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Supreme Court Finds Proposition 1 Applicable to SeaTac Airport

Supreme Court Finds Proposition 1 Applicable to SeaTac Airport

August 26, 2015

Businesses at SeaTac airport will now be required to increase wages across the board and provide paid sick leave for their employees after a recent Washington State Supreme Court ruling found that the city of SeaTac's 2013 $15 minimum wage law applied to airport facilities under the jurisdiction of the Port of Seattle.

The decision in Filo Foods vs. The City of SeaTac reverses a prior ruling by a King County Superior Court judge that the city's initiative was not binding at the airport. Alaska Airlines and the Washington Restaurant Association helped spearhead the litigation.

After an appeal from labor advocacy groups, the Washington State Supreme Court dismissed all four challenges presented by plaintiff Filo Foods. 

First, Filo Foods claimed the measure violated the state's single-subject rule, arguing that the generality of Proposition 1's ballot title was misleading. The court, however, declared, "This language is sufficiently broad to place voters on notice of its contents."

Second, Filo Foods also said Seattle-Tacoma International Airport should not be required to comply with Proposition 1 because it falls under the jurisdiction of the Port of Seattle. The Supreme Court found no direct conflicts between state law and the municipal ordinance, however, and concluded that enforcing Proposition 1 would not interfere with airport operations.

Third, Filo Foods argued that three federal statutes pre-empted Proposition 1, including the National Labor Relations Act, the Airline Deregulation Act of 1978 and the Railway Labor Act. Finding none of these as pre-emptive statutes, the Supreme Court dismissed each claim.

Fourth, Filo Foods contended that Proposition 1 violated the Commerce Clause of the U.S. Constitution, interpreted by the U.S. Supreme Court as a "restraint on state authority to discriminate against or place burdens on interstate commerce."

The Supreme Court concluded that, "Proposition 1 does not distinguish between persons and entities located in Washington State and those located outside Washington State. The law accordingly does not facially discriminate against interstate commerce."

This particular argument by Filo Foods lost in the lower court case, as well.

In sum, the Washington State Supreme Court upheld Proposition 1 "in its entirety" and found it to be fully applicable to employers doing business at the airport.

Alaska Airlines and Port of Seattle officials have both expressed concern over the new ruling, saying that it will lead to less competition and a greater burden on airport businesses. Not surprisingly, Alaska Airlines will be most affected by the new law. The company is based in SeaTac, and it will be required to provide more of its employees with higher wages, especially compared to other airlines.

The Washington Restaurant Association was critical of the ruling and issued the following statement:

"We are disappointed in the court's decision. The WRA was hopeful that the agreement between port tenants and the Port of Seattle would move forward. This ruling seems to significantly alter previous decisions regarding the authority of cities and port jurisdiction. There are no appeals to be made, as the Supreme Court is the highest law in the state, and we respect the court's judgment. Our focus is now on helping our members succeed as they deal with the results of this verdict."

Workers and labor advocacy groups, however, were delighted. SEIU 775 president David Rolf, whose union spent hundreds of thousands of dollars to pass Proposition 1 in 2013 and paved the way for Seattle's $15 minimum wage, praised the ruling as "one more accelerant for the national $15 movement." 

Some confusion remains, however, about whether employees affected by this ruling will receive retroactive pay. Heather Weiner, spokeswoman for the SeaTac Committee for Good Jobs, believes that though retroactive pay was not necessarily specified by the court's ruling, it should still apply.

The Freedom Foundation has written extensively about the economic effects of a $15 minimum wage, including Proposition 1 in SeaTac. As employers work to cope with the 60 percent increase in the minimum wage from $9.47 to $15 an hour, many will likely respond by scaling back employee benefits and raising prices. And though some employees will be given higher wages, others will lose their jobs or see their hours reduced. 

Though comprehensive employment data for SeaTac is not available, the past year and a half have provided several anecdotes from off-airport businesses about what to expect. One hotel laid off 17 people and closed its restaurant because of Prop 1.  A parking company now adds a "living wage surcharge" to its bills. Employees at another hotel reported losing a list of benefits, with one employee noting that the $15 minimum wage "sounds good, but it's not good."

As employers at the airport adjust to the Supreme Court's ruling, expect to see more of the same.

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