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Judge dismisses much of cities’ challenge to fringe benefits law

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A judge has thrown out part of the challenge to a new state law that bars cities and towns from telling private employers what fringe benefits and paid time off they have to provide for workers.

In a ruling released Wednesday, Maricopa County Superior Court Judge Robert Oberbillig said members of city councils from Tucson, Flagstaff and Tempe have no legal standing to challenge the validity of the law.

The judge said the fact that they are pushing to have their communities enact such restrictions is not enough. Only once a city enacts an ordinance that runs afoul of state law can they sue to have the statute overturned.

Oberbillig also said a union whose members might be aided if cities enact fringe benefit requirements could not sue.

But the judge’s ruling does not disturb a claim by legislative Democrats, who also sued, that their Republican colleagues acted illegally in restricting what local cities can do.

Specifically, they contend that a 2006 initiative specifically gives cities and towns the right to enact fringe benefit requirements. And the Arizona Constitution limits the ability of lawmakers to tinker with what voters have approved.

That issue is likely to get resolved this coming year.

The court fight is over efforts by the business community to limit the power of cities to tell them how they need to treat their employees.

Last year the legislature voted to preclude local governments from enacting their own minimum wage requirements higher than what state law mandates. But Attorney General Mark Brnovich, in a formal legal opinion, concluded that ran afoul of that 2006 initiative which adopted the state’s first-ever minimum wage, an initiative that specifically allows local governments to impose even higher requirements.

In fact, that’s exactly what voters in Flagstaff did earlier this month, approving a plan to take that city’s minimum wage to $15 an hour by 2021.

Brnovich pointed out the Arizona Constitution prohibits lawmakers from tinkering with voter-approved law unless it “furthers the purpose” of the original act, something the 2015 law clearly did not due.

So this year GOP lawmakers came back with an alternative. HB 2579 does not disturb local authority to approve higher minimum wages, But it redefines “wages” — the thing that Brnovich said cannot be preempted — to include only the monetary compensation.

Everything else was redefined as “nonwage compensation.” More to the point, the law declares such “nonwage” compensation to be of “statewide concern” and “not subject to further regulation by a city, town or other political subdivision of the state.”

Attorney Jim Barton, representing the United Food and Commercial Workers Local 99 and other challengers, contends HB 2579 is no more legal than the proposal Brnovich found wanting last year.

He points out the 2006 voter-approved law law specifically allows not only higher minimum wages but also says that a local government “may by ordinance regulate minimum wages and benefits within its geographic boundaries.”

That same language remains in the updated version just approved earlier this month that will hike the state’s minimum wage to $12 an hour by 2020. The new version also has something not in the original law: a requirement for employers to provide at least three paid days off each year.

All that, Barton contends, makes HB 2579 illegal.

But Barton is arguing there’s something else: The law was illegally enacted. And that is something that the Democrat lawmakers who are plaintiffs in the lawsuit — and who voted against HB 2579 — do have legal standing to argue.

Barton said the changes in that measure do not “further the purpose” of the underlying law and therefore are constitutionally beyond the reach of lawmakers.

And even if an argument could be made that the new law does further the purpose, Barton points out the Arizona Constitution still requires such changes be approved by a three-fourths vote of both the House and Senate, something it did not get. The actual House vote was 34-26; the Senate tally was 18-11.

During legislative debate on HB 2579, Republican lawmakers who backed the measure defended their votes.

“This is a bill that is entirely consisted with the Republican philosophy of limited government,” argued  Sen. John Kavanagh, R-Fountain Hills. And Sen. Syliva Allen, R-Snowflake, said it “is not the role of government to tell businesses what they should be paying their employees,” a sentiment she said extended to benefits.

But Rep. Stefanie Mach, D-Tucson, said she sees no reason to override what cities decide is in the best interests of their residents.

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