State of Minnesota Office of the Attorney General, Appellant,

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A24-0107

State of Minnesota Office of the Attorney General,
Appellant,

vs.

Madison Equities, Inc.,
Respondent.

Filed September 23, 2024
Affirmed in part, reversed in part, and remanded
Segal, Chief Judge

Ramsey County District Court
File No. 62-CV-23-3084

Keith Ellison, Attorney General, Jessica Whitney, Deputy Attorney General, Rebecca K.
Webster, Jason Pleggenkuhle, Assistant Attorneys General, St. Paul, Minnesota (for
appellant)

Kelly S. Hadac, Hadac Law Office PLLC, Rosemount, Minnesota (for respondent)

Considered and decided by Johnson, Presiding Judge; Segal , Chief Judge; and
Halbrooks, Judge.
∗

∗ Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.
2
NONPRECEDENTIAL OPINION
SEGAL, Chief Judge
Appellant State of Minnesota Office of the Attorney General (AG) appeals the
dismissal of its lawsuit against respondent Madison Equities, Inc. , under rule 12 of the
Minnesota Rules of Civil Procedure. The AG’s complaint contains two counts alleging,
first, a violation of the overtime provisions of the Minnesota Fair Labor Standards Act
(MFLSA), Minn. Stat. §§ 177.21-.35 (2022); and, second, retaliation in violation of the
Minnesota whistleblower statute, Minn. Stat. § 181.932 (Supp. 2023 ).1 The district court
dismissed the MFLSA claim as time-barred and the whistleblower retaliation claim for
failure to state a claim upon which relief can be granted.
The AG argues on appeal that the running of the statute of limitations for its MFLSA
claim was tolled by Madison Equities’ litigation seeking to quash the AG’s civil
investigative demand (CID). The AG issued the CID, pursuant to Minn. Stat. § 8.31
(2022), to investigate potential wage-hour violations by Madison Equities. 2 The AG
argues, in the alternative, that the MFLSA claim is timely because it is governed by the
six-year limitations period under Minn. Stat. § 541.05 (2022) , not the two-year or three-

1 Minn. Stat. § 181.932 was amended in 2023, but the amendments did not modify
provisions relevant to this appeal. 2023 ch. 53, art. 11, § 26, at 1290-91.

2 Minnesota Statutes section 8.31 authorizes the attorney general to issue investigative
demands when the attorney general “has information providing a reasonable ground to
believe that any person has violated, or is about to violate, any of the laws of this state . . .
respecting unfair, discriminatory, or other unlawful practices in business, commerce, or
trade.” Minn. Stat. § 8.31, subd. 2.

3
year limitations period for wage-hour violations under Minn. Stat. § 541.07(5) (2022).3 As
to its whistleblower retaliation claim, the AG argues that the district court erred in ruling
that acts by former employees are excluded from the protections of the whistleblower
statute.
Despite valid policy reasons put forward by the AG in favor of tolling, we affirm
the dismissal of the AG ’s MFLSA claim as time-barred because of a lack of Minnesota
caselaw that has applied tolling in this type of circumstance. But we reverse the dismissal
of the AG’s whistleblower retaliation claim and remand the case to the district court
because the district court erred in its determination that the protections of the whistleblower
statute do not extend to former employees.
FACTS
The involvement of the AG in this dispute began when, between August and
October 2019, the AG received complaints from three individuals who were currently or
formerly employed as security guards by Madison Equities.
4 Madison Equities is a private
real estate company that owns, manages, and leases residential and business properties in
downtown St. Paul through a number of closely held subsidiaries.

3 Under section 541.07(5), a two-year statute of limitations governs actions seeking to
recover “wages or overtime or damages, fees, or penalties accruing under any federal or
state law respecting the payment of wages or overtime or damages, fees, or penalties,
except . . . if the nonpayment is willful and not the result of mistake or inadvertence, the
limitation is three years.” Minn. Stat. § 541.07(5).

