## Facts

- Santa Fe enacted a minimum-wage ordinance requiring wages above federal and New Mexico minimums.
- The ordinance initially applied to City workers, certain contractors, and businesses receiving City benefits, and was later expanded to cover certain private employers in the City.
- The ordinance applied to employers licensed in the City with 25 or more workers and authorized employee civil actions for noncompliance.
- Plaintiffs were local business interests subject to the ordinance and argued the City lacked authority to set a local minimum wage above the state minimum.
- Plaintiffs also asserted state-law preemption, an unconstitutional taking, an equal-protection violation based on a small-business exemption, and procedural and discovery-related errors.

## Issues

1. Whether a home-rule municipality may enact a minimum-wage ordinance setting a wage floor higher than the New Mexico Minimum Wage Act.
2. Whether the New Mexico Minimum Wage Act preempts local minimum-wage ordinances.
3. Whether requiring employers to pay a higher local minimum wage constitutes an unconstitutional taking.
4. Whether exempting smaller employers violates equal protection.
5. Whether alleged defects in the City’s enactment procedures or the trial court’s expert-discovery rulings required invalidation or reversal.

## Decision

- The Court of Appeals affirmed the district court and upheld the ordinance.
- The court held a home-rule municipality may set a minimum wage higher than the state Minimum Wage Act where there is no conflict with state law.
- The court found no state-law preemption because the state statute set a floor, not a ceiling, and did not expressly bar higher local wages.
- The court rejected the takings claim, treating the ordinance as general economic regulation rather than a property appropriation.
- The court rejected the equal-protection challenge, concluding the small-business exemption satisfied rational-basis review.
- The court found no basis to invalidate the ordinance based on alleged municipal procedural missteps or claimed trial-court discovery abuses.

## Legal Principles

- Home-rule municipalities may legislate on local matters within their independent authority unless state law clearly restricts that power.
- State preemption requires express preemption, clear legislative intent to occupy the field, or a direct conflict in which local law permits what state law forbids or forbids what state law permits.
- A state minimum-wage statute that establishes a wage floor, without prohibiting higher wages, does not inherently conflict with a higher local minimum wage.
- Generally applicable wage requirements are economic regulation and do not constitute a taking merely because they increase the cost of doing business.
- Classifications in economic and social-welfare ordinances are reviewed under rational-basis scrutiny and are valid if reasonably related to legitimate governmental objectives.
- Appellate review of trial-management and discovery rulings is deferential and requires a showing of prejudice to warrant reversal.

## Conclusion

The court upheld Santa Fe’s local minimum-wage ordinance, holding that home-rule authority permitted a higher local wage in the absence of conflict or preemption by state law, and rejecting constitutional and procedural challenges to the ordinance and its enforcement scheme.


New Mexicans for Free Enter. v. City of Santa Fe, 2006-NMCA-007, 138 N.M. 785, 126 P.3d 1149 (Ct. App. 2005)