Battle over benefits

Attorney Jim Barton speaks during a press conference in 2017.

PHOENIX — Attorney General Mark Brnovich is asking a judge to rule that the word “benefits’’ in a voter-approved measure is not the same as “fringe benefits.’’

And the goal of this judicial war of words is a bid by Brnovich to block local governments from telling private companies what benefits they have to offer their workers.

Assistant Attorney General Rusty Crandell, writing on behalf of Brnovich, is trying to preserve a 2016 measure adopted by Republican legislators to block local governments from telling private companies everything from how much time off they will offer workers to vacation mandates and even how far ahead of time workers need to be told of schedule changes.

Crandell specifically wants Maricopa County Superior Court Judge Robert Oberbillig to throw out a challenge to that law by Democrat legislators who voted against it.

But attorney Jim Barton, representing the challengers, said the 2006 voter-approved initiative setting the state’s first-ever minimum wage specifically authorizes such local laws on fringe benefits. And Barton said that was reinforced just this past November when voters adopted Proposition 206 which raised the wages again and mandated for the first time ever paid sick leave.

Businesses are powerless to block “living wage’’ legislation like what voters adopted in Flagstaff and what is being considered in other communities. That’s because Proposition 202, the 2006 initiative, specifically allows cities to set wages even higher than what the state requires.

But fearful of even broader local mandates, the restaurant industry last year got Rep. J.D. Mesnard, R-Chandler, to craft a legal end-run of sorts around the initiative.

Specifically, Mesnard wrote a law that redefines “wages’’ — the thing that the state cannot preempt because it was approved at the ballot — to include only the salaries being paid to workers.

Everything else was defined as “nonwage compensation,’’ ranging from sick pay, vacation pay and severance benefits to commissions and pension contributions. That also includes things like maternity leave.

In challenging Mesnard’s law last year, Barton points out the Arizona Constitution forbids lawmakers from altering voter-approved laws unless the measure “furthers the purpose’’ of the original law.

In this case, he said, the 2006 initiative specifically says that a local government “may by ordinance regulate minimum wages and benefits within its geographic boundaries.’’ That, he said, makes the law illegal.

And Barton said even if a court were to conclude the Mesnard-crafted law could be interpreted as furthering the purpose of the 2006 initiative, the Arizona Constitution says changes to initiatives require a three-fourths vote of both the House and Senate. Mesnard’s legislation was approved by the House on a 34-26 margin; the Senate tally was 18-11.

It is that margin that gives Democrat lawmakers who opposed the law — and had enough votes to deny the measure that three-fourths margin — the standing to sue.

In his new court filings, Crandell told Oberbillig all that is irrelevant. And the key to all that is the argument that “benefits’’ doesn’t mean what challengers say it means.

Crandell concedes the wording in the 2006 law — language also picked up in last year’s Proposition 206 initiative — does specifically say local governments can “regulate minimum wages and benefits.’’ But Crandell wants the judge to conclude the word “benefits’’ means not “fringe benefits’’ but instead only “the minimum wage protections that Prop. 202 provides.’’

“The term ‘benefits’ is not defined,’’ Crandell wrote. And while he acknowledges a dictionary says it could be considered shorthand for “fringe benefits,’’ there’s also a definition that says “the advantage or privilege something gives.’’

So if “benefits’’ does not necessarily mean “fringe benefits,’’ what does it mean?

Crandell told Oberbillig its up to him to discern what voters intended when they approved Proposition 202. But Crandell insisted it definitely does not mean fringe benefits.

He said the measure was titled the “Raise the Minimum Wage for Working Arizonans Act.’’ And then there was the intent language.

“The declared purpose of Prop. 202 is that ‘all working Arizonans deserve to be paid a minimum wage that is sufficient to give them a fighting chance to provide for their families,’ ‘’ Crandell said. He said the initiative accomplishes that by setting the minimum wage and providing for enforcement rights and penalties.

Anyway, Crandell said, there was nothing in any of the arguments in publicity brochure mailed to voters ahead of the 2006 election, either for or against, that mentioned anything other than wages.

“If the voters of Arizona intended to hand over control of all employee benefits to local governments — enabling local governments to saddle businesses with a patchwork of regulations regarding nonwage benefits that vary from one city to the next — one would expect a clear explanation of such a feature in light of its significant impact on business,’’ Crandell wrote. “Tellingly, nothing in the history of Prop. 202 alerted voters to this sea change in Arizona employment law.’’

Barton, however, wants Oberbillig to rule that it doesn’t take a legal parsing to conclude that “benefits’’ are what they seem to be, even without the word “fringe’’ in front of it.

Some of the issue already has been effectively decided.

Last year’s initiative did more than raise the minimum wage to $10 an hour and $12 by 2020. It also requires employers to provide at least three days of paid leave for everything from sickness to court appearances.

More to the point, it clearly spells out that local governments are free to require paid sick leave greater than what’s in the ballot measure.

But there are still other issues that city councils might want to take up, like how much notice private employers must provide before changing a worker’s schedule. And Proposition 206 does not specifically address things like vacation.

Brnovich already has succeeded in getting part of the challenge to Mesnard’s law thrown out.

The original challenge included not just Democrat lawmakers but also members of city councils from Tucson, Flagstaff and Tempe. They argued the Mesnard legislation interfered with their plans to enact local ordinances on fringe benefits.

Oberbillig said, however, that’s not enough to give them the right to sue. He said only after a city enacts an ordinance that runs afoul of the new law can he rule on whether it is preempted by the state law.

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

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