4 The background facts set out in this section are taken from the allegations in the
complaint, which we must accept as true in reviewing a dismissal under Minn. R. Civ.
P. 12. Halva v. Minn. State Colls. & Univs., 953 N.W.2d 496, 500 (Minn. 2021).
4
The first individual to bring forward a complaint about Madison Equities’ overtime-
pay practices was C.L., a former security guard. In August 2019, C.L. reported to the AG,
as alleged in the complaint, “that after he reached the threshold of 40 hours working at the
First National Bank Building, he continued to work for Madison Equities at different
properties but received payments from either Alliance Center LLC or Madison Equities,
Inc.” C.L. “provided the AG[] with an employee notice, paychecks, and paystubs that he
received from Madison Equities for work he performed as a security guard.” Two more
employees came forward with similar allegations about working overtime, receiving
straight-time pay from different companies, and not being paid the overtime rate of time-
and-a-half.
In October 2019, after receiving these three reports, the AG issued a CID to Madison
Equities and nine subsidiaries associated with seven properties where security guards
worked.5 Instead of producing any of the information requested in the CID, Madison
Equities moved for a protective order, seeking to quash the CID in its entirety. The AG
filed a cross-motion to compel enforcement. The district court denied the protective order
and granted the AG’s motion to compel in a February 2020 order. Madison Equities
appealed the order and sought a stay from the district court. The district court denied the
motion for a stay.

5 In October and November 2019, after the AG had issued the CID, the AG received three
more reports from former or current security guards alleging similar overtime-pay
violations.
5
This court affirmed the denial of the motion to quash, but limited the scope of the
CID so that Madison Equities would be required to provide information related only to
Madison Equities and three closely held subsidiaries that paid wages to security guards.
Madison Equities, Inc. v. Off. Att’y Gen., No. A20-0434, 2021 WL 79337, at *3-4 (Minn.
App. Jan. 11, 2021), rev’d, 967 N.W.2d 667 (Minn. Dec. 22, 2021). The AG filed a petition
for review of the portion of this court’s decision limiting the scope of the CID. Madison
Equities did not cross- petition for review. After the supreme court accepted review, the
AG requested that Madison Equities respond to the portion of the CID that was not at issue
before the supreme court. Madison Equities then moved once again for a stay of the orders
compelling enforcement of the CID, which the district court granted in August 2021.
In December 2021, the supreme court ruled largely in the AG’s favor in the CID
litigation, ordering Madison Equities to produce the requested information as to all hourly
employees, limiting the scope of the CID to exclude only non-hourly employees. The
supreme court also remanded the case to the district court to resolve several remaining
issues concerning the AG’s request for information on Madison Equities’ subsidiaries.
Madison Equities, 967 N.W.2d at 670-76.
On remand, the dist rict court ordered Madison Equities to disclose information on
its subsidiaries. The last set of responsive information provided by Madison Equities was
produced to the AG in July 2022. 6 Judgment was entered in favor of the AG in the CID
litigation in April 2023.

6 The AG alleges in the complaint that Madison Equities’ responses to the CID remained
deficient even after this last tranche of information was provided. The complaint, however,
6
The AG commenced this action against Madison Equities on June 5, 2023, alleging
two counts. The first count asserted a claim for a violation of the MFLSA. The AG alleged
that, “[b]ased on the records provided by Madison Equities at the order of the Minnesota
Supreme Court, Madison Equities failed to pay at least 27 workers at least $29,843 in
overtime premiums .” The second count alleged that Madison Equities violated the
whistleblower statute by bringing a retaliatory defamation suit against C.L., the first
employee to report the alleged overtime violation. In the defamation suit, Madison Equities
alleged that C.L. had published false allegations, in a flyer C.L. distributed in partnership
with a labor union, that Madison Equities had engaged in wage theft.7
Madison Equities responded to the AG’s complaint with a motion to dismiss under
Minn. R. Civ. P. 12.02(e). It argued that the statute of limitations applicable to wage claims
under Minn. Stat. § 541.07(5) had run, and that the whistleblower retaliation count failed
to state a claim upon which relief could be granted. The AG opposed the motion, arguing
that the statute of limitations was tolled by the CID litigation and that the whistleblower
statute covered claims for retaliation against former employees.
The district court granted Madison Equities’ motion to dismiss. It rejected the AG’s
tolling argument, stating:

