights. Learn more

Get to know NFIB

NFIB is a member-driven organization advocating on behalf of small and independent businesses nationwide.

Learn More

Or call us today
1-800-634-2669

© 2001 - 2024 National Federation of Independent Business. All Rights Reserved. Terms and Conditions | Privacy