Minnesota Has More Job Openings Than Job Seekers

If you’re an employer struggling to fill open positions with qualified candidates, you’re not alone.

According to the Star Tribune, the number of job openings in Minnesota is now greater than the number of unemployed job seekers.  Specifically, in October of 2015, there were 97,977 job openings, but only 89,793 Minnesotans seeking jobs.  The labor shortage is due to the State’s strong economy and its continuing low overall unemployment rate.  In September of 2015, the unemployment rate in the Twin Cities metropolitan area dropped to 3.1%, its lowest level since 2000.  Statewide, the unemployment rate in Minnesota is 3.7%.  That compares with 4.3% in Wisconsin and 5.0% nationally.

The primary effect of the labor shortage for employers is that it is harder to recruit new employees.  Employers may need to offer greater benefits and incentives to applicants, or they may need to offer relocation to candidates from out-of-state to bring in new talent.  The labor shortage may also affect retention of existing employees, who may become subject to the recruitment efforts of competitors.

Takeaway:  There is no end in sight for the current labor shortage in Minnesota that is making it difficult for employers to recruit and retain qualified employees.

What Is Constructive Discharge?

Constructive discharge occurs when an employer deliberately makes an employee’s work environment so intolerable that resignation is the employee’s only plausible alternative. A recent federal court of appeals decision demonstrates, however, that constructive discharge is usually difficult for an employee to prove.

In Cosby v. Steak N Shake, the employer gave the plaintiff two performance warnings and a supervisor told the plaintiff that “this” would continue if the plaintiff did not resign. No. 15-1052 (8th Cir. Nov. 4, 2015). When the plaintiff asked about his future at the company, the supervisor laughed. A few minutes later, the plaintiff announced his resignation, and the supervisor said, “this is perfect!” The supervisor also said that he considered the resignation a “huge plus.” The plaintiff later sued and alleged that he was constructively discharged due to race and disability discrimination and retaliation.

In analyzing the plaintiff’s claims, the Cosby court explained that to prove constructive discharge, an employee must show that:

  1. A reasonable person in the employee’s situation would find the working conditions intolerable;
  2. The employer intended to force the employee to quit, or the employer could reasonably foresee that its actions would cause the employee to quit; and
  3. The employee must not quit without giving the employer a reasonable chance to resolve his claim.

The court further explained that constructive discharge requires “considerably more proof than an unpleasant and unprofessional environment.”

The Cosby court held that the plaintiff failed to meet the high standard necessary for a constructive discharge claim. The court reasoned that the supervisor’s laughter and threat that performance warnings would continue until the employee resigned were merely unpleasant, but did not create an “intolerable” working environment. The court also held that the plaintiff could not rely on the supervisor’s comments following his resignation as an alleged justification for the resignation. Finally, the court held that the plaintiff failed to give the employer a reasonable opportunity to address his grievances before his resignation and, therefore, was barred from pursuing a constructive discharge claim.

Takeaway: There is a high evidentiary burden for plaintiffs to establish a claim for constructive discharge. To succeed on a constructive discharge claim, a plaintiff must establish that his or her working conditions were objectively intolerable, that the plaintiff’s resignation was intended or reasonably foreseeable, and that the plaintiff gave the employer an opportunity to correct the alleged problems before he or she resigned.

Can an Employer Give Preference to a Bilingual Job Applicant?

Yes – a recent federal court case demonstrates that a candidate’s bilingual language abilities can serve as a legitimate, nondiscriminatory rationale for a hiring decision.

In George v. Hennepin County, a 51 year-old plaintiff applied for a job as a dental hygienist, but the clinic already had a younger candidate in mind. Civil No. 14-2694 (D. Minn. Oct. 8, 2015). The younger candidate was already working for the clinic in a grant-funded position and had demonstrated the ability to work well with the clinic’s Spanish-speaking clients. Although the younger candidate applied for the job opening, too, she did not initially note that she was bilingual in her application. The clinic later allowed the younger candidate to amend her application after notifying her that it considered her Spanish abilities sufficient for her to qualify as bilingual. The clinic then hired the younger candidate.

After not receiving a job offer, the plaintiff – who was not bilingual, but had some limited Spanish language ability – filed a lawsuit alleging age discrimination. Among other things, the plaintiff argued that the clinic discriminated against her because it did not contact her to determine the extent of her Spanish language abilities, like it did for the younger candidate.

The court rejected the plaintiff’s argument. The court reasoned that the record amply supported the clinic’s need for a bilingual dental hygienist. The court further explained that the clinic adequately explained why it contacted the younger candidate for a better explanation of her Spanish language skills based on the clinic’s prior experience with the younger candidate – not because of age discrimination. Because the court found that there was no genuine issue of fact regarding whether the clinic’s rationale for hiring the younger candidate was a pretext for discrimination, the court dismissed the plaintiff’s claims on summary judgment.

Takeaway: In some circumstances, a job candidate’s bilingual language abilities may serve as a legitimate, nondiscriminatory rationale for an employer’s hiring decision.

