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Regulation
Lessig Strains to Compare His Campaign to Eugene McCarthy’s
Harvard Law professor Lawrence Lessig is running for President on the single issue of adding restrictions to certain electoral speech. In his announcement video, he points to Eugene McCarthy’s 1968 run for the White House. He says in that video:
In 1967 Democratic Senator Eugene McCarthy entered the primary here in New Hampshire to challenge his own party’s sitting president because he feared the most important moral issue of the time, the Vietnam War, was going to be invisible in that election. In four months McCarthy went from almost nothing in the polls to almost beating Lyndon Johnson in the primary and the one issue that no one wanted to talk about became the one issue that no one could ignore.
It seems clear that Lessig intends to set up a parallel between Vietnam and America’s insufficiently regimented electoral system. There’s just one problem with pointing to McCarthy in this case: Eugene McCarthy was able to make that historic primary campaign about Vietnam because a few rich anti-war guys gave his campaign massive direct contributions, something Lessig strongly opposes.
In today’s Cato Daily Podcast (Subscribe: iTunes/RSS/CatoAudio for iOS), I talk to John Samples about the facts of McCarthy’s candidacy and why Lessig’s example doesn’t hold up. We also discuss Stewart Mott, one of McCarthy’s financial backers, and his appreciation for less-than-fully-fettered political speech.
The Right to Anonymous Speech and Association
Since the Enlightenment, anonymous speech has been an integral component of social change, exemplified by Cato’s Letters, the Federalist Papers, and indeed the Anti-Federalist Papers. Accordingly, the Constitution provides a wide berth for the proper “breathing space” that “First Amendment freedoms need … to survive,” NAACP v. Button (1963), by protecting anonymous-speech rights and requiring judges to be skeptical regarding laws that compel disclosure of identifying information.
California’s attorney general, Kamala Harris, has broken with this tradition in demanding that the Center for Competitive Politics (CCP), an educational foundation and public-interest law firm specializing in the First Amendment and political law, disclose its principal donors to the state. The federal district court determined that the demand for this information in the name of “investigative efficiency” was a valid use of state power, and the U.S. Court of Appeals for the Ninth Circuit affirmed that ruling. Importantly, this rule applies to all nonprofit organizations soliciting donations or otherwise operating in California, so the associational chill reaches into the ability of every nonprofit to exist in California while preserving privacy through anonymity.
Cato, joined by the Competitive Enterprise Institute, has filed a brief supporting CCP’s request that the Supreme Court review the case. The Ninth Circuit failed to give proper solicitude to CCP’s constitutional rights here by not applying what lawyers call “heightened scrutiny” at each turn of its analysis. Instead, the lower court applied a party-specific, “as-applied” exception to the general rule that’s only relevant if the compelled disclosure has already survived a broader, “facial” challenge—and it collapsed the clear distinction between the importance of the government interest in disclosure and the extent of the nexus between the disclosure and the asserted interest.
Reviewing Carter’s Deregulatory Record
As health concerns for former President Carter mount, it’s nice to be able to look back on his time in the White House and see something remarkably positive. Carter’s deregulation of air travel, commercial trucking, rail shipping and oil have delivered substantial and ongoing dividends to Americans. In today’s Cato Daily Podcast (Subscribe: iTunes/RSS/CatoAudio for iOS), Peter Van Doren discusses how those policy changes occurred.
An e‑mailer reminds me that Carter’s pen also sealed the deal ending the longstanding prohibition on home brewing of beer for personal consumption. Anyone who appreciates craft beer today owes a small thanks to Carter for getting the feds out of the way of the small-scale tinkerers who eventually became today’s craft beer entrepreneurs.
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Obama Administration Declares War on Franchisors and Subcontractors
In a series of unilateral moves, the Obama administration has been introducing an entirely new regime of labor law without benefit of legislation, upending decades’ worth of precedent so as to herd as many workers into unions as possible. The newest, yesterday, from the National Labor Relations Board, is also probably the most drastic yet: in a case against waste hauler Browning-Ferris Industries, the Board declared that from now on, franchisors and companies that employ subcontractors and temporary staffing agencies will often be treated as if they were really direct employers of those other firms’ workforces: they will be held liable for alleged labor law violations at the other workplaces, and will be under legal compulsion to bargain with unions deemed to represent their staff. The new test, one of “industrial realities,” will ask whether the remote company has the power, even the potential power, to significantly influence working conditions or wages at the subcontractor or franchisee; a previous test sought to determine whether the remote company exercised “ ‘direct and immediate impact’ on the worker’s terms and conditions — say, if that second company is involved in hiring and determining pay levels.”
This is a really big deal; as our friend Iain Murray puts it at CEI, it has the potential to “set back the clock 40 years, to an era of corporate giants when few people had the option of being their own bosses while pursuing innovative employment arrangements.”