does not indicate that Madison Equities produced any additional information before the
AG commenced this suit.

7 The district court in the defamation case granted summary judgment in favor of C.L. We
affirmed the summary-judgment dismissal of Madison Equities’ suit because the
undisputed evidence demonstrated that C.L.’s statements were true or substantially true.
Madison Equities, Inc. v. SEIU MN State Council, No. A22-1588, 2023 WL 4699770, at
*7 (Minn. App. July 24, 2023), rev. denied (Minn. Oct. 17, 2023).
7
The Court is not persuaded that the CID litigation involved the
type of “paramount authority” preventing [the AG] from
starting this lawsuit within the statute of limitations. Indeed,
the pendency of the CID litigation did not prevent [the AG ]
from commencing this lawsuit within the limitations period.
As a result, the Court cannot conclude that the CID litigation
tolled the statute of limitations.

The district court found, and the AG does not contest, that the AG’s cause of action under
the MFLSA accrued in 2019 “at the latest” when the six current and former Madison
Equities employees brought their complaints to the AG. The district court determined that
the CID litigation did not prevent the AG from bringing suit earlier. In reaching this
determination, the district court relied on a representation outside the complaint that the
AG had “‘specific and credible allegations that overtime laws have been violated’ and that
the [AG] knew how the violations occurred.”
8 The AG apparently made the statement to
the district court in the CID litigation.
The district court dismissed the AG’s whistleblower retaliation count on the ground
that it failed to state a claim because the alleged retaliatory action—the defamation suit—
was commenced by Madison Equities against C.L. only after C.L. had left his employment
with Madison Equities. The district court explained that “the filing of the lawsuit
necessarily had nothing to do with penalizing [C.L.] regarding his compensation, terms,
conditions, location or privileges ‘of employment’ as is required by the plain language of

8 Madison Equities asked the district court to take judicial notice of this statement in its
reply brief in support of its rule 12 motion. The AG argued in its brief to the district court
opposing the rule 12 motion, and repeats in its brief to this court, that Madison Equities
took the opposite position throughout the CID litigation—that the AG had no reasonable
basis to believe that Madison Equities had violated any of the wage-hour laws.
8
[the whistleblower statute] because there was no such ‘employment’ at the time the
defamation lawsuit was filed.”
DECISION
When reviewing the dismissal of a complaint under rule 12, we must “accept the
facts alleged in the complaint as true and construe all reasonable inferences in favor of the
nonmoving party.” Walsh v. U.S. Bank, N.A., 851 N.W.2d 598, 606 (Minn. 2014). A
“pleading will be dismissed [at the outset of litigation under rule 12] only if it appears to a
certainty that no facts, which could be introduced consistent with the pleading, exist which
would support granting the relief demanded.” Halva, 953 N.W.2d at 501 (quotation
omitted). We review de novo the appeal of the dismissal of a complaint under rule 12.
Engstrom v. Whitebirch, Inc., 931 N.W.2d 786, 790 (Minn. 2019).
In our analysis, we address first the AG’s arguments for reversal of the dismissal of
its MFLSA claim and then address the whistleblower retaliation claim.
I. The district court did not err in determining the AG’s MFLSA claim was time-
barred pursuant to Minn. Stat. § 541.07(5).

