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IFA to appeal Seattle minimum wage law on behalf of franchisees

The International Franchise Association announced today that it will appeal a recent decision in federal court that the organization claims allows the city of Seattle to discriminate against small franchised businesses as part of the city's 2014 minimum wage law.

March 20, 2015

The International Franchise Association announced today that it will appeal a recent decision in federal court that the organization claims allows the city of Seattle to discriminate against small franchised businesses as part of the city's 2014 minimum wage law. IFA sought a preliminary injunction, which was denied by U.S. District Judge Richard A. Jones in court earlier this week, the association said.

IFA and five Seattle franchisees reported they will appeal Judge Jones' decision to the United States Court of Appeals for the Ninth Circuit. The original lawsuit was filed in June 2014 requesting "fair treatment for franchises under the law, which treats them as large, national companies, rather than the small, locally-owned businesses" the organization believes them to be.

"Franchisees deserve fairness under the law and we will continue to aggressively advocate on their behalf in federal circuit court," IFA President & CEO Steve Caldeira said in a statement. "We are not seeking to prevent Seattle's minimum wage increase from going into effect. Our appeal will be focused on the blatant discriminatory mistreatment of franchisees under Seattle's new law and the City's improper motivation to discriminate against interstate commerce.

"Franchisees compete for the same customers as non-franchised businesses in Seattle, and they face the same challenges other small businesses face and this regulation puts them at a severe economic disadvantage. Therefore, we believe they should be properly categorized as such. Put simply, a small local franchise owner with 10 employees is the same as the small non-franchise business owner," Caldeira stated.

The new law demands that large businesses in Seattle – defined as those with more than 500 employees – raise the minimum wage to $15 an hour over three years, starting April 1, 2015. Smaller businesses are allowed seven years to phase in the wage increase. The new law classifies Seattle's 600 franchisees as large businesses because they operate as part of a franchise network, IFA said.