RUI One Corp. v. City of Berkeley, 371 F.3d 1137 (9th Cir. 2004)

In 2000, the City of Berkeley enacted its living wage ordinance, which mandated minimum hourly wages and employee benefits be provided by private employers located within the Berkeley Marina or that received some form of financial benefit from the City (e.g., City contract awardees, lessees of City property, City financial aid recipients) and that met specified criteria (i.e., number of employees and amount of annual revenues). The City mandated that employers meeting the relevant criteria be required to pay their employees a minimum of $9.75 per hour, unless they failed to provide health benefits to their employees, in which case they were required to pay their employees a minimum of $11.37 per hour. (At the time of the enactment of the ordinance, the California minimum wage was $5.75 per hour.) The ordinance also required covered employers to provide a minimum of 22 days off of work per year for vacation, sick leave or personal necessity, of which at least 12 days were to be paid. RUI One Corporation, which was the assignee of a lease within the Marina, challenged the ordinance on grounds that it violated the Contract Clause, Equal Protection Clause and Due Process Clause of the United States Constitution. Over a year after the challenge was filed, the district court permitted the Hotel Employees & Restaurant Employees Union, Local 2850, to intervene on behalf of the City. The district court ruled that the ordinance did not violate the Constitution, and the Ninth Circuit affirmed in this 2-to-1 decision.