Protect Small Businesses Against Litigation

Tom Scott
CA Executive Director, National Federation of Independent Business

At one point in history, every business was a small business. However, small businesses are being tested in these economic and legislative times more than ever. Just last week President Obama touted the "Courage and Honor" of small businesses. Yesterday, Governor Schwarzenegger and other legislative leaders in California talked about promoting policies that would encourage the growth of small businesses in California during California Small Business Day 2009.

This all sounds great and I am sure the 3.5 million small businesses in California appreciate it. However, in this economy talk is cheap and small business people need answers. In a survey California CALA did with the National Federation of Independent Business in California among small business owners, 95 percent of the businesses surveyed believe current laws favor those who sue. Additionally, 98 percent said they believe new laws are needed to protect businesses against lawsuit abuse.

Little has changed in this state since that survey was done last October. Well one thing has changed, the economy went over the cliff.  Businesses of all shapes and sizes are struggling to survive. But I do not see a lot of reform coming down the tracks. Even as I write this, the legislature in California is going about pushing through new taxes and regulations that hurt businesses and consumers. It is no wonder that the Institute of Legal Reform ranks California 44th in the nation in terms of its legal climate.

It is also no wonder that businesses are moving to states like Nevada, Colorado and Texas, states that are less litigious and more business friendly. And over the next 5-6 weeks it will be interesting to see where legislators line up. Are they with business and creating jobs or are they with the special interests who landed this state in 48th place?

One lawsuit can be the difference between being in business or out of business. Let’s try and make it easier to stay in business and provide people with jobs, not more lawsuits.

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