On gay rights bill, Republican leaders worry for small businesses — but should they?


House Speaker John Boehner believes ENDA would hit small business particularly hard. Some small-business leaders don’t see it that way. (Alex Wong/Getty Images)
November 8, 2013

Republican leaders are already pushing back against gay rights legislation approved by the Senate on Thursday, and some appear particularly worried about the bill’s likely effects on small businesses.

But should they be?

Called the Employment Non-Discrimination Act (ENDA), the proposal would prohibit employers from discriminating against job applicants based on their gender identity or sexual orientation. Similar bills have been introduced nearly every year for the past decade, and each one has eventually been stymied by conservatives on the Hill.

On Thursday, senators voted 64-32 to approve the latest version, however its chances look bleak in the House. Earlier this week, House Speaker John Boehner (R-Ohio) announced his opposition to the proposal, arguing that the legislation “will increase frivolous litigation and cost American jobs, especially small business jobs.”

Sen. Marco Rubio’s (R-Fl.) office issued a similar warning about the bill, with his deputy secretary, Brooke Sammon, saying that the senator “is currently studying what kinds of burdens it could impose on small businesses.”

It reflects a shift in the argument from conservatives, who have traditionally pushed back against the legislation for moral or faith-based reasons. Suddenly, the argument is largely an economic one.

In explanation of the speaker’s position, for instance, Michael Steel, Boehner’s press secretary, cited estimates by the Congressional Budget Office that the bill would lead to a 5 percent increase in workplace discrimination lawsuits. That would cost about $47 million, mostly for the government to hire additional workers to handles those cases.

Steel added in an e-mail that “many private employers will face additional costs as well, and those costs will lead to job losses. . .especially for small businesses that cannot afford the legal fees.”

Sammon agreed, saying “any new federal civil rights legislation must be clearly drafted and easy to follow so that businesses, especially small businesses, are not exposed to frivolous and unwarranted litigation, and Senator Rubio has concerns that this bill doesn’t do that.”

However, small business leaders do not seem nearly as concerned.

In part, that’s because the vast majority of employers would be exempt from the law, which would only apply to firms with more than 15 workers. The Small Business Administration’s latest employment data show that roughly 85 percent of the nation’s 5 million small employers would be exempt from the rules in the law.

Meanwhile, in the 22 states that already have laws similar to ENDA, there have been “relatively few employment discrimination complaints based on sexual orientation and gender identity,” according to a Government Accountability Office report released in July.

“As a former business owner, there are always going to be concerns over frivolous lawsuits, but that doesn’t change one way or the other with this bill,” John Arensmeyer, president of Small Business Majority, a small business lobbying group, said in an interview, noting that those concerns have not prompted lawmakers to reconsider protections for employees based on race and gender. “In this country, we have a system in which people are free to file lawsuits, but that’s not a reason not to protect these groups.”

In a recent poll taken by his organization, more than two-thirds of small-business owners said federal laws should prohibit workplace discrimination against gay, lesbian and transgender individuals, and a large majority did not know such groups are not included under current federal law.

Many respondents that already have policies in place protecting those individuals from discrimination say it has helped them attract and retain some of their top employees.

The Small Business Majority’s position is hardly surprising, as the group tends to support Democrats in Washington. On the opposite end of the political spectrum, though, the National Federation of Independent Business, which tends to lean to the right, has not stepped up to support Boehner’s and Rubio’s concerns on behalf of Main Street.

Cynthia Magnuson, a spokesperson for the small-business advocacy group, said the NFIB “does not have a position on ENDA,” and while she says the group’s members are “committed to providing workplaces that are free from discrimination,” the current bill “isn’t really on [their] radar screen.”

“Most small-business owners are more concerned about health care costs, tax rates and the overall volume of regulations coming out of the federal government,” Magnuson added.

Molly Day, vice president for the National Small Business Association, said that while her organization is wary of any legislation that could prompt more damaging lawsuits, it too has elected not to take a formal position on ENDA.

Circling back to his group’s polls, Arensmeyer said the bill “seems it would either have no impact or perhaps some benefit, but we really can’t see where the downside would be for small businesses.”

Follow J.D. Harrison and On Small Business on Twitter.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he manages the Post's On Small Business blog.
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