SEATTLE, Aug. 19, 2015 – The International Franchise Association’s legal fight against the discriminatory provisions of Seattle’s minimum wage law takes another important step forward, with oral arguments scheduled for Sept. 1 at the U.S. Court of Appeals for the Ninth Circuit.
IFA and five Seattle franchisees in March appealed a U.S. District Court decision against their request for a preliminary injunction to stop the city of Seattle from treating franchisees as large, national companies rather than the small, locally-owned businesses that they are.
That appeal has progressed in recent months, with briefs filed by IFA including an Opening Brief and a Reply Brief, and two “friend of the court” amicus briefs filed in support of IFA and the franchisees: by the state of Arizona; and by the U.S. Chamber of Commerce, American Hotel & Lodging Association, Asian American Hotel Owners Association, Home Care Association of America, National Restaurant Association and Washington Retail Association.
Small, locally-owned franchise businesses are treated as large, national companies under Seattle’s minimum wage law due to their affiliation with a franchise network. This treatment, IFA contends in its appeal, violates the Commerce Clause of the U.S. Constitution, given that 96 percent of the franchises operating in Seattle are affiliated with an interstate commerce network.
The IFA appeal argues that the Seattle ordinance defied years of legal precedent clearly defining a franchisee as an independent local business owner who operates separately from its franchisor, which provides brand and marketing materials. IFA also contends that Seattle’s ordinance violates the Equal Protection Clause of the U.S. Constitution, as well as Washington State’s Constitution.
Oral arguments in the appeal are scheduled for Sept. 1 in front of a three-judge panel of the U.S. Court of Appeals for the Ninth Circuit, at the U.S. District Courthouse, 700 Stewart St., in Seattle. According to the current case schedule, the arguments will likely take place sometime in the late morning. Arguing for IFA and the franchisees will be Paul Clement, former U.S. Solicitor General who has argued more than 75 cases before the U.S. Supreme Court.
Meanwhile, as the legal challenge progresses, the American Enterprise Institute (AEI) last week issued a report showing that the Seattle area restaurant industry just had its largest decline in jobs since the midst of the Great Recession (2009). Between January and June of this year, the Seattle area restaurant sector lost 1,300 jobs. The sector had its largest decline – 1,000 jobs – in May 2015, just after the city of Seattle’s minimum wage law took effect on April 1, according to the U.S. Bureau of Labor Statistics cited by AEI.
About the International Franchise Association
Celebrating 55 years of excellence, education and advocacy, the International Franchise Association is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations and educational programs to protect, enhance and promote franchising and the more than 780,000 franchise establishments that support nearly 8.9 million direct jobs, $890 billion of economic output for the U.S. economy and 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees and companies that support the industry in marketing, law, technology and business development.
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