Tom Steward

Tom Steward is the bureau chief of's Minnesota Bureau, a project of the Franklin Center for Government and Public Integrity. He is an investigative reporter focused on waste, fraud and abuse in government and has previously worked for WCCO-TV (CBS) and KSTP-TV (ABC) in the Twin Cities. Follow Tom on Facebook and Twitter.

Supreme Stakes for Minnesota Faith-Based Employers

Posted by: Tom Steward Updated: June 29, 2014 - 6:35 PM

Quick question. Did you know Minnesota has more cases than almost any state riding on the outcome of the Supreme Court's decision in the Hobby Lobby case coming out on Monday?  

That's what I thought. For-profit Minnesota employers have received 8 out of 35 temporary injunctions granted by federal courts to businesses across the country under the Religious Freedom Restoration Act. (See Sibelius v. Hobby Lobby and Sibelius v. Conestoga Wood.)

Here's a slice of what's at stake in the religious liberties case that will make headlines--no matter which way the justices rule--in excerpts from my recent post for Minnesota Bureau.  

                  Under the Affordable Care Act, Doboszenki and Sons, a Loretto ecavation company, must provide health coverage in employee medical plans that contradicts the owners’ religious beliefs — or face thousands of dollars in Internal Revenue Service fines.

Doug Doboszenski maintains the ACA violates his rights under the Religious Freedom Restoration Act through the employer requirement to provide mandated contraceptive, abortion-inducing drugs and elective sterilization coverage.

“As a small business owner and just a regular citizen, you don’t feel you have that much control over this stuff. However, somebody has to do something about this,” Doboszenski said. “I don’t believe in the way the government is going. I don’t believe a company like ours should be forced to pay for things we don’t believe in.”

The suburban Twin Cities company filed a federal lawsuit against the U.S. Department of Health and Human Services, obtaining a temporary injunction against the HHS mandate last November in U.S. District Court.

“I have three things I was worried about in doing this lawsuit. How’s the IRS, and how’s the government, going to retaliate, that was first and foremost,” Doboszenski said. “Second, the last few years haven’t been kind to the construction industry and it took a $10,000 bill for lawyer fees to put this in place. Thirdly, there’s a possibility some employees will be happy and a possibility some will be upset about it.”

“I think of all the states, the most for-profit company cases have been brought in Minnesota,” said Erick Kaardal, an attorney representing seven companies that won temporary federal injunctions. “I attribute that to the vibrant Christian community here. We represent Catholic-owned businesses and also Protestant-owned businesses and they’re very upset that their religious liberties are being violated by the federal government in this way.”

Business owners may object to different parts of the required coverage, but all maintain the mandate violates their free exercise of religion.

“This isn’t about cost. We provide health care for our employees and we love to. We’ve done it forever and we continue to do it,” said Doug Erickson, who provides medical coverage for about 60 employees at two Twin Cities auto dealerships. “It’s really about a small piece of this bill and the fact that we don’t agree with some of the language of abortion-inducing medication or drugs.”

Even after obtaining a federal injunction, however, Erickson ran into another obstacle. Erickson’s attorney with the Liberty Institute, a national legal organization that defends religious liberty rights, said the businessman’s insurance provider expressed concerns about amending the company’s medical policy to reflect the exemption. Despite winning in federal court, Erickson’s company policy must continue to provide the mandated medical coverage he opposes for now.

Other companies are also keeping a close watch as the current Supreme Court term winds to a close. Kaardal said several businesses are standing by to file injunctions from the ACA mandate on the grounds of sincere religious objections, depending on the outcome of the Hobby Lobby case.

Interested observers can follow the final decisions of the Supreme Court's current session live at SCOTUS blog. 

How will Unconstitutional Obama Recess Appointments Affect Minnesota Labor Cases?

Posted by: Tom Steward Updated: June 26, 2014 - 2:23 PM

In a unanimous decision this morning, the U.S. Supreme Court just overturned recess appointments made by President Obama in 2012 to the National Labor Relations Board. The big question now: Will the cases decided by the NLRB during the period in question also be invalidated?

It surfaced right away on the SCOTUS live blog as the decision came down: "In terms of these recess appointments of members of the NLRB, they were invalid. That means that their rulings were invalid. It is unclear what will happen with other NLRB rulings from that period," according to one contributor.

There's a timely opportunity for a member of the Minnesota media to get his 15 seconds on the nightly news by asking President Obama on his Twin Cities trip today.

A year ago I wrote a story on the almost 2 dozen Minnesota labor disputes decided by the NLRB that hang in the balance.  While we wait to hear how their jobs, lives and families will be affected by the unconstitutional action struck down today, you can get a glimpse of the personal impact of this Washington power struggle on real Minnesotans in my previous post--NLRB Keeps Minnesota Workers and Companies on Hold Until SCOTUS Decision. 

