CHICAGO — An organization representing retailers said Thursday that it was prepared to mount a legal challenge to an ordinance passed by the Chicago City Council requiring big-box stores such as Wal-Mart to pay a minimum wage of $10 an hour and $3 an hour in benefits.

The council’s action on Wednesday capped months of debate and overcame the opposition of Wal-Mart, Target and other companies, as well as Mayor Richard Daley, who said it would stifle development. The measure, which would start going into effect in July 2007, applies to stores that occupy more than 90,000 square feet and are part of companies with gross revenues of $1 billion or more.

“We believe there is a discrimination issue,” said David Vite, president of the Illinois Retail Merchants Association, adding that the ordinance unfairly singles out larger retailers, including Bloomingdale’s, Nordstrom and Marshall Field’s. “What’s the rationale behind enacting something so limited in scope? Why 90,000 square feet?”

Supporters, including union leaders, argued the legislation secures a “living wage” for workers.

The council’s decision, by a vote of 35 to 14, came amid growing debate over wages and benefits for lower-level workers. San Francisco and Santa Fe, N.M., are among the cities that have enacted minimum-wage ordinances for businesses.

Paul Sonn, of the Brennan Center for Justice at New York University Law School, which helped draft the Chicago bill, said there is precedent for legislation that regulates businesses based on size and industry. For example, Cook County, Illinois, enacted labor protections for janitors working in companies of a certain size.

“The city couldn’t go below the minimum wage, but according to Illinois law, they have the ability to adopt stronger protections,” he said.

Vite, along with the Retail Industry Leaders Association, held out hope that Daley would be able to persuade two aldermen to change their minds. At least 34 votes are needed to override a mayoral veto.

“If not, we are prepared to end up at the courthouse,” Vite said. “We do not believe the city has the authority to place this discriminatory provision on private enterprise.”

Sandy Kennedy, RILA’s president, cited the economic implications for the city. Wal-Mart, for example, has said it will open a store on the West Side in September that is almost finished, but suggested it would abort future development plans.

This story first appeared in the July 28, 2006 issue of WWD. Subscribe Today.

“We believe it is a setback for the City of Chicago, its citizens and area retailers,” Kennedy said. “The ordinance is a clear disincentive for more than a dozen retailers.”

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