Where things stand with Republican bills targeting Iowa workers

Republican attacks on working Iowans have received less attention this year than in 2017, when new laws shredded public employee collective bargaining rights, blocked local governments from raising the minimum wage, and reduced workers’ compensation benefits, especially for those who hurt their shoulder on the job.

But below the radar, GOP lawmakers have moved several bills lately that would make life harder for working people, including some facing the difficult circumstances of unemployment or workplace injury.

SIGNED INTO LAW: FEWER RIGHTS AND LEGAL OPTIONS FOR FAST-FOOD WORKERS

House File 327 was a low-profile bill. To my knowledge, no media reported on the proposal while it was pending or after its passage. But it could affect thousands of Iowans employed at franchise restaurant chains.

Alison Ver Schuer, a research analyst on the Iowa House Democratic staff, prepared a helpful summary of the bill’s origins and provisions.

Like similar measures introduced in other states, this bill stemmed from a 2015 decision by the National Labor Relations Board, which

ruled that franchisors are closer to traditional employers for purposes of federal labor laws (minimum wage, private sector collective bargaining rights, ACA [Affordable Care Act] small business healthcare, etc.). Additionally, this case defined ‘joint employment’ as a company exercising any control over working conditions or reserving the authority to do so – which potentially puts franchising headquarters on the hook (liability wise) for working conditions/labor laws IN ADDITION TO the individual franchisee.

Last year, Ver Schuer wrote,

McDonald’s was forced to settle a US Labor board case in order [to] avoid NLRB ruling that they are considered a ‘joint employer’ of workers at McDonald’s franchises and thus liable when franchisees violate federal labor laws. A Union-backed worker advocacy group filed dozens of legal claims on behalf of McDonald’s employees alleging cause for termination was participating in protests advocating for higher wages. A ruling against McDonald’s would have potentially upended franchising models by making franchisors (like McDonald’s) vulnerable to lawsuits and requiring their entities to bargain with unions representing franchise workers.

The key passage in House File 327 states that a franchisor (the large company associated with the brand) “shall not be considered to be an employer” of someone working at a franchisee (an individual restaurant location) unless one of two conditions apply: either the franchisor and franchisee have agreed to that relationship in writing, or the workers’ compensation commissioner has determined that the franchisor “exercised a type or degree of control over the franchisee or the franchisee’s employees that is not customarily exercised by a franchisor for the purpose of protecting the franchisor’s trademarks and brand.”

Under the bill, a franchisor would not be liable for any franchisee’s actions related to workers’ compensation, wage payments, minimum wage requirements, unemployment compensation, or civil rights protections.

Republican State Representative John Wills spent less than 25 seconds explaining this bill during the House floor debate on March 12. No Democrats rose to speak, which is unusual for a bill that doesn’t subsequently pass unanimously. House members approved the legislation along party lines, 51 votes to 45.

When the bill came to the Senate floor on March 25, it took Republican State Senator Carrie Koelker less than a minute to read out her opening remarks. She argued the bill was necessary because a National Labor Relations Board ruling “changed decades-long precedent.” Twenty other states have enacted similar legislation, Koelker added.

Democratic State Senator Nate Boulton, who practices employment law, articulated “very serious concerns” about the bill’s potential impact on “key and fundamental workplace rights.”

First, he pointed out, the bill creates the presumption that someone is not an employee of a company, even though the worker is probably wearing a uniform bearing that company’s logo. The bill gives employees no voice in the arrangement and no say about their status. Franchisors (like McDonald’s) and franchisees (who operate the local restaurants) can control the “industry standard” that would influence the workers’ compensation commissioner’s findings. If someone gets hurt on the job, the large chain wouldn’t be responsible for helping the injured person.

We’re basically saying, industry, tell us how you want to be policed. […] Again, that’s offering very little protection for the employee in that relationship. So when things go wrong, we’ve set up another shell in the shell game. […]

So I guess, congratulations, we’ve found another inventive way to get employees out of workplace protections.

While questioning Koelker about the bill, Boulton noted the franchisor can control how the building is painted, the prices for different menu items, how many tables are in the restaurant, how many employees should be hired, and what their hours should be. How can these companies be “controlling really everything about the business,” but not accountable when a worker gets hurt?

“Well, they just want to protect their brand,” Koelker replied, adding that we want to encourage franchisors to locate here. She cited Pizza Ranch as an example, mistakenly saying that company operates 10,000 restaurants in Iowa (it’s really only 76).

