A Democracy Alliance member helped craft Seattle’s $15 minimum wage with the hope of breaking the franchise model.
Radical venture capitalist Nick Hanauer served on a city advisory committee that eventually produced the legislation boosting minimum wages to $15 per hour. The legislation takes special aim at franchisees, forcing them to adopt higher wages than other small businesses under a shorter timeframe.
Hanauer, a private-jet-owning multi-millionaire who once had a speech scrubbed from the TED conference website for being "too political," is a member of the Democracy Alliance, a shadowy collection of liberal millionaires and billionaires that funnels money into Democratic causes. The group has pumped hundreds of millions of dollars into various liberal foundations, Media Matters, and Democratic super PAC Priorities USA. The group is secretive and does not divulge membership rolls, fundraising goals, or allow reporters at its annual meetings.
Hanauer is now at the center of a lawsuit filed by the International Franchise Association to overturn the law, according to the Seattle Times.
"The truth is that franchises like Subway and McDonald’s really are not very good for our local economy. They are economically extractive, civically corrosive and culturally dilutive," Hanauer wrote in an email obtained by the association.
The business group claims that the law is discriminatory because many franchisees are themselves small business owners akin to mom and pop shops. Franchisees pay licensing and other fees to large corporations to operate under the company umbrella, but the vast majority are independently owned and manage their own affairs.
Franchising has been under intense scrutiny by union activists and hostile labor regulators in recent weeks. The National Labor Relations Board (NLRB) overturned decades of precedent in August to hold corporations accountable for the actions of franchisees—a decision that critics say will destroy the model.
AR2, an association ally opposed to the wage law, said the suit’s revelations point to discriminatory intent.
"The members of the advisory committee that developed the minimum wage law in Seattle have bashed franchises and admitted the law is designed to ruin a successful model that has created countless jobs. Once again the ‘Fight for $15’ movement is revealed to be nothing more than an effort by union bosses to get a fatter payday," spokeswoman Natalie Gillam said in a statement.
The lawsuit had oral arguments Tuesday, though the case is expected to stretch into next year.