June 12, 2014—The International Franchise Association (IFA) announced Wednesday that it, along with five franchisees, filed a lawsuit in U.S. District court in Seattle over the the city’s recently enacted law to increase minimum wage to $15 per hour.
The complaint alleges the law discriminates against franchisees by treating them as large, national companies instead of small locally owned businesses.
The law requires companies with more than 500 employees to raise minimum wage to $15 per hour over three years, starting April 1, 2015. Smaller businesses have a total of seven years to enact the wage increase.
The lawsuit says that the statute requires the city’s 600 franchisees who employ 19,000 workers collectively to meet the three-year deadline because they are part of a franchise network.
“Hundreds of small, locally-owned businesses and thousands of their employees are unfairly threatened by Seattle’s new law,” said Steve Caldeira, IFA president and CEO. “We are not seeking special treatment for franchisees, we are just seeking equal treatment. The city’s minimum wage statute arbitrarily and illegally discriminates against franchisees and significantly increases their labor costs in ways that will harm their businesses, employees, consumers and Seattle’s economy.”
The lawsuit also alleges that the ordinance violates the Equal Protection Clause and the Commerce Clause of the U.S. Constitution because it inconsistently and arbitrarily imposes regulations, which are based partly on business occurring in other states.
For more information on IFA and the suit, go here.
