Last week, a fast food industry group challenged Seattle’s rising minimum wage in court on the grounds that it was unconstitutional and discriminatory. This attempt to halt rising wages, however, was stopped in its tracks on Tuesday when a federal judge rejected these claims and gave the $15/hour minimum wage the green light.
In June 2014, the Seattle City Council voted to raise the city’s minimum wage to $15/hour. According to the law, businesses with more than 500 employees nationwide, such as fast food franchises, are required to increase their minimum wages to $11/hour by April 1 and raise it incrementally to $15/hour over the next three years. Smaller businesses are only required to raise their wages to $10/hour by April 1, and must reach the $15/hour threshold within five years. Cities around the country have since followed Seattle’s example
Shortly after the passage of this law, the International Franchise Association (IFA), a group that represents McDonald’s Corp. and large fast food and hotel chains, filed a lawsuit against the city. Last week, the suit came to a head when the group finally presented its arguments before U.S. District Judge Richard A. Jones, alleging that the new minimum wage law discriminated against fast food franchise owners. It specifically disputed the law’s definition of “big business,” which treats small franchises that are part of national brands the same as their corporate parent company. Because of this legal nuance, franchises would be required to meet a sooner deadline than their independent counterparts.
When the IFA presented its case, it also requested a temporary injunction against the new wage law until the full trial began in October, giving fast food franchises an extra six months before being forced to raise their wages.
The IFA, however, won neither a preliminary injunction nor a legal exemption. In a 43-page decision, Judge Jones rejected all arguments related to the case.
“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.
Seattle Mayor Ed Murray, a chief proponent of the city’s new minimum wage law, released his support of the federal ruling in a statement.
“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.”
While many have remained tight-lipped in the aftermath of the case, IFA President and CEO Steve Caldeira announced in a statement that he would not stop fighting the law. “Those who have set out to destroy the long-accepted, time-tested and proven franchise business model must be stopped,” he stated.