When I first met my wife, she had just started law school, and I was still in the Navy. I planned on going to law school when I got out, so it was fun to have a bit of a preview. Somehow, in spite of her best efforts, watching her go through didn’t dissuade me from my own legal career.
But I remember her saying in her first year that her favorite class was Contracts. I didn’t get it – my interest was in criminal law, and the idea that learning how to draft a contract could be philosophically interesting made absolutely no sense to me.
Boy was I wrong.
Contracts wound up being one of my favorite classes, too. I had a great professor, which helped. But the ability to get together with another private citizen and craft your own rules to your own relationship – and then have courts available to you to enforce those private rules – is a fascinating concept. We tend not to think of the freedom to contract as a civil right, but it absolutely is, on par with criminal due process, free speech, and race-neutral equal protection under the law. Without robust, universally understood, and enforceable rules regarding contracts, we could never trust our interactions with anyone else, and none of us could live up to our economic potentials. It’s what Jefferson meant by the phrase, “pursuit of happyness” as an unalienable human right. Contracts are specifically protected from state interference in the Constitution (although not as protected as they should be, because of some shameful Supreme Court rulings upholding failed and misguided efforts to stave off the Great Depression).
Think about it – why would you work if you couldn’t count on getting paid? If people could skip out on work after getting paid up front, who would do the paying? Who would build apartment buildings if you couldn’t count on collecting rent? Who would build cellular phone infrastructure if users couldn’t be compelled to pay for the service plan they agreed to? You don’t personally sign a contract every day, but you benefit from a contract you or someone else signed hundreds of times every day.
It is therefore a very, very dangerous road for governments to go down when they suddenly wave a wand and announce that certain contracts won’t or can’t be enforced. The economic devastation that it can cause isn’t only – or even primarily – about the lost income from whatever individual transaction that was interfered with. The real damage comes in the loss of trust that future contracts can be relied upon, and deeper loss of trust in the government itself.
We’re seeing that writ large now. The COVID-19 shutdowns were and still are a massive government disruption of contracts. People had employment contracts, but the government mandates made them impossible to fulfill. Construction wasn’t officially stopped, but if you lost your business, you aren’t building a place for customers to come. Weddings and thousands of other events were canceled, and so was the income the photographers, caterers, DJs, tux rental places, party planners, and venues were counting on, so they in turn could pay other people for services they needed or wanted.
One of the most visible examples of this in Nevada is our current moratorium on evictions. I’m sympathetic to the intent of the policy, but if there’s a better example of road-to-Hell-paving good intentions, I don’t know what it is. The economic ripples of that misguided, extra-legal policy will be felt for years. Why enter leases at all if the government can abrogate them at will? Why build more commercial space? Why build more multi-family dwellings or other residential units designed for renters (which are desperately needed in northern Nevada)? And if you do, better charge the highest rents possible, now, because who knows when some politician is going to cut off your income stream.
Part of the problem is the way this was all done. Governments have historically had the ability to interfere with contracts for public purposes, mostly in the seizure and condemnation of private property for public use via eminent domain. But there’s a process, both in the Constitution and in various statutes, that is supposed to protect property owners from arbitrary and capricious seizures. And what’s more, the government is then obligated to reimburse you for your losses.
Even if you believe the COVID lockdowns were necessary (and in retrospect, the data suggests they were terrible and counter-productive overkill), they still constituted a seizure for which the property owners ought to be compensated. It would certainly restore faith that the government will treat people fairly, and would incentivize future governments to not be quite so knee-jerk with their economy-destroying actions in the future.
It’s almost as if “emergency” orders entered weeks and months after the initial crisis became apparent without any input from lawmakers is not only legally dubious, but is a really terrible way to run a state.
You might think, then, that I would be sympathetic to AFSCME, the state government employee’s union that is now suing the governor because he waved that same “emergency powers” wand he used to unemploy half a million Nevadans to (gasp) make them take a furlough day once a month.
(I don’t mean to be unfair to Gov. Sisolak – because we didn’t know then what we know now, his initial shutdown orders were a reasonable reaction to the limited information available at the time, and matched what the rest of the country (and world) was doing. His handling after – most especially his refusal to call the Legislature into session, and his poor communication – is far less defensible, but even then I have no thought that his actions have ever been malicious, even if they were poorly considered.)
But public employee union contracts are unique in that they aren’t actually contracting with the affected party, and so, frankly, they have a real legitimacy problem. Typically, an employee contracts with an employer, whereby money is exchanged for services. Both sides have input in that transaction, and presumably both sides feel they benefit from the agreement. But in the case of public employees represented by a union, their true employers – the people – are designedly cut off from either the hiring/firing decisions, but also from decisions about pay, benefits, etc.
As a result, public employees have become totally separate from and unaccountable to the people whom they are supposed to serve. Nothing illustrates that better than the totally oblivious and entitled temper tantrum now being thrown by AFSCME.
If AFSCME cared about process and fairness in their own contracts, the time to speak up was months ago. It’s the same thing as with any civil liberty – if you don’t defend free speech for people you don’t care about or even actively dislike, don’t count on that freedom still existing when you yourself want to use it.
(This, by the way, is a lesson my friends on the left desperately need to re-learn about all sorts of civil rights, in this brave new world of cancel culture, redefining “racism” once a week and naked double standards surrounding presumptions of innocence whenever it suits a political agenda.)
And if AFSCME cared about the public it purports to serve, they’d take a look around and understand how lucky they are, how reasonable the governor’s proposals regarding them are, and the differences in sacrifices they’re being asked to make versus their privately employed counterparts. At the very least, they could pay some lip service to the idea that in order to meet their demands, taxes would have to be raised on people who either don’t have jobs or who took massive economic hits over the last few months. Is the smallest expression of gratitude that they aren’t on the interminable DETR wait lists too much to ask?
And of all the contracts abrogated by executive order these past few months, theirs are the most legally malleable in tough economic times, as the law expressly allows the state to ignore them if necessary in order to balance the state budget.
Once again, there is no better advocate for eliminating public employee unions than public employee unions themselves. All government workers, from police to electricians, should be at-will employees, and ultimately accountable to someone we can vote for or against. Otherwise we cannot be said to have a government of, for, or by the people in actual practice.
AFSCME’s political muscle is a big part of the reason Gov. Sisolak is in office today, and their short-sighted protest is a naked demand for their quid pro quo. But bowing to their demands would only widen the gap between ordinary Nevadans and their government.
The many missteps during this crisis on every level – from the feds on down to the city level – have badly eroded already tenuous trust between citizens and their governments. From the conflicting guidance on masks to the failure to quell riots (or even seeming tacit approval of them), it’s no wonder government officials are having such a hard time convincing their citizens to follow their ever-shifting suggestions (which, by the way, still lack any well-defined end-game or clear, coherent, identified purpose).
Every day Nevadans know that one man can simply issue a decree and destroy years of planning and investment in their business is a day that trust falls further. Every day government employees are treated in a radically different way from their private sector counterparts, it sinks even lower.
It is good that our Legislature is finally going to go into session. Their mission is to get Nevada on track to recovery. They must understand that they cannot complete that task without first restoring faith in and among our state’s job creators, businesses, and entrepreneurs that the fruits of their labors will be respected and protected in the months and years to come.
Orrin Johnson has been writing and commenting on Nevada and national politics since 2007. He started with an independent blog, First Principles, and was a regular columnist for the Reno Gazette-Journal from 2015-2016. By day, he is a criminal defense attorney in Reno. Follow him on Twitter @orrinjohnson, or contact him at [email protected].