MN Supreme Court Upholds Minneapolis Minimum Wage Ordinance

February 3, 2020

The decision is a win for local decision-making authority in charter cities.

The Minnesota Supreme Court released a decision on Jan. 22 upholding the Minneapolis Minimum Wage Ordinance, which established a municipal minimum wage that is higher than the one state law requires.

The decision was made in the case of Graco, Inc. v. City of Minneapolis, in which Graco challenged the legality of the city’s ordinance.

Case summary

Graco filed a lawsuit, claiming that the ordinance is invalid because it conflicts with a state law and that preemption of such an ordinance is implied in the state law. Graco sought a permanent injunction, prohibiting the City of Minneapolis from enforcing the ordinance.

The district court denied the request for a permanent injunction and dismissed the lawsuit, reasoning that the Minnesota Fair Labor Standards Act (MFLSA) leaves room for municipal regulation because it sets a floor but not a ceiling for minimum wage rates. A divided Minnesota Court of Appeals panel agreed.

The Supreme Court affirmed, ruling that the MFLSA does not preempt municipal authority over minimum wages. In rejecting the claim of conflict preemption, the Supreme Court reasoned that there is no conflict because employers can comply with both the ordinance and the MFLSA.

In rejecting the claim of implied preemption, the Supreme Court reasoned that the MFLSA does not contain clear language expressing a legislative intent to exclude municipal activity.

Two takeaways

1. Opinion applies only to charter cities. It’s important to note that the minimum wage ordinance in Minneapolis was enacted under authority of its charter.

To date, there is no clear authority for a statutory city to enact a minimum wage ordinance. This opinion does, however, pave the way for other charter cities to enact similar minimum wage ordinances.

2. Legislation could change the effect of this court decision. This opinion relies heavily on interpretation of statute as it is currently written.

There was an effort during the 2019 legislative session to explicitly preempt minimum wage ordinances such as this one. While that effort was unsuccessful and appears unlikely to succeed in the near future, charter cities should be aware that legislation could remove this newly confirmed authority.