The AG asserts that the district court erred in dismissing its MFLSA claim as time-
barred. The AG maintains that the CID litigation and the consequent delay in obtaining
responsive information from Madison Equities served to toll the running of the statute of
limitations. The AG argues, in the alternative, that the applicable limitations period for its
claims is the six-year period provided under Minn. Stat. § 541.05, not the two- or three-
year period under section 541.07(5). We review the application and statutory interpretation
9
of a statute of limitations de novo. City Bella Com., L.L.C. v. City Bella on Lyndale, 994
N.W.2d 27, 30-31 (Minn. 2023).
A. The district court did not err in rejecting the AG’s tolling argument.

The AG argues that it is entitled to tolling under two different theories.9 The first
theory, identified by the AG as “pendency tolling,” refers to cases where the
“[c]ommencement of an action tolls the statute of limitations during the action’s pendency
so long as the action is prosecuted to final judgment.” Sherek v. Indep. Sch. Dist. No. 699,
464 N.W.2d 582, 584 (Minn. App. 1990), rev. denied (Minn. Feb. 20, 1991). The second
theory, equitable tolling, involves situations where a plaintiff is prevented from timely
filing an action because of circumstances beyond the plaintiff’s control. Equitable tolling
has been found applicable “when a party showed that he was prevented . . . by some
‘paramount authority’ or by situations arising out of ‘invincible necessity’” from
commencing suit.10 Sanchez v. State, 816 N.W.2d 550, 561 (Minn. 2012) (quoting St. Paul,
Minneapolis & Manitoba Ry. Co. v. Olson, 91 N.W. 294, 296 (Minn. 1902)). 11
We discuss the applicability of both theories below.

9 The tolling theories argued by the AG are based on judicially created exceptions to the
statute of limitations, independent of the types of tolling provided in the Minnesota
Statutes, such as those outlined in Minn. Stat. § 541.15 (2022).

10 Equitable tolling also applies when, “but for the fraudulent concealment of the cause of
action by the defendant, the diligent plaintiff would have known that she had a cause of
action.” Sanchez, 816 N.W.2d at 561. The AG does not invoke fraudulent concealment
as a ground for tolling in this action.

11 While Sanchez is a criminal case arising out of the application of equitable tolling in the
context of a petition for postconviction relief, it provides a broad overview of Minnesota
law on equitable tolling, relying on numerous civil cases. 816 N.W.2d at 560-62.
10
Tolling Based on the Pendency of the CID Litigation
The AG argues that the statute of limitations was tolled by the pendency of the CID
litigation. It contends that Madison Equities’ refusal to comply with any part of the CID
interfered with the AG’s ability to investigate whether it should bring suit on the MFLSA
claim. The AG notes that it is only authorized to initiate a suit under section 8.31 “[o]n
becoming satisfied that . . . [a law] has been or is being violated, or is about to be violated.”
Minn. Stat. § 8.31, subd 3. It argues that Madison Equities’ refusal to provide any of the
data requested in the CID, despite the fact that the district court and appellate courts all
affirmed the propriety of the CID at least in large measure, prevented the AG from
obtaining the information it deemed necessary to satisfy its statutory obligation of
“becoming satisfied” that Madison Equities was violating the wage-hour laws.12
The AG points to its special role as “the chief law enforcement officer of Minnesota”
and argues that the CID process outlined in section 8.31 effectuates the state’s “public
policy to proceed in the ‘best and fairest manner,’ allowing the State to conserve
enforcement resources and disincentivizes a race to the courthouse on unsubstantiated
complaints.” See Kohn v. State by Humphrey, 336 N.W.2d 292, 296 (Minn. 1983)
(“Experience has indicated that the precomplaint investigative procedure . . . is often the
best and fairest manner in which to proceed.”).

