State and Local Association Issues

State and Local Association Issues

North Carolina

A February Supreme Court decision regarding state antitrust laws in North Carolina may have an impact on associations. In North Carolina State Board of Dental Examiners v. Federal Trade Commission, the Supreme Court found that a regulatory board is exempt from federal antitrust laws regarding “state action” only if the organization is actively supervised by the state. According to a report by Pillsbury, Federal antitrust laws are meant to prohibit anticompetitive restrictions on trade, but there is an exemption for states that act in their sovereign capacity. The Supreme Court found that a state must oversee such a board if a state is to rely on “active market participants” as regulators. This decision is relevant to the association community, as it may impact organizations that are delegated or act pursuant to any governmental authority.

In this case the North Carolina State Board of Dental Examiners issued cease-and-desist letters to non-dentists who were providing teeth whitening services. The Federal Trade Commission (FTC) filed a complaint against the Board in 2010 alleging anticompetitive conduct and unfair competition. The Court of Appeals for the Fourth Circuit sided with the FTC and found that the Board was not sufficiently overseen by the state to make the actions “state actions.” The Supreme Court also found that the Board was not supervised by the state.

Washington, DC

For more than a year, ASAE has worked with a variety of business coalitions to encourage revisions to proposed paid-leave legislation in the District of Columbia. In December 2016, the DC Council approved the measure, enacting one of the most generous paid-leave laws in the nation.

The law will create roughly $250 million in new taxes on businesses in the District to fund two months of paid time off for workers to care for newborns or adopted children. The measure, which applies to both full- and part-time workers, also grants employees six weeks of paid leave to help ailing relatives and two weeks of paid personal sick leave.

Four members of the council voted against the bill. DC Mayor Muriel Bowser has been critical of the bill, pointing out that 64 percent of the benefits from the plan would be paid to Virginia and Maryland residents who commute to jobs in the District. After the vote, Bowser issued a statement indicating she will not add her name to the bill. The measure is expected to become law after it passes through Bowser’s office and the congressional review process.

DC business leaders strongly opposed the bill, warning of a long-term drag on the city’s budget and a possible exodus of businesses from the District. ASAE and a coalition of Washington, DC-based business and university groups proposed an alternative “employer mandate” plan, whereby small and medium-sized organizations would have two years to implement a paid-leave benefit for their employees.

ASAE supported the employer mandate proposal because it would have preserved the existing employer-employee benefits relationship and would have left the DC government out of managing paid-leave benefits. Most DC employers already offer these benefits, but for smaller organizations that don’t, the plan would have created a shared-risk insurance pool through the private insurance market to help offset the cost. The employer mandate was introduced by council members Jack Evans (D-Ward 2) and Mary Cheh (D-Ward 3), but it failed on a 5-8 vote.

The paid-leave benefits required under the new law probably will not be available before 2019 to allow time for the city to prepare and fund the program. City analysts say the cost of technology alone to administer the benefits could be as high as $80 million.