Here's some of what I wrote:

         The list of cases from published and unpublished decisions on the NLRB’s website finds pockets of Minnesota companies and employees involved in union issues across the state. Those affected include a Brooklyn Park auto service, a Northfield urgent care center, emergency dispatchers in Dodge County, public employees in Cass County and an Excelsior nursing facility.

The NLRB decisions were among hundreds made after January 9, 2012, by board members who were “recess appointees” selected by Obama but never confirmed by the Senate.  A federal appeals court found the appointees to be invalid earlier this year, potentially nullifying NLRB decisions, depending on the U.S. Supreme Court’s decision on the president’s recess-appointment powers in Noel Canning v. NLRB in its next term.

The impact of that case will reverberate far beyond the cases left hanging before one of Washington’s most politicized institutions.

“These are overwhelming constitutional issues,” said John Raudabaugh, a former NLRB board member and Ave Maria School of Law professor. “The Noel Canning case will undoubtedly be one of the most significant decisions in Supreme Court history. There’s no doubt about it.”

The details of the Minnesota cases on record offer a revealing behind-the-scenes view of how labor relations play out on a daily basis in the public and private sectors. Several filings involve the outcome of elections over whether to establish a collective bargaining unit, while another involves a worker who challenged the union’s failure to inform him of his right to withhold dues for political activity. Another issue involved a quirky attempt by canvass workers to unionize the Sisters’ Camelot, a Minneapolis collective.

For Vision of Elk River and five former employees who were terminated by the suburban school bus company, it’s just the latest twist in a saga that dates back four years in the system, longer in the workplace.  It’s getting old for one 70-year-old former worker who lost her job in 2009.

“Anything that would get a settlement and get this taken care of, I’m for,” said Sharron Lynas. “How can they do that?  Forever and ever they’re going to put everything on hold until we all croak? I don’t know what’s going on. I really don’t.”

The former workers claim they were terminated for supporting a union, an allegation denied by management.  An administrative law judge dismissed the workers’ case, but upon appeal the NLRB reversed that finding and ruled in favor of the former employees in September 2012. Fast forward almost a year and the case is in legal limbo.

Now what? That's what the workers and companies unnecessarily caught up in power politics may be about to find out. Here's a list of the Minnesota cases affected by the ruling.

The Militarization of the Media

Posted by: Tom Steward Updated: June 13, 2014 - 2:13 PM

The “militarization of police” draws a lot of media fire lately, driven by the arrival of more 20-25 ton Mine-Resistant Ambush Protected (MRAP) armored vehicles in Minnesota and other states. It might be just as apt, however, to characterize the surge of coverage as the “militarization of the media.”

After all, the federal government’s 1033 Surplus Equipment Program goes back more than 20 years. In Minnesota, the program’s first armored vehicle arrived in Otter Tail County in 1994. Today, 24 armored trucks, seven MRAPs with 11 more reportedly on the way and seven Humvee utility trucks have been decommissioned by the military for use by Minnesota local law enforcement.

That’s one of the takeaways from the comprehensive list of military equipment procured by local and state law enforcement agencies posted for the first time this week by Watchdog Minnesota Bureau. To obtain military equipment, authorities must demonstrate a direct connection to their enforcement and apprehension mission.

The state list accounts for more than $25 million of surplus weapons, vehicles and other equipment obtained by 325 local police departments, 85 sheriffs’ offices and several state law enforcement agencies. Most likely authorities in your community or county made the cut.

8,600 items from the Law Enforcement Support Office of the Department of Defense have been transferred—2,900 weapons from M-16 rifles to .45 caliber pistols to 10 grenade launchers used for tear gas and smoke grenades.  Plus lots more routine supplies like furniture, first aid kits and generators.

A state official rattles off some of the options in a video posted online. “LEA (local enforcement agency) essentials such as handcuffs, riot shields, holsters, bayonets, sight reflexes, binoculars. Most anything that you can think of to support your law enforcement operation.”

Authorities say the program saves taxpayer money and police lives, but acknowledge increasing public concern over potential constitutional dangers.

“Any equipment this office owns, as long as I am sheriff, will be used only within the constraints of the constitution of this country,” said Sheriff Robin Cole about Pine County’s recently acquired MRAP. “That means when we use our vehicles to do some sort of police action, number one, someone’s life will be in dire jeopardy or we will have a warrant issued by a judge based on probable cause to be using the vehicle in that way.”

One weapon that failed to make the state's military equipment list? No drones.

Victoria’s Not-So-Secret Reverse Referendum

Posted by: Tom Steward Updated: May 22, 2014 - 12:31 PM

Not many taxpayers know about it. “There’s the option of the reverse referendum, if the voters really don’t want it,” said Joel Michael, staff coordinator for the nonpartisan research department at the Minnesota House of Representatives.

Fewer still actually invoke it. “Issues of this nature that commit the residents of the city to long-term debt should be voted on by the residents,” said Larry Gubbe, an engineer who signed a reverse referendum petition pending in Victoria.