Boulton agreed: the goal is protecting the brand of large companies. “We’re protecting their brand, but not you. This is bad legislation, this is a bad idea. This is encouraging abusive practices.”

Republican State Senator Jake Chapman denied the legislation would “create a new loophole.” He asserted that Iowa already has extensive law related to franchises and claimed the state would “go after” people who abuse its provisions (like classifying employees as “independent contractors” to avoid paying unemployment or workers’ compensation).

Boulton rose to speak a second time to challenge Chapman.

We have set up a system where bad actors police themselves and the franchisor/franchisee relationship when it comes to how they treat their employees. That’s a problem. It’s especially a problem when a lot of these franchises are franchisors that are from out of state, that don’t have any connection or commitment to the state of Iowa except to harvest our money.

And when we say things like, “We’re doing this to protect the brand,” we have to wonder: at some point, who’s going to step up and protect the hard-working Iowans who represent that brand?

When it was his turn, Democratic Senator Rob Hogg informed colleagues that he had scanned Iowa Code 537A.10 on franchise agreements after listening to Chapman. Hogg found nothing in that statute about protecting workers. It’s all about protecting franchisees. Under House File 327, an employee exposed to hazards at work wouldn’t have recourse against a franchisor. If the franchisee “goes belly up,” the worker will have no recourse against the local employer either.

Koelker’s a rookie lawmaker, and her final remarks showed that she wasn’t up to the task of running a controversial bill on the Senate floor. Speaking for less than 30 seconds, she didn’t address any substantive arguments Democrats had raised. “If we don’t have a clear standard like this one on this bill, then why would a franchisor enter into a franchisor/franchisee agreement? They would just be the corporate structure like Starbucks, where they control all of their employees,” Koelker said before urging colleagues to vote yes.

Fortunately for her, facts and logic matter little to GOP legislators. Senators approved the bill along party lines, 32 votes to 18.

Governor Kim Reynolds signed House File 327 into law on April 9. The governor’s office gave the measure only a passing mention in a news release.

HEADED TO GOVERNOR: CUTTING SOME IOWANS OFF FROM WORKERS’ COMP

Senate File 507 is a short bill inspired by the Iowa Supreme Court’s November 2018 ruling in Bluml v. Long John Silvers. Jason Bluml had a seizure at work and suffered a severe head injury after falling backwards onto a ceramic tile floor. An administrative law judge denied his claim for workers’ compensation benefits. Iowa’s workers’ compensation commissioner agreed, saying

idiopathic falls on a level floor are not compensable regardless of the hardness of the floor on the theory that a floor presents a risk or a hazard encountered everywhere and that such risks and hazards presented by a level floor are thesame risks which confront all members of the public.

“Idiopathic” in this context means the person’s workplace conditions didn’t cause the fall.

Since evidence indicated that the hard tile floor exacerbated the extent of Bluml’s injury, the Iowa Supreme Court disagreed with the commissioner’s conclusion. Justice Edward Mansfield, among Iowa’s most conservative judges, wrote the opinion for a 5-1 majority.

Logically, whether the condition of a floor, just like any other workplace condition, posed an increased risk of injury should be determined factually, rather than predetermined by some legal “rule.” […]

Given that the underlying question is really a factual one, i.e., whether the conditions of employment increased the employee’s risk, it makes sense for that question to be decided on a case-by-case basis by the commissioner based on the factual record.

In just one sentence, Senate File 507 would overrule the Supreme Court’s decision.

Personal injuries due to idiopathic or unexplained falls from a level surface onto the same level surface do not arise out of and in the course of employment and are not compensable under this chapter.

Boulton offered an amendment to revise the bill as follows:

Unless there is a specific workplace factor increasing the extent of injury, contributing to the cause of injury, or increasing the likelihood of injury, personal injuries due to idiopathic or unexplained falls from a level surface onto the same level surface do not arise out of and in the course of employment and are not compensable under this chapter.

Without his amendment, Boulton warned, the bill would create an exception to workers’ compensation. If some personal health condition set off a fall that led to severe injuries (such as falling into a piece of equipment or machinery), the worker would not be eligible for benefits. The Republican floor manager, State Senator Michael Breitbach, disputed Boulton’s interpretation of how the law would affect future claims arising from workplace falls. Boulton’s amendment failed along party lines, and the bill passed by the same 32 to 17 margin.

