BNA Daily Labor Report -- March 27, 2002

Copyright 2002 The Bureau of National Affairs, Inc.,

March 27, 2002, Wednesday

59 DLR A-9 (2002)

LENGTH: 752 words



A Louisiana law banning localities from setting their own minimum wages is unconstitutional and does not block a voter-approved hike in the minimum wage in New Orleans, a local judge ruled March 25 (New Orleans Campaign for a Living Wage v. The City of New Orleans, Civ. Dist. Ct., Orleans Parish No. 2002-1824, 3/25/02).

The ruling from the Civil District Court for the Parish of Orleans is a victory for local advocacy groups and unions who have campaigned for the $ 1 minimum wage increase in New Orleans since 1996. However, a coalition of New Orleans businesses is expected to appeal the ruling to the Louisiana Supreme Court.

The minimum wage initiative, approved by 63 percent of New Orleans voters Feb. 2, would raise the minimum wage in New Orleans to $ 6.15 -- $ 1 above the federal rate -- for both private and public sector workers (24 DLR A-1, 2/5/02).

The measure is set to take effect May 2.However, a 1997 Louisiana law (La. R.S. 23:642) bans localities from setting their own minimum wages (113 DLR A-2, 6/12/97), and Louisiana courts had refused to rule on which law would trump the other until the New Orleans ordinance was approved by voters.

Competing Suits Filed After Vote.

To address the competing state and local laws, suits were filed Feb. 3 and 4 in the local district court challenging the constitutionality of both the minimum wage ordinance and the state ban.

Challenging the local ordinance, the Small Business Coalition to Save Jobs -- the main business group opposing the measure -- filed suit against the city.

To fight the state ban, the New Orleans Campaign for a Living Wage -- supported by organizations such as Local 100 of the Service Employees International Union and the Association of Community Organizations for Reform Now (ACORN), an advocacy group for low-wage workers -- filed suit against the city and the state.

The two suits were consolidated for the March 25 ruling.

State Constitution Favors Home Rule, Judge Finds.

In the ruling, Judge Rosemary Ledet said that under the Louisiana constitution opponents of a local ordinance must prove that the conflicting state law is vital to the interests of the state as a whole, a reasonable exercise of the state's police power, and that the state's interest cannot be
achieved through alternative means less detrimental to home rule powers.

According to Ledet, the evidence presented by the business coalition included no empirical evidence, only the "biased" testimony of a professor who opposes all mandatory minimum wages, whether federal, state, or local. Conversely, Ledet said, the testimony on behalf of the ordinance included a 1999 study that showed how a $ 1 minimum wage increase would have a negligible effect on local businesses.

The opponents of the ordinance failed to prove that the local minimum wage ban is necessary to protect the state as a whole, Ledet said. The state ban is "too severe" and unconstitutional, Ledet ruled.

On the question of the local ordinance's constitutionality, Ledet found that the state constitution only prohibits municipalities from enacting ordinances that govern "private" relationships, particularly tort, contract, and workers' compensation laws. The minimum wage law does not govern any of these relationships, and therefore is not unconstitutional under Louisiana law, Ledet ruled.

Appeal to State Supreme Court Expected.

According to Topper Thompson, an attorney representing the business coalition, the decision is a "fair ruling," considering that Ledet is an elected judge in a city that approved the minimum wage ordinance through voting.

Thompson said that the business coalition plans to appeal the lower court's decision to the Louisiana Supreme Court, because "economic chaos may reign in the state" if the home-rule theory ultimately prevails.

The business coalition is moving quickly to prepare their appeal, because they would like the issue to be settled before the implementation date of the ordinance, Thompson said.

According to Wade Rathke, chief organizer for SEIU Local 100, proponents of the minimum wage hike will ask the business coalition to post a $3.5 million bond for each month past the May implementation date the issue is delayed in the courts.

"We're just extremely confident at this point," Rathke said. "The burden is on them to stop these [delaying] tactics," he added.

Click here to return to the New Orleans Living Wage page.