Group Of Seattle Franchise Businesses Sues To Stop $15-an-Hour Minimum Wage

By Maria L. La Ganga
Los Angeles Times.


Five Puget Sound business owners and a trade group based in Washington, D.C., filed suit in federal court Wednesday to stop Seattle from enacting a $15-an-hour minimum wage, which would be the highest in the nation when it takes effect.

The suit, filed by the International Franchise Association and five local franchisees, argues that the new minimum wage discriminates against the owners of franchised businesses because it treats them like national corporations instead of the small businesses that they really are.

The ordinance, which was passed unanimously by the Seattle City Council on June 2 and signed into law by Mayor Ed Murray a day later, violates the U.S. and Washington state Constitutions, the suit says, along with federal statutes and state law, and could put some small franchisees out of business.

The law is scheduled to go into effect in April and will phase in the increased wages over three to seven years depending on the size of the business. Businesses with more than 500 employees will be required to pay higher wages sooner than those with fewer workers.

Under the new law, “a non-franchise business that has 500 employees is treated as a ‘small’ employer whereas a small franchisee with only five employees is treated as a ‘large’ employer if, as is usually the case, the franchisee is part of a network that employs more than 500 workers,” the suit says.

“As a result, until as late as 2025, the Ordinance will impose significantly higher labor costs on small franchisees than on their non-franchised competitors,” the document continues. “During that period, small franchisees are placed at an unfair competitive disadvantage.”

Murray defended the law, pointing out that it started when fast-food workers walked off the job. He said that restaurant franchise owners have corporate support for advertising, food supplies and menu development.

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