Franchise owners file federal lawsuit over $15 minimum wage

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by ELISA HAHN / KING 5 News

Bio | Email | Follow: @ElisaHahnK5

KING5.com

Posted on June 11, 2014 at 7:15 PM

Updated Wednesday, Jun 11 at 7:14 PM

Seattle's new minimum wage law faces a new challenge: a federal lawsuit.

The International Franchise Association, along with several Seattle franchisees, claim the law discriminates against the owners of small franchises by classifying them as large, national companies.

Under the new law, large businesses have three years to phase in the $15 wage, while small businesses have seven years.

The staff at the Seattle Alphagraphics store is made up of 60 people. The owner, Charles Stempler, said he has a total of 90 employees at several locations, qualifying his business a small business.  But Stempler claimed the city's new $15 minimum wage ordinance discriminates against him because he is a franchisee, making it harder for him to compete with print shops down the street.

"They're going to have a total of seven years to adjust to this wage," said Stempler. "As it currently stands I would only have three. That would put me, my company and my employees at a significant disadvantage and I don't think that's fair."

Stempler is one of several franchisees filing a federal lawsuit against the city of Seattle, for lumping them into a category as a large business, with more than 500 employees.

Mayor Ed Murray responded Wednesday saying franchises have financial advantages other businesses do not.

"They have a food supply, and products that are developed by a corporate national entity, training provided by a corporate national entity, advertising provided by a corporate national entity," said the mayor.  "They are not the same as a local sandwich shop that opens up."

The mayor acknowledged the plaintiffs may be working under tight financial conditions, but suggested the franchisees revisit their business model with the corporations instead.

The International Franchise Association, which also is a plaintiff, says other franchisees, like local Subway owners, would join the lawsuit but fear attacks and retaliation from protesters.

The plaintiffs say all they're seeking is small business status under the new ordinance.
 
 

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