As advocates for small business, the San Jose Chamber of Commerce continues to work on the safe reopening of our economy so we can get our residents, neighbors and friends back to work. San Jose businesses have been hit hard by the economic slowdown related to the ongoing COVID-19 pandemic and those challenges continue, but the threats to small business will not stop just because COVID is behind us—and we need to be prepared.
Before COVID-19 became a household name, frivolous lawsuits were already a huge threat to our local economy. Regionally, we have seen some small businesses close their doors because of lawsuits whose goals were more about attorney profits than they were about public safety. Now, our community needs protection against future lawsuits aimed at shaking down family-owned businesses.
In 2017, our neighboring state of Arizona passed SB 1406, legislation which provided business owners a 30-day right to remedy before a lawsuit could be filed. This legislation is a win-win for Arizona residents and the economy; the issues around safety and access are addressed, without the undue burden of lawsuit settlement costs placed on employers. In this competitive market for jobs, California should follow suit.
The first week of October is Lawsuit Abuse Awareness week, and now is a great time to highlight this important issue and to call on the California Legislature and Gov. Gavin Newsom to support small businesses and protect them from these abusive lawsuits.
Business owners deserve certainty of liability protection. They are dedicated to the welfare and safety of their employees and customers, but they also want certainty that a lawsuit won’t drive them into bankruptcy and out of business.
There are nearly four million small businesses in California, and together they employ more than seven million workers. In San Jose, 98% of businesses have less than 35 employees. These are the preponderance of victims of frivolous lawsuits, and they are the voices we would expect our elected leaders to listen to when making policy for our city, region and state.
Unnecessary litigation caused by the American Disabilities Act, Prop. 65 and the Private Attorneys General Act will have lasting impacts on small businesses and jobs in San Jose. Unless our leaders take a stand for those that employ so many, the path to financial security that entrepreneurship provides will be lost for many more at the hands of abusive lawsuits.
Derrick Seaver is the president and CEO of the San Jose Chamber of Commerce.