Wage increase rejected by court
N.O. charter change voided in 6-1 vote

09/05/02

By Susan Finch and Rebecca Mowbray
Staff writers/The Times-Picayune

The Louisiana Supreme Court on Wednesday rejected as unconstitutional a voter-approved change in the New Orleans City Charter that would have made the minimum wage in Orleans higher than the federal minimum wage paid in surrounding parishes.

Passed in February as an amendment to New Orleans' charter, the law would have required private employers to pay their workers $6.15 an hour or $1 above the federal hourly minimum, whichever is greater.

The high court's 6-1 decision branded the local wage law as an illegal encroachment on power reserved to the state and upheld a 1997 Louisiana law that forbids local governments from setting minimum-wage rules.

The lone dissent came from Associate Justice Bernette Johnson of New Orleans: "The city's effort to insure that a working family has the ability to live above the poverty line, without relying on government subsidies (food stamps, etc.), is a legitimate exercise of its authority under the Home Rule Charter," she said.

The ruling prompted rival news conferences by the two groups that had faced off in court.

"It's a great day for New Orleans," said Jim Funk, executive vice president of the Louisiana Restaurant Association, which spearheaded creation of the Small Business Coalition to Save Jobs and sued to have the law tossed out. "New Orleans is going to be able to remain competitive with other parts of the state," he said, recapping the group's argument that businesses would flee to outlying parishes if Orleans imposed a higher minimum wage.

The business coalition appealed to the Supreme Court after Civil District Judge Rose Ledet this spring upheld the New Orleans charter amendment and declared unconstitutional a 1997 law banning local minimum wages.

Had the high court sided with Ledet, every Louisiana city with a home rule charter could have set a local minimum wage, and the result would have been a "balkanization" of business practices across the state, business coalition attorney Topper Thompson said.

Union to urge legislation

Spokespeople for the New Orleans Campaign for a Living Wage, which fought for six years to get the minimum-wage proposal on the February ballot, called the ruling a cruel blow but said they'd keep trying to win a raise for the city's lowest-paid workers.

Supporters of the rejected minimum-wage law can ask the state high court to reconsider the case or appeal to the U.S. Supreme Court, one of their attorneys said.

But Wade Rathke, president of Local 100 of the Service Employees International Union, said that "once the gloating is over" his group and others who pressed for the minimum-wage law would try jawboning, rather than further litigation, to convince the business community of the need for higher pay.

"We're not going to win by driving our people to other states," he said. "We're not going to win by going to the bottom in wages and jobs."

Rathke said consideration will be given to lobbying the Legislature for a statewide minimum-wage increase or a law requiring businesses with government contracts to pay a higher minimum.

Rathke said state Sen. Cleo Fields, D-Baton Rouge, and state Rep. Leonard Lucas, D-New Orleans, are prepared to introduce bills to raise the state's minimum wage $1 higher than the federal minimum wage.

But state Rep. Steve Scalise, R-Jefferson, the sponsor of the 1997 law that banned local minimum wages, said the prevailing sentiment in the Legislature would be against raising the minimum wage.

Attempts to raise wages for government contractors are also doomed, business coalition attorneys said, because raising pay rates for private companies would fly in the face of Wednesday's court ruling and impose a financial burden on taxpayers.

Justices offer rationales

The six Supreme Court members who agreed that the New Orleans minimum-wage law violated the state Constitution were divided on the reasons why it did so.

Associate Justice Catherine Kimball, who wrote the majority opinion, was joined by Associate Justices Chet Traylor, Jeannette Theriot Knoll and Jeffrey Victory in the view that the New Orleans Home Rule Charter change intruded on the state's constitutionally granted "police power" to govern matters affecting health, safety and welfare.

"The Legislature chose to require statewide regulation of minimum-wage laws to maintain consistency in the wage market, and we find this policy choice to be reasonable in light of the evidence presented," Kimball wrote.

Kimball's decision took a couple of swipes at Ledet.

By dismissing as biased the local economist who testified against local minimum wages and agreeing with testimony of the expert presented by the wage-increase proponents, Ledet "second-guessed the reasoned policy choice of the Legislature," Kimball said.

In separate concurring opinions, Supreme Court Chief Justice Pascal Calogero and Associate Justice John Weimer said the New Orleans minimum-wage law had to fall because it ran afoul of a part of the Constitution that gives the state exclusive power to govern private or civil relationships, including employment.

Calogero said he doesn't think opponents of the New Orleans minimum wage proved the measure would have interfered with the state's police powers.

"I am not convinced that having a uniform minimum wage throughout the state is necessary to prevent an evil from befalling the people of the State of Louisiana," he said. The law that established the federal minimum wage allows for state and local laws that might require higher minimums, he said.

'A serious societal issue'

Weimer ended his 17-page concurring opinion by saying the issue before the court was not "whether those who toil for minimum wage are entitled to additional compensation" or whether there has been a thwarting of the will of New Orleans voters, only whether the city or the state has the power to control the minimum wage.

"This case does highlight a serious societal issue," Weimer said, adding that no one should "revel" in the outcome. Instead, Weimer said, "the time, talent and effort exerted in this matter" perhaps could be productively channeled into "a public discussion on how to address the difficult societal and economic issues presented by this litigation."

A spokesman for New Orleans Mayor Ray Nagin, who was not in office when voters approved the minimum-wage proposition, said Wednesday that the mayor "has consistently said that the minimum wage should be changed at the federal level so it affects the entire country, not just one municipality."

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Susan Finch can be reached at sfinch@timespicayune.com or (504) 826-3340. Rebecca Mowbray can be reached at rmowbray@timespicayune.com or (504) 826-3417.
© The Times-Picayune. Used with permission.

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