The April 9 House debate on Senate File 507 was contentious, lasting for more than an hour. Democrats offered six amendments. The presiding officer ruled most not germane, and Democratic efforts to force consideration of them anyway failed by party-line votes.

Finally, State Representative Mary Wolfe offered an amendment identical to what Boulton proposed in the upper chamber. The language would clarify and support the Iowa Supreme Court’s reasoning, allowing benefits to be paid if “there is a specific workplace factor increasing the extent of injury, contributing to the cause of injury, or increasing the likelihood of injury” from an idiopathic fall.

During the debate, Wolfe emphasized several times that Justice Mansfield is not liberal; in fact, he was on Donald Trump’s list of possible U.S. Supreme Court appointees. In addition, Wolfe reminded colleagues that the ruling didn’t overturn any long-established precedent. On the contrary: it was a “matter of first impression” in Iowa courts.

House members rejected Wolfe’s amendment mostly along party lines, except that Republican State Representative Jeff Shipley voted with Democrats.

During the last speeches on Senate File 507, Democratic State Representative Bruce Hunter zeroed in on the fact that this bill refers to “idiopathic or unexplained falls.” Because many companies employ doctors who evaluate workplace injuries,

It gives the employer and the employer-owned doctor the right to tell a worker–a worker who is hurt, a worker that probably hasn’t gone through the system before, and doesn’t know what his rights are […]. And they’re going to tell this poor individual, that I’m sorry, we don’t know what caused your injury. We don’t have to pay for it.

Simply stated, that’s what Senate File 507 does, that’s what it means, and that’s the reality. […] Ladies and gentlemen of the House, vote no on this piece of crap.

During his closing remarks as floor manager, State Representative Dave Deyoe denied that the bill was “chipping away” at workers’ compensation. The Iowa Supreme Court chipped away at the law, and “we’re simply returning it to the understanding” that existed before the Bluml case.

Deyoe also claimed, “Insurance companies have not talked to me about this bill. They’re not that interested in this. If the costs go up, they just raise premiums. It’s not, it’s not an issue that the insurance companies are all that interested in.”

While I can’t speak to conversations Deyoe had with industry representatives, the lobbyist declarations show an array of insurance companies and business advocacy groups registered in favor of Senate File 507, while a number of labor unions lobbied against it.

The House approved the bill on final passage by 55 votes to 44, with Democrats John Forbes and Kenan Judge joining Republicans to support it. Forbes is a small business owner, and Judge was a senior executive at the Hy-Vee grocery chain.

ALIVE AFTER FUNNEL: REDUCED ELIGIBILITY FOR UNEMPLOYMENT BENEFITS AFTER “MISCONDUCT”

Most bills not dealing with taxes or appropriations needed to clear either the Iowa House or Senate and at least one committee in the other chamber in order to stay alive after the second “funnel” on April 5.

Senate File 561 lays out a long list of actions that could be defined as “misconduct” by an employee. Someone fired for any of those actions, or other types of misconduct not specifically named, would not be eligible for unemployment benefits.

The initial draft included “Dishonesty with the employer by the individual” as an example of misconduct. During Senate floor debate on March 20, Commerce Committee chair Chapman offered an amendment to clarify that such dishonesty would need to be “in relation to the individual’s employment.”

Speaking in favor of that amendment, Democratic State Senator Tony Bisignano drew laughter by saying of Chapman, “He’s taken a very horrible bill and made it just bad, and I commend him for that.”

A few minutes later, Bisignano argued, “When you disqualify individuals for unemployment, it should be [for] some very serious things.” Iowa has decades of case law on unemployment claims, and judges resolve disputed claims by looking at similar cases. Now Chapman has “created a new definition of misconduct,” which will “start a whole new process of case law” as people challenge items on the list or their interpretation. As an human resources director and as a union president, Bisignano has found that “when you start making lists, you make more problems for yourself,” as opposed to using fact-finding.

Democratic Senator Todd Taylor alluded to a similar bill introduced in the Senate Labor Committee, which would have spelled out 20 types of employee misconduct. He echoed Bisignano, saying a long list would lead to more litigation and challenges. “Right now, we have an understanding of and a concept of misconduct. It’s actually in the code already, so this whole entire bill is unnecessary.” Current law states unemployment compensation is for people “persons unemployed through no fault of their own.”

