Some of the most important legal cases protecting your rights – from free speech protections to the limitation on abusive police practices – come from rather unsavory litigants. Think of Larry Flynt and the Illinois Nazis, who along with the ACLU (back when they were a legitimate civil liberties organization instead of just another partisan political advocacy group) ensured that everyone’s First Amendment rights were honored. Neither Ernesto Miranda nor Clarence Gideon nor John Terry were model citizens, but their cases helped make our criminal justice system more just for us all.
And while I am not normally in the habit of cheering on brothels, I was very happy to read this week about their pushback against government bureaucrat attempts to substantially alter their business models.
The dispute comes from the Nevada Department of Employment’s Employee Security Division (ESD) determination that prostitutes working at brothels should be classified as employees rather than as independent contractors. Millions of dollars are at stake for either the brothels or state coffers. But in the long term, every business in the state should fear the ESD’s actions. To make things worse, this is an abrupt change, and counter to previous years of treatment by government regulators.
Many well-meaning folks on the leftward side of our political debates believe that the only reason any worker would be classified as an “independent contractor” is to maliciously screw those workers out of various benefits. Sometimes that’s even true, and I have argued in this space that the relationship between brothel owners and prostitutes is not exactly an equitable one. But the solutions my friends on the left propose often have terrible unintended consequences.
For example, California passed an already infamous bill which reclassified tens of thousands of workers as employees, ostensibly to bring “justice” to so-called gig-workers who don’t get benefits from the organizations they work for. The problem is that employees are far more expensive for those companies, and in many cases, the workers would rather be independent. The options are not simply, “pay people more or less depending on their classification,” but “do I hire someone at all?”
Truckers in California have already successfully (for now) sued the state to prevent the law from applying to them, citing significant hardships industry-wide. Freelance journalists and photographers have not been so lucky in their own lawsuits, doing great harm to the free flow of information (and the laid-off freelancers themselves). In the end, the only winners will be employment law attorneys who will rake in the cash that small businesses could otherwise have spent expanding their companies and hiring more people.
But hand it to California – when they do stupid things, at least they actually pass a law via their elected representatives in the Legislature. The designation of prostitutes as employees on whom the brothels must pay unemployment insurance is new (and contrary to previous decades of treatment by those same bureaucrats). The ESD is accountable to no voter, and yet they have the power – through their decision-making – to upend or even destroy legal businesses which have been operating in a certain manner for years.
The current litigation between the brothels and the government involves the Love Ranch demanding that ESD audits of all other brothels be turned over as the public records they are, with the government trying to keep that information secret because of the personal information it contains. But the brothel’s request is a fair one – we are all guaranteed equal protection (which also means equal application) under the law. If a government agency is allowed to keep their treatment of various citizens secret, how can we know or trust that this fundamental guarantee is being honored?
There is a reason criminal trials and other proceedings must be open to the public. The same logic should be applied any time the government is seeking to take money from a citizen by force of law. The Love Ranch is right to force the issue.
Ultimately, the best way to protect employees of any kind is to set them free. The problem with the relationship between brothels and their prostitutes isn’t the unemployment tax structure, it’s that other heavy-handed government regulation has given brothels in every county functional monopolies, which means their workers don’t have anywhere else to go if they don’t like their working conditions.
This situation isn’t limited to brothels. How much better off would our talented teachers be if they had more school options to choose from when they don’t like how their current principal or superintendent treats them? How much better off are we that Uber and Lyft have broken the taxi cartels (a situation California’s law is shamefully trying to reverse)? How much better off would we be if the cannabis industry wasn’t so aggressively regulated that cheating and corruption would be inevitable?
And most importantly, if the ESD can simply announce they will radically alter the long-standing relationship between workers and businesses, when and how will other businesses be affected? What other bureaucratic agencies will empower themselves to make substantial policy changes out of the blue? Plenty of damage can be done by well-meaning bureaucrats with too much power. What happens when one of those bureaucrats has an axe to grind, or maybe isn’t so well-meaning?
Whatever my reservations about legal prostitution, I am grateful for the sake of all private businesses in Nevada that the Love Ranch is pushing back hard against the government. If they are successful – and they should be – it will be a victory for economic freedom everywhere. In the meantime, let’s hope our lawmakers step in to rein in the bureaucrats, and allow our state economy to reach its full potential.
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].