The actions this week by two state attorneys general over the constitutionality of President Trump’s overseas business dealings have very little to do with the P&Ls of operators. But here’s why it matters to your business and employees–In the grand scheme of things, their legal maneuvering it is a stinging reminder of the role AGs play and how, in other circumstances critical to our business models and industry, they can have a seriously negative impact.
A few years ago, I attended a conference for attorneys general and a panelist from Washington, D.C. addressed the gathering. In her very best and pretentious, “I am from the nation’s capital and therefore must be very important” demeanor, she essentially called the group a really good “farm team” climbing the political ladder to actual important offices in D.C. There was an audible gasp in the room. I happened to be sitting next to the attorney general from a very big state who muttered to me, “Yeah, a farm team with subpoena power.” I’ll never forget that and neither should our industry.
As we look at the current political landscape, dominated by Republicans at the federal and state level, we should expect Democratic attorneys general to find ways to level the playing field as much as possible – including activism on issues important to the P&Ls of operators. We have witnessed this play out in recent history.
Just last year, eight attorneys general forged an agreement with some major retailers to stop mandatory on-call scheduling. AGs have pressured credit card companies to speed up their adoption of chip and pin technology and famously, New York Attorney General Eric Schneiderman has pursued numerous wage theft cases, one resulting in the jailing of a Papa John’s franchisee.
Retailers need to remember that not only do Democratic AGs hold office in many of the most populous states (i.e. where many companies have a significant footprint), more importantly, they are extremely close to the labor community. California, New York, Illinois, Pennsylvania are notable examples. As the labor agenda struggles in Congress and in statehouses across the country, expect left of center activists to pressure friendly AGs to vigorously enforce wage and benefit laws, investigate any appearance of discrimination, and litigate on behalf of workers.
Retailers need to make sure they do not get a false sense of security because all the political maps they see are predominantly red. Compliance is critical. The office of state attorney general is one of the most powerful elected public offices we have, and when their legal crosshairs are trained on entry-level employers, it will be very clear which elected officials merely have soapboxes and which ones have, as my friend the AG would say, subpoena power.