Food Industry: Seattle’s Wage Hike Violates Corporate Constitutional Rights

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Food Industry: Seattle’s Wage Hike Violates Corporate Constitutional Rights

Jessica Mason Pieklo

The lawsuit seeks to block a Seattle ordinance that boosts the minimum wage to $15 an hour.

A federal court in Seattle heard arguments Tuesday from a powerful food industry group and McDonald’s, Holiday Inn, and Comfort Inn franchise owners who claim Seattle’s minimum wage hike to $15 per hour violates the 14th Amendment and should be blocked.

The lawsuit, filed in federal court in June by attorneys on behalf of the International Franchise Association and five franchise owners, claims the law “unfairly and irrationally discriminates” against franchisees by classifying them as “large” employers under the ordinance. The plaintiffs argue that local franchises like McDonald’s, Holiday Inn, and others should be covered only if they meet the ordinance’s employee threshold requirement.

Seattle’s ordinance requires large businesses, defined as those with more than 500 employees, to raise the minimum wage to $15 an hour over three years starting April 1.

Businesses that employ fewer people have seven years to phase in the wage increase. Employers with 500 or fewer employees will be required to pay workers at least $10 an hour starting in April.

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Former Solicitor General Paul Clement represents the plaintiffs in the lawsuit. Clement, a partner at a Washington, D.C., law firm, frequently represents conservative interests in high profile cases before the U.S. Supreme Court. Clement represented Hobby Lobby in its challenge to the birth control benefit in the Affordable Care Act. Clement also argued unsuccessfully the first Affordable Care Act challenge and was instrumental in Shelby County v. Holder, the case that effectively gutted the Voting Rights Act.

Seattle’s ordinance violates the U.S. Constitution’s Commerce Clause and discriminates against interstate commerce, according to the complaint. The plaintiffs say the ordinance “preferences small local employers and prejudices other small employers merely because of their affiliation with out-of-state operations.”

The plaintiffs also claim Seattle’s ordinance violates their corporate “personhood” rights under the 14th Amendment’s equal protection clause, by arbitrarily and irrationally discriminating against small franchisees. The 14th Amendment’s equal protection clause provides that no state shall “deny to any person within its jurisdiction the equal protection of the laws.”

The legal campaign by national franchises against Seattle’s minimum wage increases comes as worker advocates launch campaigns to raise the minimum wage nationwide and as regulators are increasingly willing to hold corporate parents liable for the unlawful actions of their franchisees.

The court did not immediately issue a ruling on the request to block Seattle’s ordinance. Should the court grant the plaintiffs’ request, they would be shielded from the wage increase while the matter proceeds to trial in October.