Minnesota Chamber of Commerce sues Minneapolis over $15 minimum wage

The Minnesota Chamber of Commerce is taking the city of Minneapolis to court over the $15 minimum wage, saying the ordinance conflicts with state law.

In a lawsuit filed in Hennepin County District Court on Friday, the chamber asked the court to issue a temporary injunction freezing the ordinance, then a permanent injunction nullifying it.

"The state has set the minimum wage in Minnesota, and a city does not have the power to set a different minimum wage," said Cam Winton, the chamber's director of labor management policy.

Minneapolis became the first Midwestern city to adopt a $15 minimum wage in June, when the City Council approved an ordinance that phases in the wage hike over several years. Other cities across the country, including Seattle, San Francisco and Washington, D.C., have also adopted a $15 minimum wage, and St. Paul leaders are considering doing the same.

In addition to the Minnesota Chamber, the lawsuit lists the TwinWest Chamber of Commerce, the Minnesota Recruiting and Staffing Association and Graco Inc. as co-plaintiffs.

The chamber also sued the city in 2016, after the City Council passed a mandatory paid sick-leave ordinance. In January, a Hennepin County judge said the city could move forward with the ordinance, but it could only apply it to employers based in the city. The Minnesota Court of Appeals upheld that ruling in September.

Minneapolis City Attorney Susan Segal said the chamber's minimum wage lawsuit echoes its fight against the sick-leave ordinance.

"They have raised the same failed arguments as they raised in their suit challenging the city's Sick and Safe Time Ordinance," Segal said in an e-mail Friday. "We will be vigorously defending against this suit."

The group 15 Now, which spearheaded the minimum wage campaign in Minneapolis, also pledged to fight the chamber's challenge.

"The chamber's lawsuit shows that big business will fight endlessly to defend keeping workers in poverty to protect profits," Ginger Jentzen, former executive director for 15 Now Minnesota, said in a statement. "Minneapolis workers will not only continue to fight and defend [the $15 minimum wage], but will mobilize to win greater gains based on the confidence of building a movement that won."

The chamber and other members of the business community fought Minneapolis' minimum wage ordinance when it was being developed and lamented its approval this summer. The argument at the time, which the chamber reiterated in its lawsuit, was that having minimum wage laws that vary by city would be burdensome for employers.

Minnesota's hourly minimum wage is $9.50 for large employers — those with annual gross revenue of $500,000 a year or more — and $7.75 for small employers. Those rates will rise with inflation in 2018.

In a statement Friday, chamber President Doug Loon said the City Council has overstepped its boundaries by passing the minimum wage and paid sick-leave ordinances.

"Businesses will spend more time understanding and complying with laws and less time innovating, growing and hiring new employees," Loon said. "Both ordinances undermine the market forces and creativity which are making Minnesota jobs among the most desirable in the nation."

Under the Minneapolis ordinance, large businesses — those with 100 or more employees — must phase in the $15 minimum wage by July 1, 2022. Small businesses have until July 1, 2024.

For large businesses, the clock starts ticking Jan. 1, when they'll be required to raise their hourly minimum wage to $10.

Lisa Schmid, a labor and employment attorney at Nilan Johnson Lewis, said she's advising employers she represents to keep an eye on the lawsuit but move forward with implementing the wage increase as planned.

"It's not clear what the court will do with the request, and the deadline to comply is coming up really fast," she said. "It's easier to undo the change at the last minute if the court does go ahead and say, 'Nope, you don't have to do it.' "

Emma Nelson • 612-673-4509