By Ned Resnikoff
A federal judge in Seattle heard arguments Tuesday in a lawsuit challenging the city’s $15 minimum wage on constitutional grounds. The International Franchise Association (IFA) — an industry group representing both small franchisees and powerful franchisors such as the McDonald’s Corp. — filed the lawsuit against the city last summer, arguing that the minimum wage law unfairly discriminates against franchise owners.
At Tuesday’s court hearing, the IFA presented its case for a preliminary injunction on a portion of the law. A full trial regarding will not begin until October.
The Seattle City Council voted to approve the $15 minimum wage in June 2014, and the first phase of the increase is scheduled to begin on April 1. Although the law will require all employers in Seattle to pay their employees a minimum of $15 per hour by Jan. 1, 2021, the wage increase will hit different businesses at different times. Employers with 500 or fewer workers will be required to pay at least $10 per hour starting in April; for businesses that employ more than 500 people nationwide, the minimum wage as of April will be $11.
The IFA’s lawsuit disputes the law’s definition of a large business. The law treats McDonald’s franchisees and similar workplaces as if they were large businesses, due to their franchising agreements with multinational corporations — even though those corporations technically do not own the businesses themselves. The IFA, represented by the high-profile Washington, D.C. law firm Bancroft PLLC, argues that classifying smaller franchises as big businesses violates the commerce clause of the constitution.
“This discriminatory treatment of a business model typified by involvement in interstate commerce, the use of federally-protected trademarks and particular forms of protected speech and association is not just novel, but unconstitutional,” according to the plaintiff’s motion for a preliminary injunction against the law.