- A tech start-up currently contracts out for janitorial, cafeteria, and landscaping services. It will now be at legal risk should its hired contractors be later found to have violated labor law in some way, as by improperly resisting unionization. If it wants to avoid this danger of vicarious liability, it may have to fire the outside firms and directly hire workers of its own.
- A national fast-food chain currently employs only headquarters staff, with franchisees employing all the staff at local restaurants. Union organizers can now insist that it bargain centrally with local organizers, at risk for alleged infractions by the franchisees. To escape, it can either try to replace its franchise model with company-owned outlets — so that it can directly control compliance — or at least try to exert more control over franchisees, twisting their arms to recognize unions or requiring that an agent of the franchiser be on site at all times to monitor labor law compliance.
Writes management-side labor lawyer Jon Hyman:
If staffing agencies and franchisors are now equal under the National Labor Relations Act with their customers and franchisees, then we will see the end of staffing agencies and franchises as viable business models. Moreover, do not think for a second that this expansion of joint-employer liability will stop at the NLRB. The Department of Labor recently announced that it is exploring a similar expansion of liability for OSHA violations. And the EEOC is similarly exploring the issue for discrimination liability.
And Beth Milito, senior legal counsel at the National Federation of Independent Business, quoted at The Hill: “It will make it much harder for self-employed subcontractors to get jobs.” What will happen to the thriving white-van culture of small skilled contractors that now provides upward mobility to so many tradespeople? Trade it in for a company van, start punching someone’s clock, and just forget about building a business of your own.
What do advocates of these changes intend to accomplish by destroying the economics of business relationships under which millions of Americans are presently employed? For many, the aim is to force much more of the economy into the mold of large-payroll, unionized employers, a system for which the 1950s are often (wrongly) idealized.
One wonders whether many of the smart New Economy people who bought into the Obama administration’s promises really knew what they were buying.
Regulatory Incompetence (and King v. Burwell) Could Save the Nuns
Obamacare imposes a requirement that employers provide insurance that covers “preventive care” for women, but does not specify what that entails. The Department of Health & Human Services (HHS) determined that “preventive care” includes all FDA-approved contraceptives, from condoms to the morning-after pill.
While houses of worship were exempted outright from the mandate, other religious orders were not. (And, as we know from the Hobby Lobby case, for-profit employers who object to certain forms of contraceptive don’t have to pay to cover them.) Instead, under an “accommodation” created by HHS and the Departments of Labor and Treasury, an objecting religious organization isn’t required to pay for the offending contraceptives, but they do have to notify HHS, which then modifies their insurance contracts so their insurers cover the objected-to items.
Even though the religious organizations are not paying for the contraceptives, groups like the Little Sisters of the Poor—an order of nuns who provide various kinds of social services—still feel complicit in sin and claim that their free exercise of religion has been burdened.
Cato and law professor Josh Blackman (who recently became a Cato adjunct scholar) have filed an amicus brief supporting the Little Sisters’ request that the Supreme Court hear their case. The Little Sisters raise claims under the First Amendment and the Religious Freedom Restoration Act. Our brief asks the Court to consider a supplemental question: Whether the Departments have the interpretive authority and “expertise” to resolve this “major question” of profound social, “economic and political significance”—to quote Chief Justice Roberts’s majority opinion in King v. Burwell (where he said that courts couldn’t simply defer to the IRS on the important question presented there).
Congress gave absolutely no indication that it delegated to federal agencies the authority to decide which religious groups would be exempted and which could have their religious liberty burdened under an accommodation, or for that matter, how agencies were to design any accommodations. To quote another recent case where the Court refused to defer to an administrative agency, UARG v. EPA (2014), here the agencies are “laying claim to an extravagant statutory power” affecting fundamental religious liberty interests—a power that the ACA “is not designed to grant.”
If the Departments lack the interpretive authority to craft accommodations, then Hobby Lobby provides the rule of decision and the Little Sisters must be exempted from the mandate. Accordingly, the Supreme Court should consider this additional question and conclude that the Departments’ regulatory incompetence prevents them from forcing the Little Sisters to be complicit in what they view as sin.
Bloomberg BNA Podcast on Legal Challenges to ObamaCare
In this Bloomberg BNA podcast, Supreme Court correspondent Kimberly Robinson and I discuss King v. Burwell, Sissel v. HHS (the Origination Clause case), and House of Representatives v. Burwell, (the House GOP’s lawsuit against the Obama administration’s efforts to exceed its powers under the Constitution and the Affordable Care Act).
Keep an eye out for my article on King v. Burwell with Jonathan Adler in the upcoming Cato Supreme Court Review.
Adler and I will be speaking about King at the Cato Institute’s 14th annual Constitution Day symposium on September 17, 2015. Register here.