Rich Jones, policy and research director of the Bell Policy Center
The left-leaning Bell Policy Center released a report this week that casts doubt on whether tougher anti-discrimination laws, such as those passed in Colorado in 2013, hurt small businesses that might have the toughest time paying fines and high punitive damages awarded in court.
The center compared business growth in states that have enacted tougher anti-discrimination laws and those that haven’t. Research by two of the center’s policy fellows, Kristen Jefferson and Sarah Freeman, indicated states with stronger laws have stronger small-business growth than those that don’t.
Rich Jones, the Bell Policy Center’s director of policy and research, said a costly lawsuit and fine could very well hurt or kill an individual small business, but cases of that happening are rare — too rare to put a dent in the overall economic picture. Nonetheless, it’s the central argument against beefing up anti-discrimination laws.
“The vast majority of businesses treat their employees right,” he said. “The vast majority of workers are good employees who want to do their jobs and do their jobs well … They don’t come to work looking to sue somebody.”
“We found no statistically significant differences in the number or percentage growth of small businesses in states with additional anti-discrimination remedies and those without. We were also unable to find any major increases in filing rates in states that added remedies or additional protected classes. Arguments that strong anti-discrimination remedies hurt small business growth, such as the claims used in the 2015 attempt to repeal the Job Protection and Civil Rights Enforcement Act of 2013 in Colorado, are not supported by the evidence. In fact, the findings refute those arguments.”
— Bell Policy Center report.
Jones said frivolous lawsuits are weeded out by the courts, and lawyers and individuals who file those cases risk being fined or paying both sides’ legal fees.
Tough laws, however, are preventive medicine if “bad actors” are aware they risk serious penalties for discrimination, whereas weak or non-existent laws invite discrimination. Federal laws apply only to businesses with 15 or more employees.
The issue has political history in Colorado. In 2013, tougher state anti-discrimination laws, allowing businesses with fewer than 15 employees to be sued for punitive damages in discrimination cases and adding sexual orientation to the list of protected classes.
In the last session, DelGrosso filed with fewer than 15 employees from punitive damages. The bill was killed by Democrats in its first committee hearing.
Rep. Brian DelGrosso,
R-Loveland
Statehouse Republicans thought the study was cobbled together with the data that supports a foregone conclusion.
“Anybody can cherry pick data and have a study that says whatever they want it to say,” DelGrosso said.
He said the study should have measured new jobs, not new businesses. “Just because you try to start a business or file with the secretary of state’s office doesn’t mean you’ll ever hire anybody,” he said. “Looking at that doesn’t say anything about job growth, and that’s the measurement of how strong your economy is.”
The raw numbers in the report could be re-spun to make the opposite case, according to the House GOP analysis. Texas, for instance, had a composite score of 0, meaning the weakest measurement of state anti-discrimination laws, but it gained 4,208 new businesses between 2007 and 2012. Texas has a population of about 27 million, meaning more workers and potentially more lawsuits. Oregon had the highest score, 4, on a population of about 3.8 million, and lost 5,648 small businesses.
The Bell Policy Center said that’s not an accurate comparison. Different states vary, but overall, as the report states, there is no correlation between stronger anti-discrimination laws and small-business growth based on either percentage growth or growth in the number of small businesses.
The Bell Policy Center researchers said they also found no increase in discrimination filings when laws are expanded to include more protected classes.
DelGrosso, who owns several pizza restaurants, said there are too many other factors that can sway the number of small-business startups — taxes, overall economic growth, location, among them.
“There are lots of reasons why a small business makes it or not,” he said. “This is just one component.”
The full report is .
