A Jefferson County Circuit Court judge upheld the city’s minimum wage law on Monday, at least temporarily turning back a challenge from Kentucky restaurants and retailers two days before the first phase of the increase is set to begin.
An attorney for the plaintiffs told IL they would appeal the ruling.
In her order, Judge Judith McDonald-Burkman said Louisville Metro government has the authority to set the minimum wage higher than the $7.25 an hour set by the General Assembly. The Kentucky Restaurant Association, Kentucky Retail Federation, and Park Hill business Packaging Unlimited sued earlier this year, after the law was approved by Metro Council and signed by Mayor Greg Fischer, arguing that state law does not give cities in Kentucky that authority.
With the ruling, the local minimum wage is set to increase to $7.75 per hour on Wednesday. It will eventually rise to $9 per hour over the next two years.
“I’m pleased the court has upheld my right to enact a minimum wage, as well as other local governments,” said Fischer in a statement. “The Metro Council and I took this step last summer to provide working families a higher minimum wage because we know that many struggle to pay for housing, food, clothing and medical care. Today’s favorable ruling will have a real impact on many Louisville families.”
Metro Councilman David James, D-6, said he was “doing somersaults” after the order.
“We knew we were on solid legal ground, and that’s why we went forward,” he said. “The best part is, beginning Wednesday, the workers here in Louisville are going to be making $7.75 an hour — they’re getting a 50-cent pay raise. That helps our economy, helps our community, helps their families.”
A spokeswoman for the Kentucky Retail Federation referred all questions to attorney Brent Baughman, who confirmed the groups would seek an injunction from the Kentucky Court of Appeals before the new wage takes effect on Wednesday.
“We’re disappointed with the result, but I think everyone, when we started this process, understood that this case was almost destined to go up on appeal one way or another,” he said.
The groups, along with Greater Louisville Inc., the city’s chamber of commerce, have long argued the law would put them at a competitive disadvantage. A spokeswoman for GLI did not immediately return a request for comment.
The challenge to the law centered on a dispute over home rule, and whether Metro government was within its rights to establish a minimum wage higher than the floor set by the General Assembly. In her order, Judge McDonald-Burkman wrote that state law only sets the floor — tied to the federal minimum wage — leaving room for local governments to raise it if they choose.
“The General Assembly granted cities of the first class such as Louisville broad authority to govern itself, finding conditions in such cities to be ‘sufficiently different from those found in other cities to necessitate this grant of authority and complete home rule (emphasis in the judge’s order),’ which is to be construed broadly,” she wrote. “Those ‘sufficiently different’ conditions include economic factors such as cost of living and economic development and viability.”
The judge also threw out the plaintiffs’ argument that creating a minimum wage higher than the rest of the state would burden businesses with additional compliance challenges, citing other laws — such as smoking bans — that vary by city.
Jason Bailey, executive director of the Kentucky Center for Economic Policy, testified before the council in favor of the ordinance. His organization has estimated the increase would raise wages for 45,000 workers in Louisville.
“The judge’s ruling clearly says that current state law only creates a floor for wages that is tied to the federal minimum wage,” Bailey said in a statement. “That means cities are more than welcome to increase their wages as they see fit. Because of that, we encourage other cities to follow Louisville’s lead and pass minimum wage ordinances and for state lawmakers to enact a statewide increase in 2016.”
The ruling also brought back to the fore a simmering dispute between supporters of a higher minimum wage and Fischer. The mayor publicly opposed an effort to raise the local minimum wage to $10.10 per hour last year and threatened to veto any ordinance doing so. That threat led the council to eventually settle on the $9 per hour compromise, which is 25 cents higher than what the mayor proposed.
Echoing businesses’ arguments, Fischer said then that a higher minimum wage would put Louisville companies at a competitive disadvantage, saying he would prefer the General Assembly and Congress raise the minimum wage to ensure a level playing field.
In posts on Twitter and Facebook, former Metro Councilwoman Attica Scott, who helped lead the effort for a $10.10 minimum wage, challenged the mayor’s account, saying Fischer was “full of it. He did not take this step.” She credited local labor leaders and social justice organizers for working to raise the minimum wage.
James, the Metro Councilman who represents Old Louisville, said the mayor blocked a higher wage increase.
“We would be celebrating an increase to $10.10 an hour had the mayor not threatened to veto it,” he said. “And we would be helping more families.”
Read the judge’s order: