Court upholds minimum wage ordinance in Minneapolis.

Byline: Barbara L. Jones

Minimum-wage workers in Minneapolis no doubt welcomed the Minnesota Supreme Court's opinion last week in Graco Inc. v. City of Minneapolis.

The unanimous court upheld the city's ordinance setting minimum wages higher than the rates set forth in the Minnesota Fair Labor Standards Act, Minn. Stat. 177.24.

That makes it the third court to determine that the statute does not preempt the city ordinance, since the unanimous Supreme Court affirmed the District Court and the Court of Appeals.

"Because employers will comply with the MFLSA when they comply with the City's ordinance, and because the Legislature provided no indication that it intended to occupy the field of minimum-wage rates, we conclude that the MFLSA does not preempt the ordinance," wrote Chief Justice Lorie Gildea for the court.

Wage rates

Wage rates under state law and the city ordinance vary with the size of the employer. In 2019, the state and Minneapolis hourly minimum-wage rates were $9.86 and $12.25, respectively, for large employers, and $8.04 and $11, respectively, for small employers. Under the statute, large employers are those with annual revenue of $500,000 or more. Under the ordinance, large employers are those that employ more than 100 persons.

The appellant sought a declaratory judgment and permanent injunction against the ordinance, which the District Court denied. It determined that the MFLSA sets a floor, not a ceiling, for minimum wage rates and therefor does not conflict with the ordinance. It also said that regulation of minimum-wage rates is not solely a matter of state concern.

A divided Court of Appeals affirmed. The majority also said that the statute sets a floor, not a ceiling, and does not conflict with the ordinance. The majority also concluded that the Legislature did not intend to exclusively regulate the field of minimum-wage rates and the MFLSA accordingly does not preempt the city's regulation of minimum-wage rates.

State preemption

State preemption of municipal authority can be in the form of express preemption, conflict preemption, and field preemption. The parties agree that express preemption is not at issue, but appellant asserted both conflict preemption and field preemption.

Conflict preemption occurs when the ordinance and the statute contain express or implied terms that are irreconcilable with each other, as the Supreme Court set out in 1966 in Mangold Midwest Co. v. Village of Richfield. That case involved an...