Asking the U.S. Supreme Court to Reign-in California

Date: August 02, 2018

Small business owners often view California with contempt. But while it is easy to shrug-off California’s radical regulatory agenda, it’s no longer a laughing matter when other states follow suit. For this reason, the small business community is especially concerned with the California Supreme Court’s recent decision in Solus Industrial Innovations LLC, which authorized shock-and-awe penalties for OSHA violations on top of previously imposed fines.

No one disputes that occupational health and safety is important; however, when a business has already paid serious fines, for an inadvertent mistake, there is no reason to pile-on further penalties. But that is exactly what the California Supreme Court authorized in Solus. And worse, the opinion invites other states to follow suit.

Here the Orange County District Attorney seeks to penalize a company $2,500 per day for each employee under state consumer protection laws. Likewise, a district attorney, in any other state, might follow suit. Indeed, every state has consumer protection laws that might trigger additional penalties for regulatory violations.

But, the U.S. Supreme Court has said that states are prohibited from regulating health and safety standards on their own. Instead, they must seek express approval from the U.S. Secretary of Labor. This ensures that the Secretary can veto proposed standards that are unduly burdensome.

Unfortunately, the Solus decision completely undermines the process that Congress intended. Not only does this invite unduly burdensome penalties throughout the country, but it also undermines the vital precept that the regulated community should have an opportunity to voice concerns with regulatory changes. For these reasons, the NFIB Small Business Legal Center is asking the U.S. Supreme Court to take this case—now styled as Emerson Electric—to safeguard small business rights throughout the country.

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