Organized Labor

High Court Refuses to Hear Case Brought By Restaurant Association

The City of San Francisco prevailed in its effort to provide health care to residents when the United States Supreme Court on June 28 refused to hear a legal challenge filed by the Golden Gate Restaurant Association. The business group had sued the city in November 2006 over a provision of the Health Care Security Ordinance that mandates that all companies with at least 20 workers provide health insurance, pay into health care reimbursement accounts or contribute to the Healthy San Francisco program.

Authored by former SF Supervisor and current Assemblymember Tom Ammiano, Healthy San Francisco was approved unanimously by the Board of Supervisors in July 2006 and in July 2007 began to offer care to the city’s uninsured residents—regardless of pre-existing conditions, immigration status or employment status. About 75 percent of the 60,000 San Franciscans who were previously uninsured now have health coverage at a cost of roughly $120 million a year, funded through a combination of city money, state grants, employer contributions and participants’ fees.

U.S. District Judge Jeffrey White ruled in December 2007 in favor of the GGRA, saying that employers could not be mandated to fund the program. A three-judge panel of the Ninth U.S. Circuit Court of Appeals reviewed White’s decision and allowed the program to continue to expand while under appeal.The San Francisco Central Labor Council, Service Employees International Union (SEIU) Local 1021, SEIU United Healthcare Workers-West, and UNITE-HERE! Local 2 were granted the right to intervene as defendants in the Ninth U.S. Circuit Court of Appeals decision in April 2007.

The UC Berkeley Center for Health, Economic and Family Security filed an amicus brief on behalf of two San Francisco restaurants, Zazie and Medjool, that support the ordinance. They asked the Supreme Court to deny the Golden Gate Restaurant Association’s petition to have the Court take up the case.

Mayor Gavin Newsom said the Supreme Court ruling “is a victory for the 53,000 San Franciscans who have health care today through our groundbreaking universal health care program. The high court’s decision ... ensures we can continue providing health care coverage to thousands who would otherwise go without.”

The San Francisco Chronicle noted that, “With each participant provided a personal physician, their costly emergency room visits at San Francisco General Hospital dropped 27 percent between the first and second year the program was in operation.”

“It’s a great victory for health care,” said Dr. Mitch Katz, the director of health for the San Francisco Department of Public Health “It assures that all uninsured persons in San Francisco have access to health care regardless of income, employment status or immigration status.”

UC Berkeley Labor Center researchers analyzed the impact of the San Francisco Health Care Security Ordinance on employment and prices and found no evidence of a negative effect of the employer requirement on employment in San Francisco. While San Francisco saw its employment rate shrink due to the struggling economy, it actually shrank less than other counties. This held true in retail, food service, restaurants and hotels, the sectors most strongly impacted by the health care ordinance because they traditionally have a lot of low-income workers and aren’t as likely to offer health insurance as higher-paying industries, the report noted. They further found that many restaurants passed on the cost of coverage to consumers. They said that the City’s public option has “passed the market test while not crowding out private options.”

So far, about 1,100 employers have selected Healthy San Francisco as their option for providing health care to their workers.