Judge upholds grocery worker “hazard pay” ordinance

It took about fifteen minutes after a hearing this morning for U.S. District Court Judge John Coughenour to issue his ruling dismissing a lawsuit challenging the City of Seattle’s ordinance requiring grocery stores to add $4 per hour of “hazard pay” on to workers’ paychecks.

The plaintiffs, led by the Northwest Grocery Association, had asked the court for a preliminary injunction blocking the implementation and enforcement of the ordinance. The City of Seattle filed a cross-motion asking the judge to dismiss the case for failure to state a plausible claim, i.e. that all of its claims had no factual or legal merit.

Coughenour spent most of the hour-long hearing this morning silently listening, letting both sides lay out all of their legal points, and he only asked one or two questions. The fact that he issued his ruling so quickly means that he had already decided the case based upon the written briefs submitted by both sides and was likely only listening for new information that might upend his legal reasoning. In the end, he agreed with the City on nearly every point.

A key claim by the plaintiffs was that the ordinance is pre-empted by the National Labor Relations Act, because it interferes with the collective bargaining process between the employers and the unions representing grocery workers. The city countered that the ordinance is a “minimum labor standard” and thus is not pre-empted. The plaintiffs responded that it isn’t a minimum labor standard, because it applies to all workers regardless of how much they make. Coughenour ruled for the city, finding that the NLRA is concerned with interference in the process of collective bargaining, but not in the substantive terms that are bargained — unless the government dictates the terms to such an extent that there is nothing left to bargain. He determined that there were plenty of other things still on the table for bargaining so the ordinance is not pre-empted. The judge exerted a bit of legal yoga-stretching in reaching the conclusion that the $4 per hour is not a minimum wage law, but it is a “minimum benefit law,” despite dealing sole with wages. Nevertheless in the end he determined that the ordinance is a “minimum labor standard subject of general applicability” and therefore not pre-empted by the NLRA.

Judge Coughenour also dismissed the claim that the ordinance violates the Equal Protection clause of the Constitution because it applies to large grocery stores but not to smaller ones or to other similarly-situated retail companies, by pointing to case law ruling that governments “must be allowed leeway to approach a perceived problem incrementally.”

Much of the legal debate between the parties was around the level of scrutiny that must be applied to ordinances such as this one that potentially infringe upon constitutional guarantees. The plaintiffs had argued that ordinances that violate the Contracts Clause of the Constitution require strict scrutiny, but the judge found no case law to support that claim despite the Contract Clause being over two hundred years old and the notion of “heightened scrutiny” over eighty years old. He argued the opposite: that requiring that level of scrutiny would “obliterate the ability of government to regulate any economic activity at all.” Instead he ruled that the ordinance was subject to the lowest-level “rational basis” review, where if any rational basis for the ordinance can be posed then it passes muster. He went on to find that a rational basis exists and therefore the ordinance survives review.

Having rejected all of the plaintiffs’ claims, he dismissed the case, and denied the motion for a preliminary injunction. Somewhat unusually, he did not grant the plaintiffs the customary opportunity to file an amended complaint, finding that “any amendment would be futile.”

Coughenour’s ruling leaned heavily on, and followed closely, a ruling earlier this month from a very similar case in Long Beach, California. The judge in that case rejected a motion for a preliminary injunction by the California Grocers Association against the City of Long Beach for its “hazard pay” ordinance. UFCW, the union representing grocery workers in both Long Beach and Seattle, joined as an intervenor in the Long Beach case and has since filed for a motion to dismiss that case that will be heard by the judge next week. But the plaintiffs have already appealed the decision on the preliminary injunction to the Ninth Circuit Court of Appeals, as well as filed an amended complaint.  It is likely that today’s decision on the Seattle hazard pay ordinance is also headed for the Ninth Circuit, and the appeals court may decide to combine the two cases since they both offer essentially identical legal arguments.

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