Supreme Court Defeat For Corporations Raising Constitutional Challenge to Seattle Minimum Wage

Jeffrey Clements Posted by Jeffrey Clements.

Jeffrey Clements is a cofounder and general counsel of Free Speech for People, a national, nonpartisan campaign to oppose corporate personhood and pass the People’s Rights Amendment.


This week, the Supreme Court announced that it would not hear an appeal of a constitutional challenge to Seattle’s minimum wage law brought by a franchise industry trade group.

This week, the Supreme Court announced that it would not hear an appeal of a constitutional challenge to Seattle’s minimum wage law brought by a franchise industry trade group. The decision probably puts the kibosh on corporate constitutional challenges to minimum wage laws for the foreseeable future.

Some background: In 2014, Seattle passed a new minimum wage ordinance, raising the minimum wage to $15 over the course of several years. The law’s schedule allowed small businesses several extra years to get to $15. Crucially, the law puts franchise locations of large chains (such as McDonald’s) on the schedule for big business, rather than small business.

A trade group representing the franchise industries challenged the law as unconstitutionally discriminating against franchised businesses.

This wasn’t the first time corporations have claimed that a minimum wage law violated their constitutional rights. In recent years, we’ve seen a wave of corporate constitutional challenges to minimum wage laws all over the country. And so far, these challenges haven’t worked. But the industry bet big on this case. They prepared for a major Supreme Court battle, hiring a top-notch Supreme Court litigator to argue the case from day one.

But Free Speech For People was also there from day one, standing with the City of Seattle. We filed friend-of-the-court briefs in the trial court and the court of appeals rebutting the industry’s claim that the minimum wage law’s implementation schedule for somehow violated the constitutional rights of corporations. (Our brief in the court of appeals was joined by our allies at DemosCourage Campaign, and the Equal Justice Society.) Meanwhile, in a similar case filed in Los Angeles by the hotel industry, after we filed an amicus brief opposing the industry’s constitutional claims, the industry withdrew all of its constitutional claims. (We don’t take a position on minimum wage laws as such; our concern is when businesses cook up “corporate constitutional rights” theories to challenge these laws.)

The Seattle litigation has been an unmitigated disaster for the franchise industry. Their claims were rejected in the trial court and again at the court of appeals. By the time they filed their long-planned Supreme Court appeal, their grand constitutional claims were reduced to a single claim involving interstate commerce. And the Supreme Court has refused to hear even that.

What does this mean for the long term? In the Seattle case itself, it’s probably over. Technically, this was an appeal about the trial court’s refusal to enter a preliminary injunction against the law, and the industry could still seek to conduct an actual trial. But that’s very unlikely; the law’s initial increases have already taken effect, and by the time a trial could be held (before the same judge who already rejected their claims), the implementation schedule could easily be halfway through. And perhaps more importantly, there’s no reason to think that the decision would come out any differently after a trial.

More broadly, this decision could mark the end of corporate challenges to minimum wage laws. Technically, the Supreme Court’s decision not to hear the case does not set binding national precedent; it simply lets the decision of the U.S. Court of Appeals for the Ninth Circuit (which covers much of the West) remain in place. But it sends a signal that will be read by corporations considering filing more of these lawsuits. They had their chance, and they failed. Unless the composition of the Court were to veer in a more corporatist direction (which is unlikely right now), there probably won’t be five votes to overturn minimum wage laws on constitutional grounds. If anything, the Court may be poised for a rollback of some of its most toxic anti-democracy decisions.

That doesn’t mean the fight is over. Corporations continue to raise far-reaching constitutional challenges to laws regarding everything from food labeling to securities disclosure. And now banks are claiming a constitutional right to billions of dollars in federal subsidies. That’s why we at Free Speech For People continue to advocate not only in court, but also for a permanent constitutional amendment reaffirming that constitutional rights belong to people, not corporations.

But for now, “We the People” can take a victory lap.

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