Supporters of higher minimum wage hail judge's ruling

AP News
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Posted: Mar 18, 2015 12:56 PM
Supporters of higher minimum wage hail judge's ruling

SEATTLE (AP) — Supporters of higher pay for minimum wage workers hailed a federal judge's decision clearing the way for Seattle's new minimum wage law to take effect as planned next month.

U.S. District Judge Richard A. Jones rejected claims by franchises of big national chains that the law discriminates against them.

"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," Jones wrote Tuesday night, dismissing arguments brought forth by the International Franchise Association, which represents national chains ranging from fast food joints to hotels.

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

The president and CEO of the International Franchise Association said the group would continue to fight the parts of Seattle's new wage law that apply to franchises.

"Yesterday's decision is clearly a disappointment but it is not the end of this fight," said Steve Caldeira, the association's president and CEO, in a statement. "The ordinance is clearly discriminatory and would harm hardworking small business owners who happen to be franchisees."

He said the group would continue it legal efforts.

Lawyers for the franchise association, including Paul Clement, the former U.S. solicitor general, have 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.

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.

In arguments before the judge last week, Clement said 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.

The judge 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 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.

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.