Last week, the Ninth Circuit Court of Appeals ruled that Seattle’s $15 minimum wage law is not discriminatory. Five local franchisees, along with the International Franchise Association (IFA), sought an injunction against the $15 minimum wage law that classifies franchise operations—no matter the size—as “big” businesses. The categorization places smaller franchises at a financial disadvantage against other small businesses by raising their employee costs and putting them on a “faster track toward paying workers $15 an hour.”
Lawyers for local small business franchise owners and the IFA argued that the $15 minimum wage law discriminates against certain small businesses simply due to franchise affiliations. They pointed out that most local franchise businesses have a modest number of employees. Yet, the minimum wage law places them in the same category as businesses with more than 500 employees due to clear discrimination at the hands of the law’s authors in order to meet the political objectives of the labor leaders who provide council members with campaign cash.
The presiding judge stated, “While the record contains some evidence that City officials and advocates questioned the merits of the franchise business model, the district court did not clearly err in determining that the City Council was not motivated by an intent to discriminate against out-of-state firms or interstate commerce. The text shows the City had a legitimate, non-discriminatory purpose.”
It’s unclear how the judge drew that conclusion, given the evidence. Sworn statements and emails reveal that the minimum wage law’s writers wrote the law with the intent “to break the franchise model” and “enable labor unions to organize employees of such businesses.”
Notably, the Ninth Circuit is considered the most liberal federal court in the nation. An IFA official hinted at appealing the decision to the Supreme Court stating, “The absence of controlling Supreme Court precedent, and the conflict among the decisions of the federal circuit courts, suggests that Supreme Court review of the Ninth Circuit’s decision may be appropriate.”