After a recent Eleventh Circuit decision in Lewis v. Governor of Alabama 896 F.3d 1282 (11th Cir. 2018), the Eleventh Circuit Court of Appeals agreed to a full-court review to decide the validity of a 2016 Alabama Law prohibiting cities or other local municipalities from adopting their own laws concerning minimum wages. The law was originally enacted in response to an ordinance by the Birmingham City Council that increased the minimum wage for all employees within the Birmingham City’s boundaries from the current federal minimum of $7.25 to $10.10. The day after this ordinance was enacted to increase the minimum wage, the Alabama Legislature enacted and the Governor signed the Alabama Minimum Wage Act, voiding Birmingham’s wage increase after one day of operation.
In Lewis, plaintiffs were employees whose hourly wages increased under the city ordinance. Plaintiffs sued state officials, alleging that the state law purposefully discriminated against Birmingham’s black citizens in violation of the Equal Protection Clause by denying them economic opportunities on account of their race. The district court granted the defendants’ motion to dismiss.
A three-judge panel of the Eleventh Circuit reversed the district court’s decision and held that the plaintiffs sufficiently alleged facts to maintain the plaintiffs’ race discrimination claims. The panel stated the “plaintiffs have stated a plausible claim that the Minimum Wage Act had the purpose and effect of depriving Birmingham’s black citizens equal economic opportunities on the basis of race.” State officials then asked the appeals court to reconsider with a hearing before a larger panel of judges.
On December 13, 2019, the en banc Eleventh Circuit ruled, by a vote of 7 to 5, that the plaintiffs did not have Article III standing to sue the state attorney general. The Court found it unnecessary to reach the merits of the equal-protection claim. The majority ruled that the plaintiffs failed to satisfy the “traceability” and “redressability” components of the standing requirement as they could not trace their lower wages to anything the state attorney did wrong and a judgment against the state attorney general would not have led their employers to pay them a higher wage.
In light of this decision, the Alabama Minimum Wage Act has been upheld, and Alabama will continue to prohibit cities and municipalities from adopting local laws requiring higher minimum wages than permitted under state law. Employers in Alabama should make sure they are in compliance with this Act by determining they are paying the correct minimum wage to their employees under Alabama law.