The Chamber of Litigation – part 2
Examining the U.S. Chamber of Commerce’s involvement in
some of the most notorious civil cases of the last decade.
The Chamber of Litigation – part 1
Despite condemning civil lawsuits, the U.S. Chamber of Commerce is
itself a prodigious litigator.
The Gilded Chamber
Bigger, Richer, and (Still) Undisclosed.
Sacrificing the Pawns
How the U.S. Chamber of Commerce Recruits Small
Business Owners to Lobby Against Their Own Self-Interest.
Latest Blog Posts
- Civil Justice
- Human Rights
- Money in Politics
- Workers' Rights
Do you want to know a dirty little secret about the U.S. Chamber of Commerce? While the Chamber claims to represent the interests of small businesses, the reality is that its primary focus is defending Big Business. Indeed, Chamber President Tom Donohue once stated that small businesses “provide the foot soldiers, and often the political cover, for issues big companies want pursued.”
Case in point: the Department of Labor’s proposed overtime rule, which would make an estimated 4.7 million salaried workers newly eligible for overtime. The Chamber declares in its 2016 agenda that it wants to create jobs and lift incomes. So you might think that the Chamber would be in favor of a rule that does both. You would be mistaken. As is so often the case with Chamber campaigns, the Chamber presents the proposed rule as a mortal threat to small businesses and non-profits.
First, a little bit about the proposed overtime rule. The existing overtime rule guarantees time and half for hours worked over a 40-hour workweek. It applies to hourly workers as well as to all salaried workers earning less than $23,660. For salaried workers earning more than $23,660 per year, the overtime requirement does not apply if their job duties require them to exercise independent judgment and managerial responsibilities. The proposed rule would lift the threshold to $50,440 per year in 2016 and would automatically update it each year according to either price or wage inflation.
The Chamber presents the proposed overtime rule as an “existential” threat to small businesses and non-profits. But the Chamber’s representations about the proposed overtime rule don’t stand up to scrutiny. In reality, the proposed overtime rule would only affect a minority of small businesses. Under the existing and proposed rules, small businesses and non-profits that generate business or sales revenues of less than $500,000 a year are exempt from paying overtime. A survey of small businesses showed that 86 percent of them recorded less than $500,000 a year in sales. Non-profits are even less likely to be impacted because they rarely generate business or sales revenue.
While the vast majority of small businesses and non-profits will not be affected by the proposed overtime rule, a minority will be. And yet even for these employers, the proposed rule will have a positive impact. As Nichelle Mitchem of United Community Ministries notes, “if we are unwittingly working people too hard, the quality of our client services may suffer as well. We welcome the opportunity these proposed regulations provide to make sure that just as we want our clients to find good jobs in our community, that the jobs at UCM themselves are good, fair and sustainable for our staff.” Ms. Mitchem makes a valuable point that all employers might want to consider: overworking people impacts the quality of their work and their productivity.
At the end of the day, the Chamber’s opposition to the proposed overtime rule has nothing to do with protecting small businesses and non-profits and everything to do with protecting the profits of Big Business. As venture capitalist Nick Hanauer points out, during the period from 1950 to 1980, corporate profits averaged 6 percent of GDP. Today, they average double that. Middle class incomes, on the other hand, have stagnated, and the erosion of the guaranteed overtime threshold has played a role in this stagnation. In 1975, the overtime threshold stood at $52,000 in today’s dollars and more than 60 percent of salaried workers were eligible for overtime pay. Today, the $23,660 threshold only covers 8 percent of salaried workers and would put a family of four below the poverty line. During this same time period, real median household income inched up from $50,000 in 1973 to $54,000 in 2014. That works out to an annual average growth rate of less than 0.2 percent or $100 extra each year. This is not the American Dream.
The proposed rule would help exert upward pressure on incomes in two ways. First, the millions of newly covered workers would suddenly be entitled to be paid for any overtime hours worked. And even if their employers decided to limit them to 40 hours, they would still benefit in that they would stop working long hours without pay. In short, they would gain either time or money. Time to spend with their families, go to school, or get a paying second job. Or more take home pay that would provide them with additional financial security.
Second, the proposed rule will help tighten the labor market, thereby providing employees with additional bargaining power and exerting upward pressure on wages. This will happen because it is likely that many employers would limit their employees to 40 hours rather than pay overtime. Employers will then be forced to hire new employees to do the additional work their current employees used to do during their overtime hours.
The post-war years were the glory years for the American economy. If America’s businesses could be so successful back then while operating under an overtime rule that covered the majority of salaried employees, then they can certainly be successful today under a proposed rule that would cover only 40 percent of salaried employees. Of course, as Hanauer suggests, in order to pay their workers the overtime they deserve (or hire additional workers to do all the extra work they were demanding existing workers do without compensation), these same large corporations might have to pay their top management and investors less. At a time in history when income inequality has reached staggering heights, the proposed overtime rule just might be an important part of the solution to creating a more just economy that rewards the many rather than the few. By pretending that the proposed rule would hurt small business, the Chamber claims to be defending the interests of the many; the reality is that it is defending the interests of the few.