The last Democrat to speak against this bill, Senator Bill Dotzler, said it addresses “another manufactured problem in Iowa.” We have one of the country’s strongest unemployment insurance trust funds, and our system has always been fair to employees and employers. This bill would tip the scale toward businesses.

Surprisingly, the only entity registered in favor of Senate File 561 is the National Federation of Independent Business. Other powerful groups that typically lobby for corporate interests–Americans For Prosperity and the Iowa Association of Business and Industry–were registered “undecided.” Numerous labor organizations oppose the bill, as do the two leading groups representing attorneys (Iowa State Bar Association and the Iowa Association for Justice).

In his closing remarks, Chapman claimed that a lobbyist who was fired after retaliating against someone who reported sexual harassment was awarded unemployment benefits under the current system. “That’s wrong. We should be able to agree that that is wrong.” The bill passed along party lines, 32 votes to 17.

The House Commerce Committee approved the bill on April 3, making it eligible for debate in the lower chamber at any time.

ALIVE AFTER FUNNEL: REDUCED UNEMPLOYMENT BENEFITS FOLLOWING BUSINESS CLOSURES

House File 531 would limit unemployment benefits to 26 weeks after a business closes. That’s the same amount of time workers laid off for other reasons can collect. Current law allows Iowans to collect up to 39 weeks of unemployment after a closure, presumably because such events can produce a large number of job losses in a community at the same time.

Nonpartisan analysis indicates that if this bill were enacted, Unemployment Insurance Trust Fund payments to Iowans would be roughly $5.3 million less each year than under current law.

As Bleeding Heartland discussed here, the original version of this bill was much worse. It would have reduced payments to unemployed workers with more than two children and delayed all unemployment payments by one week, representing a permanent loss of income for most jobless Iowans. House floor manager Gary Worthan warned that his caucus may return to the one-week waiting period idea next year if certain employers and labor unions don’t change how they currently handle apprenticeships.

House members approved the bill along party lines on March 21, and the Senate Labor and Business Relations Committee did the same before the second funnel. Leaders put it on the unfinished business calendar on April 11. Sometimes that means a bill is unlikely to be taken up on the floor, but leaders could call it up for a Senate vote before the end of the session.

DEAD FOR 2019: SEVERAL BILLS TARGETING IOWANS ON PUBLIC ASSISTANCE

Senate Labor Committee chair Jason Schultz introduced at least five bills this year affecting people on public assistance programs. Three of them made it through the full Senate:

  • Senate File 538 would establish new work requirements for Iowans on Medicaid or SNAP food assistance. Nonpartisan analysis indicated this proposal would cost the state nearly $17 million in the first two years alone. Experience from other states suggested that the policy could cause eligible people to be kicked off the Medicaid rolls. Republican state senators voted for the bill anyway.
  • Under Senate File 305, Iowans who are behind on child support payments would have to work with the Department of Human Services child support recovery unit in order to remain eligible for SNAP benefits. The Senate passed this bill by 46 votes to 3.
  • Senate File 484 stated that people possessing three or more food assistance cards they are not authorized to have are guilty of a “fraudulent practice” and would allow law enforcement to report suspected fraud. It passed unanimously. Schultz’s initial draft would have required SNAP cards to be photo ID, but that was a non-starter because of federal rules.
  • Republican State Representative Shannon Lundgren told the Des Moines Register in late March that she would not advance the bills from the House Human Resources Committee, which she chairs.

    Lundgren, a Peosta Republican, said she came to her decision, in part, after a recent presentation at the Capitol from state fraud investigators. The officials provided data that shows few instances of public assistance fraud in Iowa.

    Lundgren said she takes fraud cases seriously, but she wants to better understand the data before enacting new policy. She also wants to make sure that state agencies are involved in drafting future legislation.

    “Just because the Senate sent us a bill that says, ‘This is what we’re trying to fix,’ if that’s not the problem the department sees that needs to be fixed, what are we doing? We’re adding language into a code … that doesn’t solve any problems for people,” she said.

    Lundgren spoke to the Register the same day a federal court struck down Medicaid work requirements in Arkansas and Kentucky. Schultz’s proposal was modeled on ideas from those states.

    Despite the demise of Schultz’s bills, the 2019 legislative session has harmed too many vulnerable Iowans. The assault on workers’ rights and workplace protections won’t stop until Democrats regain control of at least one chamber.

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