The International Franchise Association has asked the U.S. Supreme Court to review a Ninth Circuit court decision that deems franchise operators in Seattle to be large employers because they are part of a chain.

In a petition filed Monday, the IFA contends that a minimum wage increase to $15 per hour in Seattle discriminates against franchise operators in the city, who typically run small, local businesses. Under the minimum wage ordinance, however, those franchisees are defined as larger corporations under a “joint employer” definition, and therefore are required to raise wages sooner.

Under the ordinance, the city’s minimum wage increases to $15 per hour by Jan. 1, 2017, for most employers of more than 500 workers, and by 2021 for employers of 500 or fewer workers.

In 2018, the minimum wage rate for larger employers will be tied to the rate of inflation. After 2025, however, the distinction between large and small employers is eliminated, and the minimum wage rate, projected to be $18.13 at that point, will be the same for all businesses.

The IFA and five franchise operators first sued the city of Seattle in 2014 to attempt to block portions of the ordinance, but the legal challenges so far have been unsuccessful through the Ninth Circuit.

Robert Cresanti, IFA president and CEO, said in a statement that a Supreme Court review is the appropriate next step.

“Our appeal has never sought to prevent the city of Seattle’s wage law from going into effect,” he said. “Our appeal to the Supreme Court will be focused solely on the discriminatory treatment of franchisees under Seattle’s wage law and the motivation to discriminate against interstate commerce.”

The IFA said a response is due from the city of Seattle within 30 days, and the Supreme Court is expected to announce in the spring whether it will agree to hear the case.

Contact Lisa Jennings at lisa.jennings@penton.com.
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