The Kentucky Supreme Court issued a 6-1 ruling on Thursday striking down a Louisville ordinance passed in 2014 raising the minimum wage in Jefferson County by increments to $9 an hour.
The lawsuit — filed last year by the Kentucky Restaurant Association, Kentucky Retail Federation, and Louisville manufacturer Packaging Unlimited — argued that Louisville Metro Government did not have the authority to raise the minimum wage in its own jurisdiction due to state law. The plaintiffs originally lost the case in Jefferson Circuit Court last year, but appealed that ruling straight to the Supreme Court, where they won on Thursday.
“While we are still analyzing the opinion, we’re pleased the Court upheld the rule of law and agreed with our arguments that local governments cannot establish a minimum wage and recognize the comprehensive scheme of legislation that already exists in state law,” said Kentucky Restaurant Association president Stacy Roof in a statement released Thursday afternoon.
“Employers can rest assured knowing localities cannot devise a patchwork quilt of employment laws,” said Kentucky Retail Federation president Tod Griffin in the joint statement with KRA.
Despite the Kentucky Supreme Court ruling, employees in Louisville already have increased their minimum wage pay from $7.25 an hour — the federal minimum wage limit — to $8.25 an hour during the past two years as part of Louisville’s minimum wage hike. It’s unknown if any employers will roll back the pay increases following the state Supreme Court ruling.
“That is up to the employers. I can’t imagine most of them will,” Roof told IL. “I just don’t see that happening.”
State Supreme Court Justice Bill Cunningham wrote the majority opinion, with Justices John Minton, Daniel Venters, Mary Noble and Michelle Keller concurring. They referred to the case as “a historic clash between the competing authority of the Louisville-Jefferson County government and the Kentucky General Assembly,” and while citing the broad authority vested to local governments under “Home Rule” under state law, they found that the ordinance passed by Metro Council “is invalid unless additional statutory authority permits municipalities to raise the minimum wage.” Therefore, the justices concluded that Metro Council “exceeded its authority” and the ordinance “is therefore invalid and unenforceable.”
Justice Lisabeth Tabor Hughes issued a separate concurring opinion, though she noted that the cost of living is much higher in urban areas like Louisville, and therefore the General Assembly “could well recognize home rule authority in the area of minimum wages.” However, until the legislature does so, Hughes concluded that the ordinance in question conflicts with state law.
Justice Samuel Wright III offered the only dissenting opinion, finding no conflict between the ordinance and existing minimum wage laws of the state. Wright wrote that the state law “requires an employer to pay a wage of ‘not less than’ the amount set by statute. This statute was passed to protect workers from being paid a lesser wage. The majority’s view is that the statute expressly permitted the employer to pay the minimum. This reading of the statute requires a view that it was passed to protect the employer. The majority’s conclusion is inconsistent with the purpose of the statute and its history.”
The Supreme Court ruling also invalidates the law passed by Lexington’s city council last year that raised its minimum wage incrementally to $10.10 an hour.
Jefferson County Attorney Mike O’Connell, who defended the city’s ordinance in court, issued a statement that he is “very disappointed with the ruling but the Court has spoken. This is now a question for the General Assembly and if it will permit local governments to set a minimum wage.”
Jason Bailey, the executive director of the Kentucky Center for Economic Policy, issued a statement calling Thursday’s ruling “a big setback for the tens of thousands of hard working, low wage Kentucky workers scheduled to get much-needed raises that would boost their families and local economies. It is now up to the General Assembly to take action when they next meet to correct this injustice and ensure more Kentuckians who work can meet their basic needs.”
In contrast, the city’s chamber of commerce was pleased with the reversal.
“Today’s ruling now clearly defines the legal process needed to change the minimum wage laws in Kentucky,” Sarah Davasher-Wisdom, COO of Greater Louisville Inc., said in a statement. “As an organization, GLI’s primary focus is on regional economic development and a creating a business-friendly environment for companies to move and expand throughout the region. GLI has always been concerned with a patchwork of wage laws at the local level differing in our own region. Additionally, current market forces are already dictating the need for higher wages based on the number of open positions at all levels in our region.“
Several Republican Metro Council members also issued statements in support of the Supreme Court’s decision.
“As we said nearly two years ago, we are concerned with any ordinance that would make our laws significantly different than those in the counties surrounding us, both in Kentucky and Indiana,” said Councilwoman Marilyn Parker, R-18. “Louisville already has a higher tax burden and more regulations which already put us at a disadvantage. This ruling will help to keep and grow jobs, and create new opportunities to grow and expand businesses for Louisville workers rather than push them away.”
Councilman Kelly Downard, R-16, echoed that sentiment, adding, “While those persons pushing this ordinance might have had the best of intentions, it was stated by many Democrats and Republicans that this law was probably unconstitutional, yet enough Democrats on this Metro Council decided to move us into this legal battle that we have lost today by a vote of 6-1 at the Kentucky Supreme Court.”
And Councilwoman Angela Leet, R-7, said: “Market conditions should be and have been moving wages higher. While I support a higher minimum wage, it I believe it should be accomplished as a result of meeting the needs of the market, at the state level or preferably the Federal level.”
The majority and dissenting opinions of the court can be read below:
Caitlin Bowling contributed to this story.