March 2019 Updates in Labor and Employment Law

Minneapolis Minimum Wage Ordinance Upheld by Minnesota Court of Appeals

In a decision issued March 4, 2019, the Minnesota Court of Appeals upheld the Minneapolis city ordinance that implemented a higher minimum wage than that provided by state law.   Graco, Inc. v. City of Minneapolis, No. A18-0593, 2019 WL 1008578 (Minn. Ct. App. Mar. 4, 2019).  The ordinance, passed in 2017, sought to gradually increase the minimum wage for employees in Minneapolis to $15 per hour.  Under the ordinance, the current minimum wage for “large” employers (those with more than 100 employees) is $11.25 per hour, while the minimum wage for “small” employers (those with 100 or fewer employees) is $10.25 per hour. 

Graco, Inc. sued the City of Minneapolis, alleging that the Minneapolis ordinance is preempted by the Minnesota Fair Labor Standards Act (“MFLSA”).  The MFLSA sets the state minimum wage based upon gross volume of sales or business.  Under the MFLSA, large employers (defined as an enterprise whose annual gross volume of sales made or business done is not less than $500,000) are required to pay their employees at least $9.86 per hour and small employers (gross volume of sales made or business done less than $500,000 annually) are required to pay their employees at least $8.04 per hour. 

In a divided opinion, the court of appeals upheld the lower court ruling, and decided that the MFLSA does not prevent a city from requiring a higher minimum wage.  It only prohibits paying less.  Therefore, the Minneapolis ordinance and its higher minimum wage rates remain in effect. 

Minnesota Supreme Court Decision May Increase State-Law Disability Discrimination Claims

In Daniel v. City of Minneapolis, the Minnesota Supreme Court overruled longstanding precedent, and decided that the exclusivity provision of the Workers’ Compensation Act does not bar claims under the Minnesota Human Rights Act (“MHRA”) arising out of the same injury.  No. A17-0141, 2019 WL 946364 (Minn. 2019). 

Keith Daniel worked as a firefighter for the City of Minneapolis, and sustained work related injuries, including to his right ankle.  Daniel applied for and received workers’ compensation benefits, including prescription tennis shoes.  He then requested a footwear accommodation, which the department denied due to its uniform policy requiring “station shoes.”  Thereafter, Daniel injured his shoulder at work and the City placed Daniel on light duty.  Daniel then claimed that not being able to wear prescription shoes exacerbated his ankle injuries, and made even the light-duty job fall outside of his physical restrictions, so the City placed him on injury leave.  The parties engaged in discussions to find a shoe that would comply with the department’s uniform policy and Daniel’s prescription, but they never agreed on an acceptable shoe.  The department then told Daniel that if he wished to receive workers’ compensation benefits for his injury and continue his employment, he would have to comply with the uniform policy.  

Daniel filed a disability discrimination lawsuit against the City under the MHRA, alleging that the City discriminated against him by failing to allow him to wear prescription tennis shoes, which was a reasonable accommodation, and that the City retaliated against him for requesting an accommodation.  Thereafter, Daniel settled his workers’ compensation claims, including his ankle injuries. 

The lower courts dismissed Daniel’s claims, stating that the exclusive remedy provision of the Workers’ Compensation Act barred Daniel’s MHRA claims, relying on a 1989 Minnesota Supreme Court case, Karst v. F.C. Hayer Co., 447 N.W.2d 180 (Minn. 1989).  In Karst, the court had held that the Workers’ Compensation Act was the exclusive remedy for claims regarding workplace injuries, based upon the statutory language. 

The Daniel decision overruled Karst, stating that a discrimination claim addresses different issues than workers’ compensation law, “Daniel’s alleged injury under the human rights act arose not from his original ankle injury but from his employer’s alleged discriminatory response to that injury.”  The court recognized that it is possible that damages for a discrimination claim and payments for a workers’ compensation claim could overlap, and that employees still cannot receive double recovery for the same harm.  Nonetheless, the Daniel case may lead to an increase in state-law disability claims.  Accordingly, Daniel serves as a reminder to employers to consider reasonable accommodations for employees that sustain workplace injuries.        

Wage and Hour Issues

Recently, the Federal Department of Labor proposed new overtime rules, with an increase in the salary threshold for exempt employees.  For more information and to help you stay up to date on a broad range of wage and hour issues, please visit: https://www.minnesotawageandhour.com.

If you have questions regarding labor or employment issues, please contact Heather Bredeson (952-921-4624 or hbredeson@seatonlaw.com) or any other attorney at Seaton, Peters & Revnew, P.A.

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