Supreme Court Kills Minimum Wage Lawsuit Against Seattle

Connor D. Wolf | Reporter

The U.S. Supreme Court declined to hear a lawsuit against a law Monday that will gradually raise the Seattle minimum wage to $15 an hour.

The International Franchise Association (IFA) alleged the law is discriminatory when it filed the lawsuit in June 2014. The law was written to give small businesses more time to adjust but excluded individually owned franchisees. The highest court decided not to hear the lawsuit, meaning the lower-court’s ruling stands, reports The Wall Street Journal.

“Seattle’s ordinance is blatantly discriminatory and affirmatively harms Seattle hard-working franchise small business owners every day since it has gone into effect,” IFA President Robert Cresanti said in a statement to The Daily Caller News Foundation. “We are simply attempting to level the playing field for the 600 local franchise business owners employing 19,000 people in Seattle.”

IFA appealed the decision Jan. 25 after losing in the Ninth Circuit Court of Appeals in September. It argues the new $15 minimum wage enacted in June 2014 is discriminatory because it treats individually-owned franchisees like the large corporations with which they contract.

The franchise model allow smaller companies to sell the products and use the brand name of a larger corporation. IFA filed the lawsuit with five locally owned franchisees when the measure passed. Seattle lawmakers wrote the measure to phase in over a few years to mitigate economic stress — small businesses were given more time to adjust, but the provision excluded franchisees.

Some lawmakers have claimed small franchisees can handle a rise in the minimum wage just as well as the corporations with which they contract. State Attorney General Robert Ferguson has noted that franchisees enjoy a unique economic advantage being connected to a larger corporation, as corporations often offer advertising, supply chain management and menus.

The Employment Policies Institute (EPI) noted in a January report that small independently owned franchisees are just as vulnerable to minimum wage increases as non-franchised small businesses. Businesses are often forced to increase costs or scale back their workforce to adjust to the higher cost of labor that comes with a higher minimum wage.

Additionally low-skilled workers and those new to the workforce are likely to be the worst hit because they’re the first to get cut from struggling payrolls.

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