When citizens do, local officials can circumvent it by turning to another form of bonding, adding hundreds of thousands of dollars to a project’s cost, while putting the onus on guess who?

“For those that are going to ostracize me, they’re going to ostracize me anyway, so I don’t really care. I’m more than comfortable in saying I think I did the right thing,” said Tom Funk, a health care executive who organized the Victoria referendum drive.

Taxpayers who obtain signatures from 5 percent of voters in the previous general election can force a reverse referendum on spending projects funded with capital improvement bonds. 

In the suburb of Victoria, almost 350 citizens—far more than the 235 needed--recently backed a citywide vote on a proposed $5.6 million new city hall and library, plus a public works building. Yet the August 12 referendum may never happen.

“If anyone wants to sign that petition feel free, but know full well at least my vote is, we’re going to go forward,” said Victoria Mayor Tom O’Connor at the April 28 City Council meeting. “And I’m going to vote to adopt the more expensive financing vehicle because some residents either didn’t understand what they were signing or they were misled or people have another agenda.”

The more expensive financing with lease revenue bonds would cost an estimated $660,000 more.

“In the old days, you had to have a referendum no matter what. Now, we have this out, that now you can do it, provided people don’t ask for a (reverse) referendum,” said Michael, the legislative researcher. “And there’s this third option that if your HRA (Housing and Redevelopment Authority) issues the bonds and leases the facility to the EDA (Economic Development Authority), then you don’t have to have a referendum at all. Of course, the cost is always higher with that option.”

At the same time, seven city residents have filed three civil lawsuits in Carver County Court, alleging violations of the state’s open meetings law by Mayor Tom O’Connor and City Council members James Crowley, Lani Basa and Tom Strigel. The city has posted a file of documents on its website related to the building project, including bids, terms of the land transfer, financing and more.

“It’s a legal matter and, as usual, I can’t really say anything about it other than I think that we’re going to be absolved in the future,” said Mayor O’Connor. “… As is typical in these things, we’re not going to say anything until we get a chance to get through it and to prepare our case and, at the appropriate time, we’ll have something to say.”

Alan Kildow, partner in charge of the Minneapolis office of DLA Piper, a global law firm, represents residents pro bono. Whatever the outcome, the state agency that monitors the Minnesota Opening Meeting Law encourages citizen involvement.

“Sometimes the public isn’t as active because they don’t necessarily understand what the law says or even that we exist to help them get their questions answered,” said Stacie Christensen, administrator of the Information Policy Analysis Division (IPAD). “So I definitely think it’s encouraging to see folks take it to a level where they can actually remedy a situation.”

A heads-up: It could be SRO at the May 27 Victoria City Council meeting.

Minnesota Women Mark National Small Business Week in Federal Appeals Court

Posted by: Tom Steward Updated: May 17, 2014 - 5:04 PM

It may have slipped by you but not the Huffington Post. The headline touts “National Small Business Week 2014:  Women-owned Small Businesses are Making Strides.”

Tell that to the dozen women small business owners who were defending—instead of celebrating--their home-based child care businesses against Gov. Mark Dayton and the American Federation of State, County and Municipal Employees union this week in the Eighth Circuit Court of Appeals.

“We just want to keep running our small businesses the way we see fit,” said Jennifer Parrish, a Rochester provider and plaintiff in Parrish v. Dayton. “We’re the ones that take all the responsibility for starting these businesses from the ground up and the union should not be able to come in and take a cut of our earnings, a cut of our profits, just because some politicians in St. Paul decided they wanted to do their union friends a favor.”

Under a controversial 2013 law passed along party lines, some 12,700 licensed and unlicensed home-based child care providers were designated as state employees subject to potential unionization overnight.

“It creates a limited employment relationship with the State for purposes of possible union representation regarding, in particular, the State subsidy,” said Alan Gilbert, Minnesota’s solicitor general on behalf of Dayton in court documents

Union supporters say providers need a say in how a $211 million annual state taxpayer subsidy for low-income families gets distributed. The providers challenging the law’s constitutionality on First Amendment grounds warn other businesses doing commerce with the State of Minnesota--small and large—will be next.

“If it is held constitutional for Minnesota to impose an exclusive representative on small business owners and family members merely because they serve children enrolled in a public-aid program, then vast swaths of the population could also be collectivized based on their services to public-aid recipients,” said Bill Messenger, a National Right to Work Legal Defense Foundation attorney, in court documents.

“This includes government contractors, those serving Medicaid or Medicare beneficiaries, or anyone else whose services are paid for by a government program.”

The Eighth Circuit Court of Appeals halted the Minnesota child care union drive last September, pending the outcome of a Supreme Court case challenging a home care assistants union in Illinois, Harris v. Quinn.  The child care providers in federal court this week say the results of both cases could determine whether they also start making strides as women small business owners.

(Read more about Eighth Circuit Court of Appeals hearing here.)


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