Attorney General Ramps Up To Hunt for Corporate Bias

Posted on March 4, 2020 by Stephen D. Haner
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One intrusive employment law change opposed by business groups was finally watered down in the late stages of the 2020 Virginia General Assembly, but others are passing and will be actively enforced by a phalanx of new state investigators and lawyers.
The final state budget, still in negotiation, could add as many as five new enforcement staff to the Office of the Attorney General to seek out and prosecute discrimination in Virginia’s workplaces, using old and new definitions of what is prohibited.  Another 15 investigators may be added to the Department of Labor and Industry to enforce a host of new employer requirements. 
The proposal which lost its impact had previously been discussed in a previous column.  House Bill 624 as it passed the House of Delegates forced employers with 100 or more workers in Virginia to file detailed payroll data with the Human Rights Division of the Office of the Attorney General.   The substitute to House Bill 624 removes all the extensive reporting requirements, at least for now.
Instead the Attorney General’s Office will start a stakeholder process to explore what information might be needed to undertake state-level enforcement of laws against wage and race discrimination, and how that might work.  The House patron, Delegate Chris Hurst, D-Blacksburg, told the Senate General Laws and Technology Committee he intends to keep pushing for the state to seek out offenders.
There are three other employment or anti-discrimination laws the legislature will be looking to Attorney General Mark Herring to aggressively enforce. 
One, called by advocates the Virginia Values Act (House Bill 1663), was also amended.  As it passed initially, it allowed the aggrieved to ask for unlimited punitive damages, disregarding the $350,000 cap in Virginia law. The punitive damages cap was put back into the bill after a major lobbying effort by the business community, including some of the large companies that had initially endorsed the bill.  The House and Senate versions are now reconciled and greatly expand protected classes. 
The Attorney General will also have new enforcement authority against alleged discriminatory practices towards pregnant applicants or employees, under House Bill 827.  That bill has received little attention, but it creates the same opportunities for the complainant to sue in court for actual and punitive damages. 
Finally there is House Bill 1418, which extends to very small employers, with at least five employees, the prohibition and penalties under state law for harassment and sexual discrimination. Along with new causes of action in civil court, it establishes the Office of Attorney General as a place to send initial complaints and allows it take over the enforcement action.
In several venues over the past few weeks, advocates worried about the flood of lawsuits coming and the possibility of unlimited punitive damages were usually met with no sympathy from legislative advocates. One of the House bills had a provision allowing the defendant to recover attorney fees if the court found the complaint was clearly frivolous or brought in bad faith. That protection was promptly stripped out of the bill by the Senate.  Efforts by Republicans to exempt religious institutions were all rejected. 
Five new positions is not huge growth given the overall Attorney General’s headcount of 467 in the introduced budget. Herring might not be limited to state-funded staff, depending on a budget provision still being debated.
The Senate version of the budget includes a language provision to prevent Herring from seeking or accepting additional staff funded by outside entities. In other states, private activist groups have funded additional legal positions in state agencies dedicated to issues such as regulating carbon emissions or guns. That was prohibited for Virginia in the current budget cycle, but Governor Ralph Northam removed the restriction in his introduced budget bills, leading to fears that Northam planned to allow special interests to start funding positions in the Attorney General’s office – a bad practice, whether done by Democrats or Republicans. 
While the Senate has put it back, an effort on the House floor to put the restriction into its budget failed, but it could reappear in the final conference report. Republicans warned that if this becomes the practice, there will be another Republican attorney general someday and Democrats will regret the precedent.
It isn’t just the Office of the Attorney General growing stronger, of course.  Both the House and Senate are proposing more money and people for enforcement activities by the Department of Labor and Industry. Governor Northam’s introduced budget added two positions, and the Senate won the bidding for most additions with another 13 new positions, costing $2.5 million over two years.  What will they seeking to enforce?  The Senate specifically cited: 

  • Senate Bill 7, which creates a new state minimum wage substantially higher than the federal $7.25 per hour.  The final wage level is still in negotiation, but once chosen an more enforcement will be available.
  • Senate Bill 8, which establishes the required payment of prevailing wages on construction contracts for state and local projects, in effect a state Davis-Bacon Act, and creates a complaint process for covered employees.
  • Senate Bill 48, which prohibits firing or any other retaliation against an employee who has complained about unpaid wages.
  • Senate Bill 481, which provides all private employers with 15 or more workers must provide paid sick leave; and
  • Senate Bill 662, which prohibits discharge or any other retaliation against an employee who complains his position has been misclassified to prevent payment of employee benefits.

So far, that adds up to nine bills creating new protected classes or prohibited practices that will leave an employer vulnerable to state review and punishment, including court actions. 
Climate change can apply to the business climate, as well.

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Stephen D. Haner
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About Stephen D. Haner

Stephen D. Haner is Senior Fellow for State and Local Tax Policy at the Thomas Jefferson Institute for Public Policy. He may be reached at [email protected].
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