Seattle Judge Rules on IFA Request for Injunction Against $15 Hourly Minimum Wage for Franchisees
The city of Seattle set a new wage precedent last year when the Seattle City Council approved a measure to increase the minimum wage to $15 per hour in June, 2014. The measure was opposed by the International Franchise Association, which claimed Seattle franchisees would suffer a competitive disadvantage. The IFA sought a preliminary injunction to block certain aspects of the law.
In the article below, Shannon McCarthy, a partner with Miller Nash Graham & Dunn LLP, discusses the recent decision that Judge Jones handed down in this case and what it will mean for Seattle franchisees.
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Judge Jones issued his opinion denying the IFA and franchisee plaintiff’s motion for preliminary injunction in IFA v. City of Seattle. The Seattle $15 minimum wage ordinance is scheduled to become effective on April 1st. Under the new ordinance, franchisees are required to raise wages at the same rate as large employers, which is defined as businesses with more than 500 employees. Franchisees that are part of a national brand that has more than 500 workers nationwide are considered large employers, regardless of the number of employees the franchisees actually employ.
The plaintiffs are not seeking to repeal the minimum wage law in its entirety, but simply to remove the offending definition of large employers that include franchisees as a violation of the commerce clause.
The ordinance will now become effective on April 1st with the first phase-in on wage increases begins; franchisees will be required to pay their employees $11 per hour whereas their local competitors will be required to pay $10 per hour.
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Shannon McCarthy is a partner with Miller Nash Graham & Dunn LLP. She practices in the firm’s franchise & distribution and business practice groups. In her franchise & distribution practice, Shannon primarily represents franchisors at all stages of business development, from start-up to international expansion. She also counsels franchisors in general corporate and business matters.
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