Yesterday a federal judge denied a preliminary injunction of part of Seattle’s minimum wage ordinance that had been sought by franchisees. The minimum wage ordinance takes effect on April 1; it would gradually increase the city’s minimum wage to $15, and small employers have more time to get there. The ordinance classifies franchisees as large employers.

As the Seattle Times notes,

The ruling by U.S. District Judge Richard A. Jones, filed late Tuesday, means locally owned franchisees in Seattle are still on the same fast track as large employers toward reaching $15-an-hour pay for their workers within two to three years.

The International Franchise Association and several franchisees had argued that the ordinance discriminates against small franchise businesses and violates the commerce clause, equal protection clause, First Amendment, Lanham Act, ERISA, and the Washington constitution. (The city’s response is here.)

According to the AP,

The president and CEO of the International Franchise Association said the group would continue to fight the parts of Seattle’s new wage law that apply to franchises.

“Yesterday’s decision is clearly a disappointment but it is not the end of this fight,” said Steve Caldeira, the association’s president and CEO, in a statement. “The ordinance is clearly discriminatory and would harm hardworking small business owners who happen to be franchisees.”

He said the group would continue it legal efforts.

As the Seattle Times editorialized last week,

Seattle’s new minimum-wage law means that all low-paid workers in the city will get a raise. But how they’re raised, and how quickly, could mean life or death to many small businesses.

Regardless of Jones’ ruling, the City Council should revisit this inequity.

Meanwhile, Seattle’s response brings up another franchise-related case:

. . . the economically-intertwined relationship between franchisors and franchisees has been the subject of increasing scrutiny in recent months. For example, in an action that goes much further than the Seattle Ordinance in aggregating the resources of a franchisee with its franchisor, the General Counsel of the National Labor Relations Board announced on July 29th that McDonalds, the franchisor, may be held liable for certain claims asserted by employees of McDonalds franchisees.

At one point in the judge’s order in the Seattle case, he acknowledges,

The employees of a franchisee are not employees of the franchisor. Franchisees manage the day-to-day aspects of their business, including making decisions regarding which workers to hire, how many to hire, the benefits they will offer, and how much to pay their employees.

That would seemingly be at odds with the NLRB joint employer ruling.