Trade Association Files Suit Against Seattle's $15 Minimum Wage
A lawsuit filed today challenges Seattle's new $15 minimum wage, set to go into effect over the next several years.
The International Franchise Association (IFA), a DC-based trade association representing corporations like McDonald's, Taco Bell, Dunkin' Donuts, and Dairy Queen, filed the lawsuit alongside five franchise owners who operate their businesses in Seattle. The suit, which names the City of Seattle and the Department of Finance and Administrative Services as defendants, claims the city's new minimum wage law unfairly targets franchises [PDF] by categorizing them as "large businesses."
Seattle's City Council approved an ordinance on June 2 that will gradually raise the city's minimum wage to $15 an hour; Mayor Ed Murray signed the ordinance into law the next day. The law gives large businesses, defined as any company with more than 500 employees, over three years to implement the changes. Smaller businesses are given an extra four years to phase in the increase. Because franchises are part of national company networks employing, typically, over 500 people, local franchises of larger corporations must adhere to the three-year schedule.
The IFA lawsuit seeks an injunction to prevent the law from going into effect, claiming it violates both the Equal Protection Clause and Commerce Clause of the US Constitution.
Seattle Mayor Murray explained in a press conference that franchisees should be treated differently from small, independent local businesses because franchisees receive advertising, marketing, training, and brand identity from their parent companies. He added that the city had done thorough research on compliance with various laws, and felt confident against any challenges, saying, "I think we're on pretty solid ground here."
The IFA estimates there are 600 franchises in Seattle employing 19,000 workers.
Media Resources: The Stranger Slog 6/11/14; The Seattle Times 6/11/14; United States District Court Western District of Washington at Seattle Complaint 6/11/14