New study: Nondiscrimination laws don’t hurt small businesses
Republican lawmakers have been arguing that nondiscrimination protections hurt small businesses.
The Senate Business, Labor and Technology Committee wrangled with the issue this winter when Sen. Laura Woods (R-Arvada) led a failed attempt to repeal the Job Protection and Civil Rights Enforcement Act – except for the provision protecting employees 70 and older.
The state law she wanted to gut expands federal nondiscrimination protections to businesses with fewer than 15 employees and makes age and sexual orientation protected classes.
She and others who opposed Colorado’s law banning workplace discrimination argued that the ban leaves small business owners vulnerable to frivolous lawsuits.
“Just one claim that has to be investigated is all it would take to force a company out of business,” said Woods, a small business owner, in committee this February.
Last week, the progressive leaning Bell Policy Center released a report, in response to Woods’ legislation, comparing small business growth in states with employee protections to states without them. According to the report, the presence of nondiscrimination laws does not hurt small business growth. In fact, the numbers suggest protections against discrimination are good for both businesses and workers.
Woods declined to comment on this article.
Most employers don’t want to discriminate, Bell research director Rich Jones told The Colorado Independent, and most employees don’t want to sue.
“But without remedies, it was difficult for employees to actually take their case to court and move it forward,” Jones said. “Having this sort of teeth puts the bad actors on notice to say, ‘Hey, I really can get sued now.'”
House Republicans see some holes in the Bell Policy Center’s analysis.
Minority Leader Brian DelGrosso (R-Loveland) owns three Dominos Pizza franchises and sees himself as a small business owner. He introduced a failed bill last session to exempt businesses with fewer than 15 employees from having to pay punitive damages.
DelGrosso thinks the Bell Policy Center data could be used to draw opposite conclusions.
“The Bell study cherry picked census data to support their assertions and agenda,” he said. “If you look closer at their data, several states that scored lowest on their ranking system actually had the best growth in the number of small businesses.”
Texas ranked the lowest by Bell’s standards, having zero anti-discrimination remedies. But the state added more than 4,200 small businesses between 2007 and 2012. Oregon, on the other hand, has four remedies in place but lost close to 6,000 small businesses in that same timeframe.
DelGrosso argues that looking at how many small businesses spring up or close down is not a reliable measure of economic growth unto itself. “There are many factors that influence the success of start-ups in a particular state,” he said. “It’s highly inaccurate to draw conclusions on legislation based on one loose set of numbers.”
The study also neglects to take population size into account, Republican critics said. With more workers comes greater potential for lawsuits, so comparing the number of complaints filed in Hawaii to the number filed in California doesn’t mean much.
This argument ignores the fact that Bell Policy Center researchers didn’t compare states’ filing rates to each other. The researchers compared the number of lawsuits filed in states before they enacted antidiscrimination laws and after.
Researchers found no spike in lawsuits when states strengthened their nondiscrimination laws.
“Increased filings appear to be more strongly correlated with the Great Recession,” the report states.
If lawmakers once again try to repeal the Job Protection and Civil Rights Enforcement Act, these arguments will be rehashed and the Bell Policy Center staff plan to present their research to lawmakers.
“Hopefully it will put some of these things to rest,” Jones said.
Photo by Kumar Appaiah, Creative Commons, via Flickr.
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