Madison Equities Must Provide Payroll Records in Security Guard Overtime Dispute – Twin Cities
The Minnesota Supreme Court issued an opinion earlier this week that will allow the Minnesota attorney general’s investigation into alleged wage theft at Madison Equities – the largest real estate owner in downtown St. Paul – to go forward.
Security guards at the US Bank Center, First National Bank Building, 375 Jackson St. and four other downtown properties alleged they were not paid the overtime hour and a half rate when they worked in several places. Instead, during 16-hour shifts, they would have been ordered to clock in from one building to another, as if starting a new shift for another employer.
The complaints sparked an investigation by Minnesota Attorney General Keith Ellison’s office in August 2019. After interviewing at least six current or former security officers, the office’s salary theft division launched a civil investigation into whether Overtime practices violated federal and state laws, but the employer refused to comply with requests for relevant information and did not turn over employee payroll records.
Instead, Madison Equities responded to the Attorney General’s request for a civil investigation at the time by calling it too broad and filing a motion for a protection order, which sought to quash it.
Kelly Hadac, attorney for Madison Equities, said in a 2019 filing that her client owns property through 30 or 40 separate legal entities, or limited liability companies, none of which can be considered a co-employer. Handing over records from all entities would take hundreds of hours of work, he said, and noted that Ellison’s office had requested records for maintenance workers and “workers.” generally, although no maintenance worker complained about overtime pay.
A Ramsey County District Court judge supported the Attorney General’s investigation in its entirety, but Madison Equities has appealed the decision. The Minnesota Court of Appeals then limited the investigation to four specific legal entities named in complaints received by Ellison’s office – Madison Equities, First Bank Building LLC, US Bank Center LLC and Alliance Center LLC. The court also limited the investigation to security guards, cutting off the investigation of maintenance workers or other hourly workers.
The attorney general’s office then asked the state’s Supreme Court to reconsider the appeals court’s decision, arguing that it effectively provided prospective employers with some sort of roadmap to avoid reviewing a potentially illegal behavior.
Citing the Attorney General’s “investigative mandate”, Chief Justice Lorie Gildea issued an opinion on behalf of the court ordering Madison Equities and 10 subsidiaries previously appointed by the district court to respond to the request and provide information to all hourly workers.
The company has 15 days to comply. The state’s highest court returned the case to Ramsey County District Court for further findings regarding the remaining subsidiaries.
“Minnesota laws grant my office clear and broad power to investigate violations of state law in business, commerce and commerce,” Ellison said in a written statement. “Minnesota laws also give my office the power to investigate and prosecute cases of wage theft. These laws help us help people pay for their lives and live with dignity, security and respect. “
An appeal to a lawyer representing Madison Equities was not immediately referred Thursday.
In November 2019, Madison Equities sued Service Employees International Union Local 26 and SEIU Minnesota State Council in Ramsey County District Court, alleging libel for posting outside notices accusing the company of salary theft. A jury trial is tentatively scheduled for September 2022.