Attorney General Ellison prevails at Supreme Court in effort to investigate wage theft allegations against downtown Saint Paul’s largest landowner
Madison Equities workers have alleged widespread and purposeful evasion of state and federal overtime laws by company and its subsidiaries
Ruling underscores AG’s broad authority to investigate violations of state law in business, commerce, and trade
December 22, 2021 (SAINT PAUL) – Today, in an opinion that underscores the Attorney General’s broad authority under State law to investigate violations of State law in business, commerce, and trade, the Minnesota Supreme Court ruled that Attorney General Ellison’s office can move forward with its investigation into wage theft allegations against Madison Equities, a large Saint Paul property-management company that owns and operates numerous properties in the Minneapolis–Saint Paul metro area and is the largest landowner in downtown Saint Paul. Madison Equities workers have accused the company of using its subsidiaries to avoid paying them the overtime wages they are owed. The ruling follows Madison Equities’ refusal to respond to the Office’s civil investigative demand (CID) and the Office’s efforts to compel Madison Equities to supply the Office with necessary information to determine whether the wage theft allegations have merit.
“The laws of Minnesota grant my office broad and clear authority to investigate violations of State law in business, commerce, and trade. The laws of Minnesota also grant my office authority to investigate and prosecute cases of wage theft. These laws help us help people afford their lives and live with dignity, safety, and respect,” Attorney General Ellison said. “I am glad the Supreme Court applied its prior precedents in recognizing our authority and allowing us to move forward with this important case.”
The Supreme Court ordered Madison Equities and 10 of its subsidiaries to respond to the Attorney General’s Office’s CID and ordered Madison Equities to provide information for all hourly workers. In doing so, the Court reaffirmed the Attorney General has an “investigative mandate” under the law and “broad and comprehensive authority to investigate” allegations of suspected illegality when the Office has reasonable ground to believe that violations of the law exist. The Court required Madison Equities to respond within 15 days after the entry of judgment. The Court also remanded the matter to the district court for additional findings on whether the Office can discover whether Madison Equities’ larger group of subsidiaries participated in the alleged unlawful practice.
History of Attorney General’s investigation into Madison Equities
The Attorney General first received complaints of wage theft from Madison Equities workers in August 2019. The workers alleged that Madison Equities evaded state and federal overtime laws by paying workers through multiple subsidiaries when they worked more than 40 hours in a week. After receiving those allegations, in October 2019, the Office served a CID on Madison Equities and certain subsidiaries that had reason to believe were involved in the alleged overtime evasion scheme. Madison Equities requested additional time to respond to the CID, which the Office agreed to. However, instead of responding to the CID, Madison Equities moved to quash the investigation and asked the Ramsey County district court to prevent the Office from investigating it in any way. The Office responded by requesting the court to compel Madison Equities to comply with the CID.
The district court agreed with the Attorney General, upholding the CID in its entirety. Madison Equities appealed, and the Minnesota Court of Appeals departed from Minnesota’s longstanding precedent and significantly narrowed the Attorney General’s statutory investigative authority by limiting the Office’s investigation to the specific parameters of the complaints it received. The Attorney General sought and received review of the decision by the Minnesota Supreme Court, arguing that the Court of Appeals wrongly narrowed both the scope of the specific investigation into Madison Equities and also provided future investigatory targets with a roadmap to avoid scrutiny of potentially illegal conduct.
Filing a complaint as a worker
Workers who work at Madison Equities properties or for Madison Equities-linked companies who work more than 40 hours per week but do not receive overtime wages are encouraged to file a report with the Attorney General’s Office, or to call (651) 296-3353 (Metro area) or (800) 657-3787 (Greater Minnesota). All workers can find information about their rights as a worker by visiting the Office’s online publications on wage theft, women’s economic security, and independent contractor misclassification.