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Home Care Franchise Owners Fight Seattle $15/Hour Minimum Wage Law

September 11, 2015

The owners of a Seattle home care agency have joined the International Franchise Association (IFA) in suing the city over its $15/hour minimum wage law.

The lawsuit (pdf) — which was argued before a three-judge panel of the U.S. Ninth Circuit Court of Appeals on September 1 — maintains that Seattle’s minimum wage law incorrectly identifies small franchise locations as “large businesses.”

Large businesses, defined as employers with more than 500 workers, must begin to adhere to Seattle’s $15/hour minimum wage by as early as 2017. Small businesses, meanwhile, won’t have to comply until as late as 2021.

Joining the IFA in its lawsuit are Katherine and Mark Lyons, the owners of BrightStar Care of North Seattle, which “provides skilled and unskilled private duty home care and home services.” The Lyons directly employ just 22 people, 14 of whom are currently paid less than $15/hour, the lawsuit says.

As franchisees, the Lyons have adopted the BrightStar brand and business model from the Illinois-based company BrightStar Franchising. Because BrightStar Franchising collectively employs far more than 500 people across the country, Seattle’s law classifies the Lyons’ BrightStar franchise as a large business.

This classification “arbitrarily and irrationally discriminates against small franchisees,” the IFA’s lawsuit argues.

“All About Ability to Pay”

Attorney Stacey Leyton, arguing against the IFA on behalf of labor unions, told the Ninth Circuit that small franchisees are, in fact, well positioned to comply with the $15/hour minimum wage at the earlier deadline.

Leyton argued that owners of franchised locations have a set of unique resources available to them which allow them to pay the higher wage sooner, including “common advertising and recognition…assistance with loans, [and] purchasing power that larger entities have that franchisees can join in with.”

“It’s all about ability to pay,” Greg Narver, an attorney representing Seattle, added. “The point is to get more money into the pockets of workers.”

In March, a federal judge rejected the IFA’s request for a temporary injunction against Seattle’s minimum wage law, which took effect in April.

Steve Caldeira, IFA president and CEO, told the Seattle Times on September 1 that if the Ninth Circuit ruled against his organization, they would continue to fight. “If we have to take this case all the way to the Supreme Court, we’ll do it,” he said.

— by Matthew Ozga

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