Employers in Minnesota who fail to pay their employees in a timely manner following separation of employment can face several separate claims, especially if an employee is working under an employment contract.  In the case of Buan v. Aatru Medical, LLC, the plaintiff threw the kitchen sink at his employer after it refused to pay what he alleged was his contractual salary.

The plaintiff, Buan, served as Aatru’s Chief Technology Officer for four years, and received his salary continuously during that time.  In January 2022, his salary was increased to $240,000 per year, which was paid monthly.  However, in October 2022, Aatru stopped paying Buan, and only after he complained did they begin paying him at a much lower rate of $684 per week.  Despite the non-payment, Buan continued working for Aatru, but only received $12,000 in wages for the year.  During that time, he also incurred $17,000 in business expenses.

Buan filed a complaint, alleging several claims, including breach of contract, retaliation, conversion, civil theft, and failure to promptly pay wages under Minnesota law.  Aatru moved to dismiss on several of the claims.

Buan’s breach of contract claim was allowed to continue by the court, as Aatru only countered that the employment contract was at-will.  This created a question of fact, which is not something that leads to the dismissal of a claim.  On his breach of contract claim for failure to pay business expenses, the court recognized that his contract did not include a deadline for repayment, but stated when a contract does not establish a payment deadline, “payment is due ‘within a reasonable time.’”

However, regarding the conversion and civil theft claims, the court found that the claims could not continue.  In Minnesota, the tort of conversion is limited to “willful interference with the personal property of another.”  The tort only applies to money in a tangible form that is kept separate from other money.  Civil theft can only occur when an individual steals personal property from another.  The fact that the funds were never paid to Buan made it impossible for Aatru to steal them.

In unique response to Buan’s Fair Labor Standards Act claims, where he alleged the Act was violated due to Aatru’s non-payment of wages, the court stated, “At Buan’s $240,000 salary, he would have to work more than 400 hours per week to dip below Minnesota’s 2023 minimum wage of $10.59 for large employers.  Thus he fails to state a claim under FLSA regardless of whether he was exempt.”  The court held that the remedy for non-payment lies in contract, and not labor law.  That claim was also dismissed.

While this was not the most complicated case, it is interesting to see the variety of approaches employee representatives will use against employers for their failures to pay wages to which employees feel they are entitled.  If you, or your organization need assistance in navigating the separation of an employee, and any wages they may be owed, contact Wiley Reber Law, for legal advice that works.