Undermining the FSOC: Chamber Seeks to Roll Back Regulations On Massive Nonbank Financial Institutions
The U.S. Chamber of Commerce has strongly opposed centralized oversight of “nonbank” financial companies that precipitated the 2008 financial crisis and has fought to help a major contributor avoid heightened standards, according to a new report from Public Citizen’s U.S. Chamber Watch.
This analysis is the last in a series of three reports on the U.S. Chamber of Commerce’s financial policy agenda issued over the past few weeks by Public Citizen’s U.S. Chamber Watch. This report examines the Chamber’s advocacy regarding the Financial Stability Oversight Council (FSOC), which consists of financial regulators and was created as part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act to identify risks to the financial stability of the United States.
Undermining the CFPB: Chamber Seeks Light Regulation of Credit Cards by Limiting Powers of the Consumer Financial Protection Bureau
As congressional Republicans threaten to shut down the government over ideological policy provisions including an attempt to eviscerate the U.S. Consumer Financial Protection Bureau (CFPB), Public Citizen’s U.S. Chamber Watch released a report documenting the business lobby’s efforts and arguments against the new agency’s benefits to consumers.
The analysis is contained in the second of three reports on the Chamber’s broad attack against Wall Street reform. Titled “Undermining the CFPB,” the report highlights the Chamber’s defense of the onerous credit card terms megabanks promote at the expense of consumers. It also looks at the Chamber’s attempt to stifle dialogue between the CFPB and the U.S. Department of Defense as the agencies work to protect members of the military from predatory lending – a goal especially important for vulnerable service members deployed overseas.
Undermining Dodd-Frank: A Critical Review of the 2015 “Fix. Add. Replace. (FAR)” Agenda of the Center for Capital Market Competitiveness at the U.S. Chamber of Commerce
The U.S. Chamber of Commerce’s sweeping attacks against Wall Street reform are based on policies unsupported by evidence, harmful to small business and consumers, and largely beneficial to Wall Street, according to an analysis by Public Citizen’s U.S. Chamber Watch.
The analysis is contained in the first of three reports on the Chamber’s attempt to undermine policies that benefit Main Street. Titled “Undermining Dodd-Frank,” the report provides an overview of the Chamber’s assault on reforms initiated after the 2008 economic collapse, which was fueled by reckless Wall Street practices.
Public Citizen’s report documents some of the Chamber’s most outrageous positions and shows its tendency to protect the nation’s largest banks. For example, the Chamber criticizes modest safeguards on complicated derivative transactions where 90 percent of the market involves only five large banks. The Chamber also invokes Main Street when attacking consumer safeguards against credit card industry abuses, even though seven banks control 74 percent of this sector.
Lawmakers should not set great store by the U.S. Chamber of Commerce’s April testimony from attorney John Beisner before the U.S. House of Representatives’ Committee on the Judiciary. In his testimony, Beisner advocated legislation to prevent what he labels “overbroad” or “no-injury” class actions. A new Public Citizen report, “The Fiction of the ‘No-Injury’ Class Action,” counters his argument case by case.
Because class-action lawsuits are often the only feasible way to bring small-dollar claims, class actions are powerful tools for combating corporate wrongdoing and are frequently a target for corporate interests seeking to limit consumers’ access to court remedies.
In one of its many theories about why consumers’ should not be able to hold bad actors accountable, the Chamber’s lobbyists are pushing the idea that consumers who were duped by misrepresentations into buying products or overpaying for products have suffered “no injury.”
Public Citizen’s report has the goods on the real letter of the law: Consumers conned into buying a product that is defective or mislabeled have suffered economic injury. For example, consumers duped into purchasing worthless cold remedies have suffered an obvious injury, but Beisner’s testimony for the Chamber called their lawsuit a “no-injury” class action.
Public Citizen’s report looks past the façade of Beisner’s arguments and reviews each of the class-action lawsuits referenced in his testimony to show that the cases involved real injuries suffered by consumers who bought defective products or made purchases because of misrepresentations. These injuries included the need to repair or replace products to avoid serious injury, as well as economic losses suffered when consumers paid for defective products that were not worth the premium prices charged, purchased worthless products that were not what manufacturers represented them to be, or paid extra for products based on misrepresentations about their nature or quality.
The report also explains that securities law, trademark law, and antitrust law accept that consumers can suffer an economic harm if they purchase a product based on false information or an artificially inflated price. The policy goals that underlie those types of laws likewise apply to consumer misrepresentation suits — protecting purchasers and the integrity of the marketplace.
