Franchisees’ Challenge To Seattle’s $15/Hour Minimum Wage Falls Short

When Seattle city leadership voted in 2014 to approve a plan to raise minimum wage to $15/hour over the course of several years, franchisees in the city said the rules were unfair and vowed to challenge the higher wages in court. Today that challenge came to a quiet end when the U.S. Supreme Court elected to not hear the matter.

The Seattle wage phase-in process provides different timelines for employers depending on their size. Businesses with more than 500 employees have to meet the $15/hour wage by 2017 (or 2018 if they contribute to employees’ health benefits), while smaller businesses have an additional 3-4 years.

What concerns franchisees is that the city is not considering each franchisee’s employee count, but the employee count of the franchisor, in determining which side of the 500 worker threshold a company falls.

So if a McDonald’s franchisee only operates a single store with a few dozen employees, they face the same timeline as a larger corporate employer with thousands of employees.

The International Franchise Association sued the city in 2014, claiming that this aspect of the wage phase-in was discriminatory, and that each franchisee should be viewed as an individual business.

But the trade group had no success in convincing either a U.S. District Court in Seattle, or the Ninth Circuit Court of Appeals in San Francisco, both of which rejected the franchisees’ argument.

The IFA petitioned the Supreme Court in a last-ditch effort, but this morning the group’s petition was denied without comment by SCOTUS.

“Today’s decision from the Supreme Court is clearly a disappointment as our appeal has always focused solely on the discriminatory treatment of franchisees under Seattle’s wage law and the motivation to discriminate against interstate commerce,” said IFA President & CEO Robert Cresanti in a statement. “Seattle’s ordinance is blatantly discriminatory and affirmatively harms Seattle hard-working franchise small business owners every day since it has gone into effect.”

by Chris Morran via Consumerist