Graco, Inc. v. City of Minneapolis

925 N.W.2d 262
CourtCourt of Appeals of Minnesota
DecidedMarch 4, 2019
DocketA18-0593
StatusPublished
Cited by1 cases

This text of 925 N.W.2d 262 (Graco, Inc. v. City of Minneapolis) is published on Counsel Stack Legal Research, covering Court of Appeals of Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Graco, Inc. v. City of Minneapolis, 925 N.W.2d 262 (Mich. Ct. App. 2019).

Opinions

WORKE, Judge

This appeal concerns a City of Minneapolis ordinance regulating the minimum wage employers must pay their employees for time worked within the geographic boundaries of the city. Appellant Graco, Inc. sued respondent City of Minneapolis, seeking a declaratory judgment that the ordinance is preempted by state law and a permanent injunction against enforcement of the ordinance. After a court trial, the district court concluded that the ordinance is not preempted by state law, declared the ordinance valid and enforceable, and denied a permanent injunction.

We agree that the city's minimum-wage ordinance is not preempted by state law. Therefore, we affirm.

FACTS

MFLSA establishes the minimum-wage rates employers are required to pay their employees throughout the state of Minnesota. Minn. Stat. § 177.24. It includes the following statement of purpose:

The purpose of the Minnesota Fair Labor Standards Act is (1) to establish minimum wage and overtime compensation standards that maintain workers' health, efficiency, and general well-being; (2) to safeguard existing minimum wage and overtime compensation standards *266that maintain workers' health, efficiency, and general well-being against the unfair competition of wage and hour standards that do not; and (3) to sustain purchasing power and increase employment opportunities.

Minn. Stat. § 177.22. Since its enactment in 1973, the minimum-wage rate for employees has been amended nine times, with each amendment increasing the minimum wage in some way. See 2014 Minn. Laws ch. 166, § 2, at 231-32; 2005 Minn. Laws ch. 44, § 1, at 322-23; 1997 2nd Spec. Sess. Minn. Laws ch. 1, § 1, at 5-6; 1990 Minn. Laws ch. 418, § 2, at 827-28; 1987 Minn. Laws ch. 324, § 1, at 1922; 1984 Minn. Laws ch. 628, art. 4, § 1, at 1666; 1979 Minn. Laws ch. 281, § 2, at 618; 1977 Minn. Laws ch. 183, § 1, at 301; 1976 Minn. Laws ch. 165, § 1, at 495. In its current version, MFLSA provides formulas for calculating rates for small and large employers and requires employers to pay wages at least those rates. Minn. Stat. § 177.24, subd. 1(a)-(b).1 MFLSA currently requires large employers to pay their employees at least $ 9.50 per hour plus a percentage based on inflation, while small employers are required to pay their employees at least $ 7.75 per hour plus a percentage based on inflation. Id. , subd. 1(b)(1)-(2), (f). As of January 1, 2019, the statutory formulas result in a minimum wage of $ 9.86 per hour for large employers and $ 8.04 per hour for small employers. See Minn. Dep't of Labor & Indus., Minnesota's Minimum Wage Laws (2019) , https://www.dli.mn.gov/sites/default/files/pdf/minimum_wage.pdf.

In February 2016, the Minneapolis City Council engaged the University of Minnesota's Roy Wilkins Center for Human Relations and Social Justice (RWC) to analyze the impact of a local minimum-wage increase. In October 2016, RWC completed its study and reported its findings to the city council. As a result of this report, the city council approved a community-engagement plan to gather community feedback through listening sessions, survey responses, and email comments. On June 30, 2017, the city enacted the Municipal Minimum Wage Ordinance (the Ordinance). The Ordinance currently requires "large businesses" to pay their employees at least $ 11.25 per hour and "small businesses" to pay their employees at least $ 10.25 per hour. Minneapolis, Minn. Code of Ordinances (MCO) § 40.390(a)(b)(2), (c)(1).2 The Ordinance applies to time worked within the geographic boundaries of Minneapolis. MCO § 40.370.

On November 10, 2017, Graco and others sued the city, seeking a declaratory judgment that the Ordinance is preempted by state law, and also seeking temporary and permanent injunctions to prohibit enforcement of the Ordinance. The district court denied the motion for a temporary injunction, finding that plaintiffs were unlikely to prevail on the merits and that the public and city would suffer greater harm than plaintiffs if the injunctions were *267granted. After a court trial, the district court denied Graco's claim for a declaratory judgment and Graco's motion to permanently enjoin enforcement of the Ordinance. The district court determined that the Ordinance does not conflict with, and is not impliedly preempted by, MFLSA. On April 5, 2018, the district court entered judgment on its second amended order. Graco appealed to this court and petitioned the supreme court for accelerated review, which the supreme court denied.

ISSUES

I. Does the Minneapolis Municipal Minimum Wage Ordinance impermissibly conflict with the Minnesota Fair Labor Standards Act?
II. Does the Minnesota Fair Labor Standards Act impliedly preempt the Minneapolis Municipal Minimum Wage Ordinance?

ANALYSIS

The City of Minneapolis is a home-rule-charter city. As such, the city has, in municipal matters, "all the legislative power possessed by the legislature of the state, save as such power is expressly or impliedly withheld." Bolen v. Glass , 755 N.W.2d 1, 4-5 (Minn. 2008) (quotation omitted). Despite this broad power to legislate in regard to municipal affairs, "state law may limit the power of a city to act in a particular area." City of Morris v. Sax Invs., Inc. , 749 N.W.2d 1, 6 (Minn. 2008). "Cities have no power to regulate in a manner that conflicts with state law or invades subjects that have been preempted by state law." Jennissen v. City of Bloomington , 913 N.W.2d 456, 459 (Minn. 2018).

When evaluating whether state law preempts a municipal ordinance, we consider whether: (1) "the legislature expressly declared that state law shall prevail over" the ordinance (express preemption), (2) the ordinance "conflicts with state law" (conflict preemption), and (3) "the [l]egislature has comprehensively addressed the subject matter such that state law now occupies the field" (implied preemption). Bicking v. City of Minneapolis , 891 N.W.2d 304, 313 n.8 (Minn. 2017). The parties agree that express preemption is inapplicable in this case.

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Bluebook (online)
925 N.W.2d 262, Counsel Stack Legal Research, https://law.counselstack.com/opinion/graco-inc-v-city-of-minneapolis-minnctapp-2019.