The Idaho State Legislature's 2025 session is underway, and the National Federation of Independent Business (NFIB) is closely monitoring proposals that could increase business costs or facilitate lawsuits against small business owners.
A lawsuit poses significant challenges for small businesses. According to the law firm Novian & Novian, "On average, it costs employers around $75,000 to work with an employment lawyer to settle a claim before it reaches trial. However, if the case progresses to court, the expenses can skyrocket, with pre-trial defense costs easily exceeding $125,000."
NFIB Idaho is particularly vigilant about legislative bills containing the phrase "Private Right of Action." This provision allows employees to sue employers directly rather than through state agencies. Depending on how legislation is drafted, it may also permit third parties to sue on behalf of employees.
California's experience with its Private Attorneys General Act (PAGA), enacted 21 years ago, serves as a warning. The act intended to expedite employee grievances but instead became lucrative for lawyers while offering little benefit to workers. Last year, efforts were made in California to amend PAGA due to its unintended consequences.
Idaho aims to avoid similar issues. Frivolous lawsuits can severely impact small businesses unable to afford extensive legal battles.
In NFIB's latest Small Business Problems & Priorities report ranking concerns for Main Street enterprises, "The Cost and Frequency of Lawsuits/Threatened Lawsuit" ranked at No. 72, down from No. 69 in 2020. This decrease reflects NFIB members' active engagement in addressing state and federal issues.
NFIB emphasizes prevention as crucial for avoiding legal disputes. Their Small Business Legal Center offers resources on compliance and court avoidance strategies. Topics covered include employee classification guidance, ADA website accessibility advice, labor poster obligations, and tips for finding reputable attorneys.
Additional resources cover drug testing policies, worker protection from heat exposure, maternity leave guidelines, and a model employee handbook for small businesses.
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