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More Lawsuits: Just What the Economy Needs

Posted By Andrew M. Grossman On September 16, 2008 @ 11:33 am In Economics | Comments Disabled

As Americans watch the financial markets agog at what’s next and tighten belts for fear of slowdown or even recession, Congress chugs merrily along on track to bulk up labor law and allow more lawsuits against employers.

Already, labor law experts are expecting a surge in lawsuits [1]if the economy turns downward and employers start making layoffs. That’s the last things businesses need in tough economic times and will no doubt put a brake on hiring when the economy turns around. And needless to say, piling the massive legal costs of often frivolous lawsuits on employers won’t speed that recovery one bit—quite the opposite, in fact.

Experts say the situation may be worsened due to one of the Democratic Congress’s top agenda items, the ADA [Americans with Disabilities Act] Amendments Act, which has now passed the House and the Senate in slightly different forms and is expected to be ready for the President before Congress splits town later this month. The current ADA already covers many employees beyond those most Americans would consider to be disabled and in need of protection, such as individuals with sleeping disorders [2]and erectile dysfunction [3] in recent cases [4]. But as one labor attorney speaking at an American Bar Association conference put it, under the Act, “We’re going to have more folks covered, and these kinds of claims are going to be increasing even more.”

Moreover, the legislation threatens to raise regulatory compliance costs for small employers [5], putting a direct damper on hiring.

This is not the kind of bill that you pass if you take the current economic situation, and the risk of a downturn, seriously.

Still, Congress has the opportunity to make the legislation less bad. The Senate version of the bill, though no winner, seems likely to impose fewer costs on employers [6]than the House version and to lead to less legal risk and fewer frivolous lawsuits.

A more thoughtful Congress would spend this month considering how to knock down barriers to job creation and how to lighten the regulatory load that’s breaking the backs of too many businesses in these uncertain times.

But you go to legislate with the Congress that you have, and this Congress appears more concerned with socking it to Wall Street (already on the ropes) than lending a hand to the businesses on Main Street. So the best we can hope for, at this point, is a bill that does the least damage possible.

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URL to article: http://blog.heritage.org/2008/09/16/more-lawsuits-just-what-the-economy-needs/

URLs in this post:

[1] expecting a surge in lawsuits : http://lawprofessors.typepad.com/laborprof_blog/2008/09/predictions-on.html

[2] sleeping disorders : http://www.law.com/jsp/article.jsp?id=1202423071153

[3] erectile dysfunction: http://www.law.com/jsp/article.jsp?id=1202423325316

[4] recent cases: http://www.pointoflaw.com/archives/2008/08/ada-amendments.php

[5] threatens to raise regulatory compliance costs for small employers: http://www.heritage.org/Research/LegalIssues/tst071508a.cfm

[6] seems likely to impose fewer costs on employers : http://www.heritage.org/Research/LegalIssues/wm2028.cfm

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