Hennepin County District Court File No. 27-CV-17-17198
Christopher K. Larus, George B. Ashenmacher, Robins Kaplan
LLP, Minneapolis, Minnesota (for appellant)
L. Segal, Minneapolis City Attorney, Sara J. Lathrop, Sarah
C.S. McLaren, Assistant City Attorneys, Minneapolis,
Minnesota (for respondent)
L. Naughton, League of Minnesota Cities, St. Paul, Minnesota
(for amicus curiae League of Minnesota Cities)
D. Nestor, De León & Nestor, LLC, Minneapolis,
Minnesota; and Laura Huizar (pro hac vice), Washington,
District of Columbia (for amici curiae Centro de Trabajadores
Unidos en la Lucha, 15 Now Minnesota, and National Employment
Considered and decided by Worke, Presiding Judge; Johnson,
Judge; and Bjorkman, Judge.
municipal ordinance does not conflict with, and is not
impliedly preempted by, the Minnesota Fair Labor Standards
Act (MFLSA), Minn. Stat. §§ 177.21-.35 (2018),
merely by setting a higher minimum wage than that required by
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.
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
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 that 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
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). 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
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). The Ordinance applies to time worked
within the geographic boundaries of Minneapolis. MCO §
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 granted. 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.
the Minneapolis Municipal Minimum Wage Ordinance
impermissibly conflict with the Minnesota Fair Labor
Does the Minnesota Fair Labor Standards Act impliedly preempt
the Minneapolis Municipal Minimum Wage Ordinance?
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).
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. Graco contends that the Ordinance impermissibly
conflicts with MFLSA and that MFLSA impliedly preempts the
Ordinance. Whether state law preempts a municipal ordinance
is a question of law, which we review de novo. Id.
argues that the Ordinance conflicts with MFLSA because the
Ordinance forbids what MFLSA expressly permits and adds
requirements absent from MFLSA. Graco's
conflict-preemption claim rests squarely on the premise that
MFLSA sets both a floor and a ceiling, thereby prohibiting
municipalities from establishing a wage rate in excess of the
state minimum wage. We are not persuaded.
Mangold Midwest Co. v. Village of Richfield, the
supreme court considered whether a municipal ordinance that
prohibited businesses, except those with four or fewer
employees, from selling groceries on Sunday impermissibly
conflicted with a state law prohibiting the sale of groceries
on Sunday. 143 N.W.2d 813, 818 (Minn. 1966). The supreme
court identified four "general principles" that
guide conflict-preemption analysis. Id. at 816-17.
First, "[a]s a general rule, conflicts which would
render an ordinance invalid exist only when both the
ordinance and the statute contain express or implied terms
that are irreconcilable with each other." Id.
at 816. Second, "it has been said that conflict exists
where the ordinance permits what the statute forbids."
Id. Third, "a conflict exists where the
ordinance forbids what the statute expressly
permits." Id. at 816. And finally, "[i]t
is generally said that no conflict exists where the
ordinance, though different, is merely additional and
complementary to or in aid and furtherance of the
statute." Id. at 817.
the state law in Mangold prohibited particular acts,
the supreme court focused on the second principle: whether
the municipal ordinance permitted conduct prohibited under
state law. See id. at 817-19. The court rejected the
argument that the ordinance permitted what state law
prohibited, concluding that the ordinance did not
"specifically authorize" any grocery sales on
Sunday. Id. at 818-19. Rather, the court deemed the
ordinance a "complementary regulation which simply fails
to make sales of groceries by certain establishments an
additional offense under the ordinance." Id. at
819. Ultimately, the Mangold court concluded that
the statute and ordinance were not irreconcilable because
"the ordinance does not permit, authorize, or encourage
violation of the statute." Id. at 819.
apply the Mangold principles, we must first
determine whether MFLSA prohibits or permits particular acts.
Graco contends that MFLSA "expressly authorizes
employers to pay the minimum wage rates set forth in the
[statute]." We disagree. MFLSA provides that employers
"must pay each employee at least"
the minimum wage. Minn. Stat. § 177.24, subd. 1(b)
(emphasis added). Thus, MFLSA is a prohibitive statute rather
than a permissive one; it prohibits an employer from paying
less than the legislatively set minimum wage.
Nothing in MFLSA "specifically authorizes" an
employer to pay no more than the statutory minimum wage.
See Mangold, 143 N.W.2d at 818-19 (noting ordinance
that failed to prohibit small businesses from selling
groceries on Sunday contained no "specific
authorization" of Sunday sales). The stated purposes of
MFLSA, including "to establish minimum wage and overtime
compensation standards that maintain workers' health,
efficiency, and general well-being," Minn. Stat. §
177.22, demonstrate that the statute does not permit
an employer to pay the minimum wage, but rather
prohibits an employer from paying less than the
MFLSA prohibits certain conduct, the second Mangold
conflict-preemption principle is relevant to our analysis.
Our inquiry under the second principle is easily resolved
because it is undisputed that the Ordinance does not permit
employers to pay lower wage rates than required by MFLSA.