The city continued its legal fight for its living wage law last week when it filed a defense to an appeal by Marina restaurant Skates by the Bay.
Skates, which leases city-owned property and is thus compelled by city ordinance to pay employees at least $11.37 an hour, is fighting the living wage law, claiming it violates a 34-year-old lease agreement.
The city won the first round of legal fighting in March 2001, when a U.S. District Court upheld the ordinance. But Skates, owned by parent company Restaurants Unlimited, filed an appeal in the U.S. Ninth Circuit Court of Appeals, prolonging the court battle.
The appeals court decision is not expected for another year, but the city reserves the right to take independent action, including revoking the restaurant’s lease.
City Attorney Manuela Albuquerque refused to comment on what action the city might take. However she said the city has so far refused a request by Skates to keep its lease until the appeals court weighs in.
Skates said in its request that it would honor the living wage law if it loses in court and would pay backpay to workers. Skates has maintained a bank account, which holds the difference between its employees’ actual wages and the living wage.
Although City Council discussed the matter in closed chambers last week and would not disclose its course of action, Councilmember Kriss Worthington said the council remains unanimously in favor of moving forward to ensure compliance.
The city’s living wage ordinance was passed in June 2000 in an effort to help low-wage employees afford the area’s high cost of living. The law originally only pertained to businesses with city contracts, but in September 2000 the city amended the law to include private businesses on city-owned property in the Marina that employ more than six people and generate more than $350,000 a year.
Zack Wasserman, of Wendell, Rosen & Black LLP which represents the restaurant, says that the ordinance has created an unfair burden on businesses in the Marina, and should not apply to Skates because its 50-year lease still has 16 years remaining.
But Andy Kahn, of Davis Cowells & Bowe, the law firm representing Local 2850 Hotel and Restaurant Employees Union, doubted Skates’ appeal had merit.
“They treat the lease as some sort of halo to protect them from city regulation,” he said, explaining that, by Skates’ reasoning, the restaurant would be immune to new environmental and safety laws as well.
Other Marina businesses such as Hs Lordship’s and the Radisson Hotel are not affected by the ordinance, because they have unionized labor.
Worthington was optimistic. He said that facing pressure, Skates would ultimately comply with Berkeley rules.
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