The Great Divide: Small Businesses, Lawsuits and Jobs

A few years ago, I sat in on some bi-partisan focus groups run by a well-known polling firm. The topic had to do with people’s views about litigation. One exchange really stuck in my head. The moderator asked the group if they thought limiting people’s ability to sue corporations that harm or cheat them would improve the economy and create jobs. Here was the general reaction: “Of course not. That’s ridiculous.” Data and studies confirm this, of course, like one from the Economic Policy Institute. EPI found that weakening people’s legal rights could actually “slow job growth.” But who needs studies when you have common sense?

I bring this up because over the next couple days, the U.S. House of Representatives is voting on a series of bills, which were just rammed through the House Judiciary Committee without a single hearing. These bills would make it nearly impossible for harmed individuals and small businesses to sue in court. It’s as if politicians think voters sent them to Washington with an urgent mandate to rig the courts against everyday people. Can’t imagine what they’re thinking.

We don’t know the type or scope of “PR spin” that will be used by proponents of these measures. “Spin” is really all you have when pushing unpopular bills that prevent harmed and defrauded people from getting into court, concocted in back rooms by lobbyists for giant corporations. Indeed, we wouldn’t be surprised to suddenly see the irresistible “J” word make an appearance. Maybe they’ll try to say that small business JOB-creators are clamoring for such legislation, which also happens to shut them out of court (like when big corporations steal their money). So let’s just shut down any spin right now.

Here is what we know. Internal small business surveys show - and they have for many years - that restricting lawsuits, or the “cost” of lawsuits, are issues of less importance to small businesses than almost any issue they could possibly face, or on which they want lawmakers to focus. Take, for example, years of surveys from the National Federation of Independent Business, which fashion’s itself as the nation’s premier small business association. According to the NFIB’s most recent small business survey, “Cost and Frequency of Lawsuits/Threatened Lawsuits” ranked 68 out of 75 possible issues of concern to small businesses. It was listed among the problems of least concern to small business members. It was of less concern to them than “Access to High-Speed Internet.”

And NFIB isn’t alone. When National Small Business Association members were asked, “What are the three most significant challenges to the future growth and survival of your business?” the issue of “lawsuits” was not even among the 16 choices. When asked, “Which one of the following issues do you believe Congress and President Trump’s administration should address first?” only 1 percent of respondents selected “tort reform” from the list.

Even members of the National Manufacturers Association (NAM) agreed this is a non-issue. Small businesses (i.e., “those with fewer than 50 employees”) and medium-sized businesses (i.e., “those with between 50 and 499 employees”) comprise about 70 percent of responses to NAM surveys. Respondents were asked to indicate their primary business challenges from a list of options. The issue of “lawsuits” was not even on the list. Respondents were also “given the opportunity to submit other challenges affecting their business aside from the choices given in the survey question.” Lawsuits were not mentioned among the 13 sample comments included in the report.

M&T Bank, Bank of America and Wells Fargo all surveyed small business owners about their top concerns, or about what today’s lawmakers could do to help small businesses grow. Again, “lawsuits” were not mentioned as issues of concern in any of these surveys. (See these surveys and more here.)

No doubt business lobbyists may try to link the issues of small businesses, lawsuits and jobs. They may come up with lobbying “push polls” that defy common sense, not to mention actual facts. But it’s simply not possible to spin their way out of surveys that go back many years, and repeatedly reach the same results. I don’t know about you, but it sure seems to me like lawmakers who pursue an anti-litigation agenda are dishonoring and disregarding the expressed views of America’s small business owners, who have never asked for these bills. Nor have the rest of us. #RightsAtRisk

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