Downtown St. Paul's largest property owner is embroiled in a legal dispute with a union that alleged the company used its ownership structure to avoid paying employees overtime.

Madison Equities, which has a portfolio including the First National Bank Building, U.S. Bank Center and Alliance Bank Center, is also fending off an investigation by the Minnesota Attorney General's Office.

The Service Employees International Union (SEIU) Local 26, a union that represents workers including janitors, window washers and security guards, assisted workers with filing complaints that prompted the state action. SEIU released a statement last month and posted fliers saying the company avoided paying thousands of dollars in overtime wages by having security guards submit their hours to separate companies.

Madison Equities says the allegations are false and is suing the SEIU Minnesota State Council, SEIU Local 26 and former security guard Christopher Lewis for defamation. A Nov. 1 complaint says the union and Lewis knowingly published false statements about Madison Equities in an effort to damage the company's business relationships.

"But for SEIU MN's, Local 26's, and Christopher Lewis's publication of False Statements … Madison Equities' business relationships with its employees and tenants would not have suffered interference," the complaint says.

Jim Crockarell, head of Madison Equities, directed comment to attorney Kelly Hadac. "My client looks forward to pursuing its claims through the legal process," Hadac said in an e-mail. "We are confident that Madison Equities, Inc. will prevail."

Madison Equities lists 13 office properties on its website, many of them downtown. Limited liability companies own individual buildings within Madison Equities' portfolio. The First National Bank Building, for example, is owned by First Bank Building LLC; U.S. Bank Center LLC owns the U.S. Bank Center.

On Oct. 14, Local 26 published a news release on its website decrying what it called a "massive wage theft scheme." "Madison Equities had employees work 40 hours under one company and then had them 'work' for a different 'company' for time that should have been overtime time-and-a-half pay," the union wrote.

The union also posted fliers that read, "Caution: Employees of Madison Equities could be at risk for wage theft!" The fliers provided the phone number for a confidential employee hotline.

In the Nov. 1 complaint, lawyers for Madison Equities wrote that the company "has paid its employees all wages due and owing" and "does not owe 'unpaid overtime hours' to its employees."

The Attorney General's Office served Madison Equities and related LLCs with a civil investigative demand Oct. 7.

"The Attorney General has reasonable grounds to believe that Madison Equities and/or the M.E. Property Companies have failed to pay their workers — including but not limited to security guards — all wages required by state and federal law, including overtime wages," the civil investigative demand says.

Attorneys for Madison Equities responded Nov. 7 with a motion for a protective order, saying the civil investigative demand and a phone records subpoena "grossly overstep the [attorney general's] investigative authority."

John Stiles, deputy chief of staff for the attorney general, declined to comment.

Madison Equities is also facing a complaint alleging that it violated St. Paul's earned sick and safe time law. Alex Dumke, a spokesman for the city's Human Rights and Equal Economic Opportunity department, declined to comment, citing an open complaint.

Meanwhile, attorneys for the SEIU are fighting Madison Equities' defamation suit in court and have filed a retaliation claim with the Attorney General's Office.

"The contention is that the employer filed this lawsuit against Mr. Lewis in retaliation for him exercising his legal rights and reporting apparent violations of law in the form of wage theft and interference with earned sick and safe time benefits," said Justin Cummins, the attorney representing Lewis and the SEIU.

Lewis, 20, said he worked as a Madison Equities security guard for about a year and a half before quitting in August. Cummins and Iris Altamirano, SEIU Local 26 president, said they are not aware of any previous defamation lawsuits against the local.

Emma Nelson • 612-673-4509