The Minnesota Attorney General reached a civil settlement with MN Fundraising Initiative (MNFI), a sham charity that misclassified hundreds of concession stand workers as 'volunteers' while paying them 'grants' in exchange for their labor. The scheme violated Minnesota nonprofit corporation laws, the Minnesota Fair Labor Standards Act, and misclassification statutes. Under the settlement, MNFI must dissolve and file for Chapter 7 bankruptcy.
MNFI must wind up remaining affairs and dissolve, provide regular updates to the AGO, and has voted to file for Chapter 7 bankruptcy.
In-house legal teams should review vendor agreements with staffing agencies and nonprofits to ensure proper worker classification. Key clauses to examine include those defining employee vs. independent contractor vs. volunteer status, compliance with wage and hour laws, indemnification for misclassification claims, and any provisions that exchange labor for donations or grants. Additionally, contracts with for-profit concession operators should be audited to ensure they are not indirectly benefiting from misclassification through 'donations' tied to labor provided.
Entity
MN Fundraising Initiative
Industry
Other"MN Fundraising Initiative (“MNFI”)"
"systematic and unlawful misclassification of its workers as “volunteers,” rather than employees"
"Minnesota Fair Labor Standards Act"
"Minn. Stat. § 177.23"
"Minn. R. 5200.0230"
"MNFI must wind up any remaining affairs and dissolve"
Minnesota Attorney General Keith Ellison issued a consumer alert explaining how veterans, their families, and others who believe Trajector Holdings owes them money can file claims in the company’s Chapter 11 bankruptcy. The release announces no privacy violation, enforcement penalty, or remedy against the company.
Minnesota and 39 other attorneys general filed a notice in Character Technologies, Inc.’s bankruptcy proceedings raising concerns about the company’s safety and privacy practices and the sensitive information it holds, including children’s private chatbot conversations. The states seek protections for consumers in any sale or transfer of the business or assets; the filing does not impose a penalty or establish a final remedy.
The Minnesota Attorney General filed an Assurance of Discontinuance requiring Auto Tech Donations, Inc. to dissolve after finding that its solicitations and governance did not comply with state requirements. Its president was banned from forming or serving as an officer or director of nonprofits and must provide restitution to donors whose vehicles he resold for personal benefit.
Minnesota Attorney General Keith Ellison and a coalition of 26 states, counties, and cities filed a lawsuit challenging NHTSA’s rule weakening fuel-economy standards for new cars and light trucks. The coalition alleges the rule violates the Administrative Procedure Act and the Energy Policy and Conservation Act; the press release describes a lawsuit filing, not a monetary penalty or final judgment.
$35.0M
Minnesota, the FTC, and a bipartisan coalition of state attorneys general reached a proposed settlement with Corteva over alleged loyalty programs that restricted pesticide distributors from buying lower-cost generic products. Corteva must end the challenged practices, comply with restrictions for 10 years, and pay $35 million to the state plaintiffs, including $1.25 million to Minnesota.
A federal court granted summary judgment to Minnesota AG Keith Ellison and a coalition of 22 attorneys general in their lawsuit challenging the CFPB Acting Director’s decision not to seek funding. The court held the refusal unlawful and required the current Acting Director to request necessary funding so the CFPB can continue operating.