12 As noted in the facts section above, even though no stay of the district court’s order
enforcing the CID was in place until August 2021, Madison Equities produced no
information between the date the CID was issued in October 2019 and the date the supreme
court issued its opinion in the CID litigation some three years later.
11
While there are valid and logical policy reasons for applying tolling when delay is
caused by a largely unsuccessful challenge to a CID, we are confronted with limited
caselaw. The few cases that discuss this type of tolling do no more than summarily state
that the pendency of a case can toll the statute of limitations when the case is prosecuted
through final judgment. See, e.g., Holmgren v. Isaacson, 116 N.W. 205, 206 (Minn. 1908);
Sherek, 464 N.W.2d at 584. The cases provide no guidance as to the types of litigation the
pendency of which would warrant the application of this type of tolling.
Moreover, we observe that, in the cases where this type of tolling has been
considered, the “pending” litigation involved resolution of an issue that went to the merits
of the later litigation. For example, in Sherek, the “pending” litigation involved a teacher’s
right to reinstatement after being placed on unrequested leave; this court found that the
statute of limitations of the teacher’s subsequent suit to be reinstated to a full-time—rather
than part-time—position was tolled by the pendency of the prior litigation that generally
determined he had a right to reinstatement and was litigated through final judgment. 464
N.W.2d at 583-84.
Holmgren, which appears to be the first Minnesota case referencing this type of
tolling, involved a claim that the pendency of a quiet title action should toll the running of
the 15-year period necessary for an adverse- possession claim. 116 N.W. at 206. The
supreme court rejected the tolling argument in that case because the quiet title action was
not litigated through final judgment but did not reject the potential applicability of the
theory. Id. And in a subsequent nonprecedential opinion, this court, in fact, tolled the
running of the 15-year period for adverse possession when there had been a prior quiet title
12
action that was litigated through final judgment. See Osgood v. Stanton, No. A08-1211,
2009 WL 1586943, at *5 (Minn. App. June 9, 2009) (holding that the period of adverse
possession was tolled by a quiet title action that was pursued through final judgment).
Here, the CID litigation was prosecuted through final judgment, but that litigation
concerned the AG’s right to obtain investigative data from Madison Equities, not the AG’s
subsequent MFLSA claim. And while there is overlap between the two actions, the CID
litigation did not determine that Madison Equities violated the MFLSA, just that the AG
had a reasonable basis to suspect a violation. The application of this type of tolling here
would thus involve an expansion of the types of circumstances where such tolling has been
applied or considered in the past.
In addition, far from taking an expansive view of tolling, the supreme court has
stressed that “the standard . . . used to toll statutes of limitations is necessarily a high one.”
Sanchez, 816 N.W.2d at 561. Given the paucity of caselaw concerning this type of tolling
and the high bar the supreme court has set for the applicability of tolling, we decline to
apply this type of tolling here. This is a task better left to the supreme court or the
legislature.
Equitable Tolling
The AG next argues the applicability of equitable tolling. Equitable tolling “allows
a court to consider the merits of a claim when it would otherwise be barred by a statute of
limitations.” Id. at 560. The supreme court has determined that equitable tolling is justified
when a plaintiff show s they were prevented from timely commencing suit by some
“paramount authority” or by situations arising out of “invincible necessity.” Id. at 561
13
(quotation omitted). The plaintiff’s due diligence in pursuing the challenged claim is
generally relevant in assessing equitable- tolling arguments. See Jones v. Consol.
Freightways Corp., 364 N.W.2d 426, 429 (Minn. App. 1985) (stating plaintiff’s “innocent
inadvertence” was insufficient to justify equitable tolling of statute of limitations).
The AG argues that it timely pursued the CID but was prevented from commencing
suit because of Madison Equities’ refusal to comply with the CID. We agree that the AG
promptly pursued its investigation of the employee reports, issuing the CID within weeks
of its receipt of the first three complaints. And, even though there was no stay in place in
the CID litigation until August 2021, Madison Equities failed to comply with the district
court’s order to compel and did not provide any responsive information until February
2022, after it was ordered to do so in the supreme court’s opinion in the CID litigation. 13
Madison Equities, 967 N.W.2d at 676. We also note that the AG commenced this suit
within weeks of the entry of judgment in the CID litigation. But the AG fails to explain
why it delayed commencing this suit until June 2023 when, according to its complaint in
this action, the AG received the last set of responsive information from Madison Equities
in July 2022, more than ten months earlier.
The AG argues in its brief to this court that the issue of whether it was “prevented”
from commencing suit “is a factual finding that is not appropriate at the motion to dismiss
stage,” citing Hansen v. U.S. Bank Nat’l Ass’n, 934 N.W.2d 319, 326 (Minn. 2019). The

