Seattle taxpayers stuck paying to defend unfair $15-hour min wage

Washington Lodging Association (WLA)

Seattle taxpayers forced to fund expensive outside counsel for city attempt to defend discrimination

SEATTLE, July 8, 2014 – The City of Seattle’s decision to hire expensive outside legal counsel to try to defend its discriminatory actions against small businesses in the recently adopted minimum wage ordinance should outrage every taxpaying resident and business, according to Jan Simon, President and CEO of the Washington Lodging Association (WLA).

Last week the City announced it had hired Susman Godfrey, a Texas law firm with offices in Houston, Dallas, Los Angeles, New York City and Seattle, and Erwin Chemerinsky, dean at the University of California, Irvine School of Law, to assist in its defense of the ordinance.

“As a Seattle taxpayer I am flabbergasted and disappointed that the Mayor and City Council believe it is appropriate to hire an outside law firm charging a reported $1,100 an hour to defend the blatantly discriminatory sections of the ill-conceived ordinance,” said Simon.

Under the City ordinance, businesses with fewer than 500 employees, except franchisees, have seven years to reach $15 an hour. Those with 500 or more – and franchisees, regardless of how many people they employ – have only three years, or four if they provide health insurance.

The Seattle statute unfairly requires Seattle’s 600 franchisees, which own 1,700 franchise locations and employ 19,000 workers, to meet the three-year deadline for large businesses simply because they operate as part of a franchise network. The Seattle ordinance defies years of legal precedent clearly defining a franchisee as an independent local business owner who operates separately from the corporation that provides brand and marketing materials. Hundreds of small locally owned businesses and thousands of their employees are unfairly threatened by Seattle’s new law.

“This adds insult onto injury, as some of the money to pay the exorbitant legal fees to try to defend the indefensible will come from the very people and businesses who are discriminated against,” Simon said. “If the City Attorney’s office drafted the ordinance, why can’t it defend it in court?” ”

The WLA Board of Directors has announced it opposes the franchise language in the City’s recently adopted wage ordinance and supports the lawsuit filed against the City in federal court by five Seattle franchisees and the International Franchise Association. The WLA notes that family-owned hotels with significantly fewer than 500 employees make up the vast majority of the industry.

In Washington, nearly 80 percent of lodging establishments are affiliated with a franchise or brand, including two WLA members who are plaintiffs in the lawsuit, and would be considered large employers under the new ordinance. The American Hotel & Lodging Association – the lodging industry’s national association – also supports the Seattle franchisee lawsuit.

U.S. District Judge Richard Jones of the Western District of Washington will hear the case.

For more information about the lawsuit and the coalition of small business owners working together to oppose the franchisee provisions in the city’s minimum wage law, go to SeattleFranchiseFairness.com.