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Well before I decided to run for the Oregon Senate, I
spent nearly three decades as an owner of an animal clinic and animal product
supply store located in Klamath Falls. That experience taught me a great deal
about what is required to manage a small business in Oregon. In addition to the
rigors of day-to-day administration, the efforts to comply with myriad regulatory
hurdles and other burdens are time consuming, troubling and very expensive.
Bills are moving towards passage that should be of great
concern to all Oregon entrepreneurs, as well as anyone considering opening a
business or moving their operations to this state from another area. I view
many of the bills and various proposals being considered by this Legislative
Assembly through the lens of a former small business owner.
Among the most egregious is House
Bill 2386. It passed through the House
Business and Labor Committee Wednesday, March 18 on a 6-5 party-line vote.
Representatives Greg Barreto (R-Cove), Sal Esquivel (R-Medford), Dallas Heard
(R-Roseburg), Jim Weidner (R-Yamhill) and Bill Kennemer (R-Oregon City) all
voted in opposition. The bill is now headed to the House for a full floor vote.
HB 2386 was filed prior to the start of the 2015 session
at the request of Labor Commissioner Brad Avakian. He is the elected
Commissioner of Labor and directs the Bureau of Labor and Industries (BOLI), a state
agency that is charged with regulating all matters related to employment
throughout the state.
If passed by the Legislative Assembly, HB 2386 would
authorize Avakian, and any subsequent Commissioner of Labor, to issue temporary
cease and desist orders to businesses based upon only the allegations of
wrongdoing. Wage and labor disputes are
currently handled through BOLI administrative proceedings, the Employment
Relations Board and cases that are referred by BOLI to circuit courts that have
the proper jurisdiction.
In most cases, the Courts are the appropriate venue for
these matters to be settled when claims are made and a burden of proof must be
met. But HB 2386 seeks to circumvent the checks and balances built into the
system. It consolidates too much of that that authority into BOLI, a state
agency under the executive branch of government.
BOLI currently has the authority to issue cease and desist
orders when conducting investigations into suspected civil rights violations. This
bill extends that authority to the enforcement of several entire chapters of
state labor law.
The text of HB 2386 states that “if the commissioner has
reason to believe that an employer has violated the provisions of (various
statutes), the commissioner may issue a temporary cease and desist order
requiring an employer to refrain from the unlawful practice alleged.” This new
feature would authorize the agency to essentially shut down a business
subsequent to the allegation of violation of labor laws and maintain that
closure until the owner either acquiesces to BOLI demands or prevails in a
contested case hearing or court of law.
My staff printed all the statutes referred to in the bill.
Literally hundreds of potential law violations are encompassed in this nearly
two-inch pile of paper. These statutes do not include an equally large pile of
administrative rules created by BOLI to implement the statutes. One can only
imagine the average small business owner, with all the responsibilities that
come with managing a going concern, digging through these statutes and
administrative to ensure compliance with requirements that are constantly
changing.
Written
testimony in support of HB 2386 was provided by the Service Employees
International Union, Oregon American Federation of Labor and Congress of
Industrial Organizations and the Northwest Workers’ Justice Project (NWJP). The
crux of their written testimony is that this bill will provide BOLI with a
useful tool in combating alleged wage theft.
The testimony from NWJP states that “economic sanctions in
the form of penalty damages or fines are the primary tools available to deter
unscrupulous businesses from cheating workers. Unfortunately, these remedies
can be employed only after the violations have occurred.” It goes on to state
that HB 2386 would allow the Labor Commissioner to take action that would supposedly
“stop violations before they occur.” This language alone should be enough to
cause grave concern for business owners, as well as anyone who believes in the
longstanding principle that people are innocent until proven guilty.
Under HB 2386, businesses would have no right or method to
appeal the cease and desist order made by BOLI until the agency has already
completed an investigation and issued a final order. That final order may not
be available for an entire year. In the meantime, the business could be forced
to remain closed, and all of its employees would be left without their main
source of income. Of course, the alternative for the businessman would be to
agree with BOLI allegations and bow to the Agency’s demands.
This provision is particularly problematic for businesses
that provide critical services, have competitive timelines for product
delivery, or produce perishable goods. Complying with a BOLI cease and desist
order would serve to destroy the value of their service or product.
The bill would also allow BOLI to require a business to
post a bond before the Agency would lift a cease and desist order. BOLI is
authorized to set the dollar amount for a bond to be paid by the employer, but
sets no limit on the amount of that bond. In the event that the employer held in
alleged violation of labor law considers the amount of the bond excessive and
declines to post the bond, the Commissioner is given the authority, without
going to circuit court, to enjoin the company from further activity until the
bond is posted.
A new section of the amended version of HB 2386 states
that “if the commissioner finds that there is just cause for requiring the
bond…the commissioner shall enjoin the employer from doing business in this
state until the requirement is met, or shall make other, and may make further,
orders appropriate to compel compliance with the requirement.” Under existing
statute, that bond is required for a definite future period, not to exceed six
months. The amended version of HB 2386 requires a bond for “a future period
that the commissioner considers appropriate.”
Further amendments were adopted by the Business and Labor
Committee make HB 2386 even worse. One set of amendments changes existing
statute to replace the word “court” with “commissioner,” as in labor
commissioner, in several instances.
When I was operating the animal clinic, I made sure that
my employees had competitive wages, vested health insurance and retirement
plans that also offered a profit sharing plan. This enabled them to be invested
in the overall success of the business, as well as their own futures.
Small business owners throughout Oregon, and beyond, make
tremendous sacrifices to make certain that they make payroll each and every
month. Many employers pay their employees before they pay themselves for their investment,
labors, other efforts and worry.
But bills like HB 2386 ignore all the good-faith efforts
made by entrepreneurs who create jobs, provide opportunities and produce tax
revenues for essential government services. They replace it with heavy-handed
actions based largely on suppositions and allegations of violations of employee
labor law.
It is entirely possible that I might have chosen a
different path in life if these kinds of laws and regulations had been in place
when I initially went into business. That different choice would have ensured
that the more than 20 people that my business employed for nearly 30 years
would have been forced to find other work or join the ranks of the unemployed.
For all the rhetoric we hear on the campaign trail about
jobs and the economy, it is laws like those proposed under HB 2386 that make
business owners reluctant to make the kinds of investments necessary to expand
their operations and hire more employees. That only serves to limit the
opportunities available to working Oregonians who are otherwise forced into
public assistance and dependence on government programs in the absence of the
ability to pursue employment and, ultimately, the American Dream.
Please remember--if we do not stand up for rural Oregon, no one will.
Best Regards,
Doug
Senate District 28
Email: Sen.DougWhitsett@state.or.us I Phone: 503-986-1728
Address: 900 Court St NE, S-311, Salem, OR, 97301
Website: http://www.oregonlegislature.gov/whitsett
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