The International Franchise Association lost its appeal against the city of Seattle’s minimum-wage law when a three-judge panel of the U.S. 9th Circuit Court of Appeals upheld an earlier court decision.
The International Franchise Association (IFA) has lost its appeal against the city of Seattle’s minimum-wage law.
A three-judge panel of the U.S. 9th Circuit Court of Appeals on Friday sided with an earlier court decision denying the IFA a temporary injunction to block a portion of the city’s minimum-wage law.
“The panel held that IFA did not show that it was likely to succeed on the merits or that a preliminary injunction was in the public interest,” the 9th Circuit panel wrote in its ruling.
The IFA and five local franchisees had sought to temporarily halt the portion of the law that would have put locally owned franchisees on the same fast track as large businesses in paying employees $15 an hour.
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U.S. District Court Judge Richard Jones had ruled in March that the IFA hadn’t shown that the city intended to discriminate against them and that there was no credible evidence showing that the law would cause franchisees to close or reduce operations.
The plaintiffs appealed, and in a hearing before the 9th Circuit panel earlier this month, pressed their argument that the city’s minimum-wage law violated the Commerce Clause of the U.S. Constitution by discriminating against franchisees solely based on the franchisees’ affiliation with interstate commerce — i.e., the franchise network.
The city of Seattle, meanwhile, insisted that the intent of the law was not to target franchisees but to put more money into the pockets of workers. The city also said that the purpose of putting franchisees on the same fast track as large employers was to identify businesses that had the resources to pay more sooner.
The 9th Circuit panel said in its Friday decision that, in evaluating whether local franchisees would suffer irreparable harm, “the chain of events suggested by IFA was speculation that did not rise beyond the mere possibility of harm.”
The panel also rejected IFA’s claims that the Seattle ordinance violated the Commerce Clause, determining “that there was insufficient evidence of a burden on interstate commerce.”
The panel also said Jones did not err in finding that there was a legitimate purpose for the city classifying the local franchisees as large employers.
The panel further said that “IFA did not provide persuasive evidence showing that the public interest would suffer as a result of allowing the ordinance to take effect, failed to raise serious questions going to the merits of any of its claim, and failed to show that an injunction was in the public interest.”
Robert Cresanti, IFA’s executive vice president of government relations and public policy, said in a news release that “today’s decision is clearly a disappointment as the ordinance is blatantly discriminatory and affirmatively harms Seattle hardworking franchise small-business owners every day since it has gone into effect.”
Cresanti, in the news release, also hinted at the IFA’s next step, saying that in its decision, the 9th Circuit panel acknowledged that the 11th Circuit Court of Appeals struck down restrictions on franchises as unconstitutional under the Commerce Clause.
“The absence of controlling Supreme Court precedent, and the conflict among the decisions of the federal circuit courts, suggests that Supreme Court review of the 9th Circuit’s decision may be appropriate,” Cresanti said in the news release.
Seattle Mayor Ed Murray said in a news release that “Today’s unanimous decision is a victory for Seattle’s workers.”