13 There was an 18-month span of time between the date the district court issued its order
compelling enforcement of the CID on February 11, 2020, and the date the stay was issued
on August 23, 2021.
14
AG, however, fails to identify any specific facts at issue. And, even more importantly, the
AG did not assert that there were any fact issues in its challenge to the rule 12 motion
before the district court. Thus, it appears that the AG has forfeited this argument. See
Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988) (noting the principle that an appellate
court generally will not consider matters not argued to and considered by the district court).
We thus reject equitable tolling as a basis for reversing the dismissal of the AG’s MFLSA
claim.
B. Actions by the AG for violations of the MFLSA are governed by the two-
year and three -year limitations periods in Minn. Stat. § 541.07(5), not
the six-year limitations period in Minn. Stat. § 541.05.

We address next the AG’s alternate argument that the six-year statute of limitations
in section 541.05 governs actions brought by the AG for violations of the MFLSA .
Madison Equities asserts that the AG forfeited this argument because the AG is raising it
for the first time on appeal. But we need not decide whether the argument is forfeited,
because we disagree that section 541.05 would apply to the AG’s MFLSA claim.
The AG argues that section 541.05 is applicable because it is acting under its
authority pursuant to section 8.31, which allows the AG to obtain broader forms of relief
than the MFLSA, such as injunctive relief and civil penalties. While that may be true,
section 8.31 does not create an independent cause of action, it only gives the AG the
authority to pursue relief for violations of other laws as specified in subdivision 1 of section
8.31.
Here, the AG’s claim is one for a violation of “state law respecting the payment of
. . . overtime,” a claim specifically identified in section 541.07(5). See Minn. Stat.
15
§ 541.07(5) (stating that a two- or three-year limitations period applies to actions “for the
recovery of wages or overtime, or damages, fees, or penalties . . . accruing under any
federal or state law”). By contrast, section 541.05 is a more general statute of limitations
that establishes, as relevant here, a six-year limitations period for actions “upon a liability
created by statute.” Minn. Stat. § 541.05, subd. 1(2); see Minn. Stat. § 645.26, subd. 1
(2022) (providing that a more specific statutory provision controls over a general
provision). Moreover, that section contains an exception to the six-year limitations period
“where a shorter period is provided by section 541.07.” Id. And for actions, such as the
AG’s MFLSA claim, section 541.07 does provide a “shorter period” —the two- year and
three-year limitations periods in 541.07(5). Id.
The AG also argues that, even if its claim for unpaid overtime wages is governed
by section 541.07(5), its claims for an injunction and civil penalty under section 8.31
should be governed by the six-year limitations period in section 541.05. But we note that
541.07(5) includes not just claims for wages and overtime payments, but also claims for
“damages, fees, or penalties.” Minn. Stat. § 541.07(5). The only type of relief not
expressly mentioned is injunctive relief. We are not persuaded that there is any logical
argument why a claim for injunctive relief based on an MFLSA violation should be
accorded a longer statute of limitations when the actual claim for a violation of the MFLSA
is time-barred. We thus reject the AG ’s argument that the six-year limitations period in
section 541.05 is applicable to the AG’s MFLSA claim under the circumstances presented
in this case.
16
II. The district court erred in dismissing the AG’s whistleblower retaliation claim
under rule 12 for failure to state a claim upon which relief can be granted.