Let’s make sure Congress doesn’t buy what the Chamber’s trying to sell. The laws and rules that allow consumers to band together in a single suit to seek compensation for harm are essential protections that Congress should strengthen, not weaken.
By: Aurora Randolph, Congress Watch legal fellow
Massive troves of United States Chamber of Commerce (U.S. Chamber) money in elections are hardly a new occurrence. The Chamber spent $70 million helping elect Republicans in 2014. But as rogue right-wing Republicans continue to yank on the leash of their establishment conservative leadership, reality seems to be setting in for the Chamber – not just any Republican in office will do. To that end, the Chamber is looking to aggressively shape the Republican narrative by pouring money and resources into elections even earlier, during the primaries. And no punches will be pulled for GOP incumbents.
A look at the changing trend in money from independent expenditures in primaries
Chamber’s Recent Success
Early primary money has been a winning strategy for the Chamber. In 2014, the candidate backed by the U.S. Chamber of Commerce won in 14 out of the 15 races.
In 2013, the U.S. Chamber helped nudge a Republican primary in the establishment’s favor when it contributed around $200,000 to Representative Bradley Byrne’s campaign for the open seat of Jo Bonner in Alabama’s 1st District. Byrne ran against tea-partier Republican Dean Young, a disciple of the Freedom Caucus who had said he wouldn’t support John Boehner as speaker. The race was razor-thin for the duration but the Chamber’s cash (and hail-Mary ad featuring Brett Favre) proved vital in Byrne’s finish.
In the expensive, dramatic Mississippi senate race Chamber-supported Thad Cochran defeated tea-party darling Chris McDaniel in the primary runoff. McDaniel was heavily funded by all the major national tea-party ideological groups, and Cochran by business groups and the Republican establishment. In fact, the Mississippi election was the top primary race by outside spending – at just above $8 million. The Chamber spent $500,000 supporting Cochran on top of the $100,000 they gave to a state-level group, Mississippi Conservatives, which also financially supported Cochran.
While the Chamber has been involved in primaries in the past, a new direction in its campaign spending will mean that incumbents will now be on the hit-list. “Last year, we were very aggressive in primaries and the general, and we intend to be again,” Chamber spokeswoman Blair Holmes said. “It’s not a change in policy as much as it is a recommitment to last cycle’s successful approach.” But Politco reports that the lobbying group is developing a new strategy to challenge those sitting members that have refused to champion its special interests, a “major shift for the business community.” “We’re just going to run it 24 months in a row, cycle after cycle after cycle,” said Thomas Donohue, the Chamber’s president and chief executive officer.
The consequences of the tidal wave of money in primaries
In examining the ever-increasing amount of early political money, Moyers & Company emphasize that in picking their desired candidates and injecting cash, groups with huge resources silence the volume of the rest of our democratic voices. Likening such influence to unconstitutional poll taxes, they highlight the systematic disenfranchisement of poor and working class citizens this creates – especially in “safe” partisan districts – by foreclosing on their ability to meaningfully participate in deciding who represents them.
The discontent with what is known as the “money primary” – the competition before any vote is cast between candidates vying for the favor of moneyed interests to fill their campaign war chests and lend them political legitimacy – is not a fringe issue. In “Let’s Democratize the ‘Money Primary’,” Business Insider describes the process as “a tiny, tiny number of rich people will choose who gets to be the most powerful man or woman.” People need to be able to engage in what is increasingly becoming the key deciding point in electoral politics.
Who is on the ballot matters – pure and simple. Not surprisingly, the views of a majority of Americans differ sharply from those of wealthy Americans. The New York Times reports a 2013 paper from Northwestern and Vanderbilt Universities showed that while two-thirds of the general public said the government should “see to it” that anyone who wants a job can find one, only 19% of the wealthy believed the same. And 40% of wealthy respondents, compared to 78% of the public, believed that government should make the minimum wage “high enough so that no family with a full-time worker falls below the official poverty line.” If the wealthy can act as political gatekeepers to our ballot, elections lose their democratic meaning.
When the U.S. Chamber dumps primary money into elections, local voices are drowned out. The Chamber’s far right political agenda does not align even with some of their local affiliates. When the U.S. Chamber ran attacks against Senator McCaskill, for example, the Greater Kansas City Chamber of Commerce made clear it was not involved with the ad. The U.S. Chamber’s aggressive stance against climate change action has also led local chambers to distance themselves from the national juggernaut.
In a dysfunctional electoral system, the powerful and unique position of the U.S. Chamber to alter not only national legislation and candidates but even dictate the direction of congressional primaries is a trend that we need to be aware of and work to change. The trend of big money and big influence working its way into every crevice of politics underscores why we need campaign finance reform now. And shows why this initiative needs to be driven by a grassroots movement of engaged individuals.