"Seattle’s new minimum wage law unconstitutionally discriminates against franchisees by categorizing them as big businesses even when they are small and independently owned," complains lawyer Paul D. Clement in a press release from the IFA. "We're asking the federal court to stop this unfair attack on small business owners who happen to be franchisees."
The lawsuit seeks an injunction to prevent the law from going into effect next April, alleging that the city's new wage law violates, get this, the constitution's Equal Protection Clause by "discriminating" against franchise business, and the Commerce Clause by seeking to regulate business that occurs in other states.
The city's new wage law will force businesses like Subway, Quizno's, and KFC to pay their Seattle-based workers at least a $15 wage by 2017 (or 2018, if their employees receive good-quality employer-based health insurance). But as Mayor Ed Murray said today at an unrelated press conference, that's because, as you'd imagine, corporate-backed national franchises are just "not the same as a local sandwich shop."
Unlike a local independent business, Murray explained, franchisees get pre-fab menus, supply chains, advertising, training, and more, provided directly from their national brands. He also reminded everyone that "the whole movement around wage equality—and not just $15—actually started with fast food workers walking off the job. And I think we have to recognize that's where this started."
While Murray said today that the city has "yet to be served the lawsuit," on the day of the minimum wage vote a week ago, he made clear that the City of Seattle was aware of these legal threats and had done their research about compliance with relevant laws, saying, "We believe we're on pretty solid ground."
"Business lobbyists should be upset about what we've done here," says Sage Wilson, a spokesman for Working Washington, which helped organize the original fast-food strikes and worked tirelessly to pass the $15 wage bill. "We're turning the tide, and they're trying to do what they can" to stop a movement with growing momentum toward higher wages for the working class.
Wilson also mentions that this lawsuit—and the IFA itself, really—is just another example of how close the relationships are between these big companies and their franchisees. "It's a trade group that includes franchisors, the big corporate McDonald's and Subway, as well as the franchisees... Their trade organization is intertwined," he says. "And that trade organization is trying to argue that they're totally separate?"
If you'd like to check out more about the franchise lawsuit, the IFA has set up a website about it right over here, with a video all about "fairness" and "discrimination." You'll notice they call out two franchise-friendly news sources right on their front page: a screenshot from Fox News's Fox and Friends and an editorial from our very own Seattle Times. (They even cite that Seattle Times editorial in the suit.)
They also say—the horror!—that the $15 wage "could unfairly and unjustifiably destroy the established franchise model in Seattle."