The AG argues that the district court erred in dismissing its whistleblower retaliation
claim because C.L. had already left employment with Madison Equities when the
statements that formed the basis of the allegedly retaliatory defamation lawsuit were made
by C.L. The AG maintains that the protections of the whistleblower statute are not so
narrow. Because our analysis of this argument involves a question of statutory
interpretation, we apply a de novo standard of review. Christianson v. Henke, 831 N.W.2d
532, 535 (Minn. 2013). And because the claim was dismissed under rule 12, we accept all
allegations in the AG’s complaint as true and resolve all inferences in the AG’s favor.
Halva, 953 N.W.2d at 500.
The Minnesota whistleblower statute outlines retaliatory actions by an employer
that constitute a violation of the statute:
An employer shall not discharge, discipline, penalize, interfere
with, threaten, restrain, coerce, or otherwise retaliate or
discriminate against an employee regarding the employee’s
compensation, terms, conditions, location, or privileges of
employment because . . . the employee, or a person acting on
behalf of an employee, in good faith, reports a violation,
suspected violation, or planned violation of any federal or state
law or common law or rule adopted pursuant to law to an
employer or to any governmental body or law enforcement
official.

Minn. Stat. § 181.932, subd. 1(1) (emphasis added). The district court determined that the
AG’s “lawsuit necessarily had nothing to do with penalizing C.L. regarding his
compensation, terms, conditions, location or privileges ‘of employment’” because C.L. had
already left employment with Madison Equities by the time he made his report to the AG.
17
The district court reasoned that any alleged retaliatory conduct by Madison Equities thus
could not have adversely impacted C.L.’s employment. The district court, however,
ignored the definition of the word “penalize” that was added to the whistleblower statute
by the legislature in 2013.
The definition of “penalize” added by the 2013 amendment makes express reference
to post- termination conduct by an employer: “‘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.” Minn. Stat. § 181.931, subd. 5 (2022) (emphasis added). Under the 2013
amendment, an employer thus “penalizes,” or retaliates against, an employee or former
employee when the employer’s conduct “might dissuade a reasonable employee from
making” a report about a potential violation of law. See Moore v. City of New Brighton,
932 N.W.2d 317, 325 (Minn. App. 2019) (referencing Minn. Stat. § 181.931, subd. 5), rev.
denied (Minn. Oct. 15, 2019).
Madison Equities argues that “all precedential cases that have dealt with
[whistleblower retaliation claims] involved adverse employment actions by an employer
against a current employee.” See, e.g., Lee v. Regents of Univ. of Minn., 672 N.W.2d 366,
375 (Minn. App. 2003); Guercio v. Prod. Automation Corp., 664 N.W.2d 379, 389 (Minn.
App. 2003) (“[T]he whistleblower act only applies to current employees.”). But all of the
cases cited by Madison Equities were all issued before the 2013 amendments. Because the
2013 amendments explicitly recognized that an adverse-employment action can be
18
established based on post-termination conduct, the cases cited by Madison Equities are not
controlling on this issue.
In addition, to the extent that Madison Equities argues that the complaint fails to
state a claim because the defamation suit did not affect C.L.’s compensation or a term or
condition of C.L.’s employment, the AG alleged in its complaint that the defamation suit
was retaliatory, constituted a threat, and subjected C.L. to a deposition and burdensome
discovery, which caused C.L. “stress and emotional distress.” Construing all reasonable
inferences in favor of the nonmoving party, it is a reasonable inference that the defamation
suit was initiated and prosecuted with the intent of dissuading C.L. from pursuing recovery
of overtime pay. The complaint thus alleged an impact on C.L.’s compensation —his
recovery of overtime pay. We thus reverse the dismissal of the second count of the AG’s
complaint and remand this case to the district court for further proceedings consistent with
this opinion.
Affirmed in part, reversed in part, and remanded.