The Minnesota Court of Appeals has delivered a mixed decision in a case involving allegations of unpaid overtime pay for former security workers at downtown St. Paul’s largest office buildings, remanding part of the case back to district court.

In 2019, three security guards who had previously worked for Madison Equities alerted the Minnesota Attorney General’s office that they were not being paid time-and-a-half overtime rates, despite logging extra hours. Instead, they said they’d been asked to punch in and out as they circulated from building to building, as if each structure were a separate company.

The company’s holdings at the time included some 18 downtown buildings, including the First National Bank Building, the Lowry Building, the U.S. Bank Center, the Alliance Center, Park Square Court and the Stadium Offices and Ramp.

Concerns about unpaid overtime drew an investigation from the attorney general’s office and then a lawsuit against Madison Equities, filed in Ramsey County District Court in 2023, several years after at least six former security guards shared their concerns. The district court blocked the attorney general’s suit from moving forward, saying the statute of limitations had passed for legal action around wage-hour violations under the Minnesota Fair Labor Standards Act.

The attorney general’s office appealed, saying that the most applicable provision under state law was a six-year statute of limitation, and not the two-year or three-year limitations period cited under another part of the same state statute. The office noted that its case had been slowed by a protective order, filed by Madison Equities, seeking to withhold company payroll data and prevent the case from moving forward, and the court should have taken into account “tolling,” or the time toll taken by the company’s lawsuit, which eventually reached the Minnesota Supreme Court.

Dismissed in part, remanded in part

The Minnesota Court of Appeals issued a non-precedential opinion this week affirming the lower court’s dismissal of the claim of wage-hour violations, finding “a lack of Minnesota caselaw that has applied tolling in this type of circumstance.”

The district court found that a second claim arguing unlawful retaliation under the state’s whistleblower protections had failed to adequately explain how, under state law, relief can be granted to a former employee. Madison Equities had filed a defamation suit against a former security guard who, at the age of 19, made his concerns public by working with a labor union and posting them to a flyer in 2019.

The Court of Appeals, however, chose to reverse the district court’s dismissal of the second claim involving whistleblower retaliation, noting that “the district court erred in its determination that the protections of the whistleblower statute do not extend to former employees.”

The court found that an amendment to state statute, added by the state Legislature in 2013, clarified the definition of the word “penalize” in the statute, making “express reference to post-termination conduct by an employer.” Under the definition, penalize “means conduct that might dissuade a reasonable employee from making or supporting a report, including post-termination conduct by an employer or conduct by an employer for the benefit of a third party.”

That whistleblower portion of the attorney general’s lawsuit will be sent back to Ramsey County District Court for further review. Jim Crockarell, principal of Madison Equities, died in January.

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