Manufacturer Seeks to Stop Vote on Wage Hike

MINNEAPOLIS (CN) — A Minnesota manufacturing company claims in court that a proposed minimum-wage increase that would only apply to the city of Minneapolis is at odds with state law.

Graco Inc., a fluid-handling equipment manufacturer with facilities worldwide, says it wants to "prevent Minneapolis voters from being invited to amend the Minneapolis Charter to include a charter amendment that is contrary to state law."

A group of citizens petitioned to get the $15 minimum-wage initiative on the ballot for a vote after the Minneapolis City Council declined to do so.

But according to a lawsuit filed Friday in Hennepin County, a minimum-wage increase in only the city "conflicts with and is also at least impliedly pre-empted by Minnesota law."

A company could be following state law by paying the lower minimum wage, while at the same time breaking Minneapolis law, Graco claims.

The city has its own lawsuit pending to stop the amendment from reaching the ballot, but for different reasons than Graco's.

Casper Hill, a spokesperson for Minneapolis, says the city maintains it has a right to increase the minimum wage in its municipality, but it is "not something that should go before the voters."

A Hennepin County judge ruled last week that the amendment can be included on the ballot. The city appealed to the Minnesota Supreme Court, arguing that wages should be regulated by city ordinance and not a charter amendment.

Graco's attorney, Christopher Larus of Robins Kaplan LLP, says the city made a "strategic political" move by not mentioning state law in its lawsuit, as some city council members agree with the hike but don't want a vote to bypass them.

Graco has three manufacturing facilities in Minnesota, including its headquarters in Minneapolis, and employs 3,300 workers worldwide. According to the complaint, almost half of them work in Minnesota.

Charlotte Boyd, a spokesperson for Graco, says the company's employees can switch between facilities in the state, and would make a different wage at each of them if the amendment were to pass.

The minimum-wage amendment "threatens to create an unworkable patchwork of municipal requirements" that would be a burden on businesses and would discourage investment in the state, Graco claims in the lawsuit.

If the minimum wage changed in other cities as well, Boyd said, companies could "run into eight different cities with eight different rules" they would have to follow.

Graco believes employment laws should be statewide, and says in its complaint that state lawmakers "constructed a set of minimum wage standards that carefully balance the interest of diverse parties across the state."

Boyd said that "employers and employees need the flexibility to meet their own needs."

"Mandates such as these lead us down a slippery slope," Boyd said, adding that the amendment could set a precedent for more uneven changes throughout the state. "It's hard for businesses to make long-term decisions in an environment like that."

The current minimum wage in Minnesota, which just increased on Aug. 1, is $9.50 per hour for companies with annual gross revenue over $500,000 and $7.75 per hour for smaller companies, minors and trainees under 20 years old.

The group fighting for the $15 minimum wage in Minneapolis says it is needed to keep up with the city's cost of living.

The Minneapolis City Attorney's Office declined to comment on Graco's lawsuit.

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