Judge won't block part of Seattle's minimum wage law

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Posted: Mar 18, 2015 1:42 AM
Judge won't block part of Seattle's minimum wage law

SEATTLE (AP) — A federal judge on Tuesday cleared the way for Seattle's new minimum wage law to take effect as planned next month, rejecting claims by franchises of big national chains that it discriminates against them.

In his 43-page decision Tuesday night, U.S. District Judge Richard A. Jones rejected all of the arguments brought forth by the International Franchise Association, which represents national chains ranging from fast food joints to hotels.

"Although plaintiffs assert that they will suffer competitive injury, loss of customers, loss of goodwill, and the risk of going out of business, the court finds that these allegations are conclusory and unsupported by the facts in the record," he wrote.

Lawyers for the franchise association, including Paul Clement, the former U.S. solicitor general, insisted that they were not challenging the minimum wage itself. Instead, they were challenging how quickly their clients must adopt it.

The law, which will eventually raise the city's minimum wage to $15 an hour, is phased in more quickly for big companies than small ones. Among those determined to be big companies under the law are franchises that are connected to networks that have a total of more than 500 workers.

In arguments before the judge last week, Clement said that was unfair. The franchises are essentially small businesses, but by 2017 they'll have to pay their workers a minimum wage $4 an hour higher than their purely local competitors.

The franchises cited various legal grounds, including the argument that the city's law would affect interstate commerce — in violation of the U.S. Constitution, which reserves its regulation to the federal government.

Jones dismissed that notion and ruled that the possible harm to the franchises "does not outweigh the concrete harm" that would be suffered by employees who are entitled to an increase in their wages under the law.

He said there was simply "no evidence" that the city's ordinance would have any effect at all on interstate commerce, and that its adoption fell well within the purview of the City Council and the mayor. The city argued that the advantages franchises receive from their national organizations — including marketing, advertising and training — provided legitimate reason to require them to adopt the $15 wage more quickly.

"The Ordinance is, at least putatively, designed to assist low wage workers, to decrease the gender wage gap, and to ensure that workers can better support and care for their families and fully participate in Seattle's civic, cultural and economic life — objectives that are well within the scope of legitimate municipal policymaking," the judge wrote.

On April 1, the large businesses and national chains must raise their pay to at least $11 an hour. Smaller ones must pay at least $10 an hour. Seattle's current minimum wage is $9.47, the same as the Washington state minimum wage.

The franchises sought a preliminary injunction that would block the relevant part of the law from taking effect, pending a ruling from Jones expected later this year on the full merits of the case.

"This is a great day for Seattle's fast food franchise workers," Seattle Mayor Ed Murray said in a statement Tuesday night. "This ruling ensures that on April 1st, the minimum wage will go up for everyone in our city.

"We must remember that the ongoing movement for wage equality in our nation was led by fast food workers from large franchise restaurants," Murray said. "Rather than investing in lawyers to prevent workers from earning higher wages, it is time for these large businesses to begin investing in a higher minimum wage for their employees."

Ashley Bach, a spokesman for the International Franchise Association, said the organization was reviewing the ruling and did not have any immediate comment.

Seattle's law gives businesses with more than 500 employees nationally three years to phase in the increase — four if they provide health insurance. Smaller employers get seven years.

"I haven't read a single page of a law book, but I know what's right and what's wrong. This is the right ruling," said Malcolm Cooper-Suggs, a leader with the group Working Washington. Cooper-Suggs works at a McDonald's in downtown Seattle.