White House Takes Executive Action To Ban the Box For Federal Agencies

On November 2, 2015, President Obama announced new executive action to “ban the box” by requiring federal agencies to wait until later in the hiring process to inquire about an applicant’s criminal history. In addition, the President is supporting efforts in Congress to impose similar ban-the-box requirements on the entire federal government as well as federal contractors.

According to the press release, “the President is directing the Office of Personnel Management (OPM) to take action where it can by modifying its rules to delay inquiries into criminal history until later in the hiring process.” This action is intended to allow those with prior criminal histories to receive fair consideration for employment in the federal government.

The President’s executive action follows a number of states and municipalities that have adopted similar “ban the box” requirements. In Minnesota, ban-the-box legislation took effect in January of 2014. A number of other states have similar laws.

Takeaway: The recent executive action to ban the box for federal agencies is reflective of a broader trend towards requiring employers to wait until later in the hiring process to inquire about an applicant’s criminal history.

Is It Harassment If A Supervisor Makes An Employee Wear a Speedo, Touches His Butt, and Asks Him Out For Drinks?

No – the Tenth Circuit Court of Appeals recently affirmed summary judgment against an employee’s sexual harassment claim even though his supervisor required him to wear a speedo and touched his butt.

In McElroy v. American Family Insurance, the plaintiff worked as a sales manager for an insurance company. No. 14-4134 (10th Cir. Oct. 30, 2015). The plaintiff alleged that his supervisor complimented his appearance, clothing, and cologne; touched his back and buttocks, ostensibly to illustrate the location of the supervisor’s back pain; instructed the plaintiff to participate in two body-fat contests during which he required the plaintiff to wear a speedo and tried to touch his buttocks; and repeatedly asked the plaintiff to join him for drinks during a company event. After the plaintiff was fired, he sued for alleged sexual harassment.

Even though the district court acknowledged that some of the supervisor’s actions could make others feel uncomfortable, the district court dismissed the case on summary judgment. The district court reasoned that the plaintiff’s allegations did not establish that the alleged harassment was sufficiently severe and pervasive to give rise to an actionable claim.

The Tenth Circuit Court of Appeals affirmed. The court explained that the district court’s acknowledgment that the supervisor’s actions could make others feel uncomfortable was not enough to satisfy the high standard for hostile work environment claims.

The McElroy case is another illustration of the principle that courts will not find actionable hostile environment claims unless the conduct is truly so severe and pervasive as to poison the work environment. This is a difficult standard for plaintiffs to satisfy. Merely alleging inappropriate behavior in a handful of instances is generally not enough. In various cases, courts have held that there is no liability even if a supervisor: (i) screams, curses, and acts like a jerk towards employees; (ii) tells fat jokes and farts at employees; or (iii) squeezes an employee’s nipple (a single time). An employer can even fire an employee for being too attractive.

Takeaway: The standard for an actionable hostile work environment claim is high, but employers would be wise not to tempt fate. If at all possible, it remains a good idea for employers not to require employees to wear speedos and not to try to touch employees’ rear-ends.

How Much Does an Employee Charge of Discrimination Cost?

The average cost of defense and settlement of an employee charge of discrimination is $125,000, according to a recent study by insurance provider Hiscox. The study focused on 446 claims reported by small and medium-sized businesses with fewer than 500 employees. Here are some of the key highlights from the study:

  • The average duration of an employment matter from start to finish was 275 days.
  • The average cost of both defense and settlement was $125,000.
  • The average self-insured retention deductible for companies with employment practices liability insurance was $35,000.
  • Only 19% of the matters resulted in both defense costs and a settlement payment. That means that 81% of the charges (or about 4 out of 5) were nuisance suits that did not result in any settlement.
  • The median judgment for employment matters that ended up in court and resulted in a finding of liability was $200,000, in addition to defense costs.

Takeaway: Employment litigation can be expensive, even if the employer wins. Working proactively to prevent problems from occurring in the first place is the most effective strategy for avoiding the potential costs of employment claims.

Legislation Considered to Reduce Questionable ADA Litigation Against Public Accommodations

Legislation is under consideration at both the federal and the state level to address a dramatic increase in litigation against places of public accommodation alleging violations of the Americans with Disabilities Act (ADA) and the Minnesota Human Rights Act (MHRA). Many have questioned whether the motive underlying these lawsuits is a legitimate interest in increasing accessibility or an opportunistic desire to make money.

Over the past year, more than 100 public accommodation lawsuits have been filed in Minnesota alone, many targeting small business for alleged violations of the ADA and the MHRA. Similar lawsuits have also been filed in California, Florida, and Texas.

In many of the lawsuits, whether the alleged violation exists or truly impedes accessibility for the disabled is highly questionable. For example, one of the lawsuits targeted a small business with an accessibility ramp that was just one degree off from what was required. Another lawsuit alleged that a restaurant did not have accessible seating in the front of the restaurant, but the small business owner strenuously argued that accessible seating was available. In virtually every case, however, the litigants have demanded a settlement in the amount of $5,000 to $10,000, which is far less than the cost of litigating. The result is that many small business owners give in to the demand and pay the settlement even though there may be a valid defense on the merits and even though no actual damages may have occurred.

A number of individuals and organizations that strongly support the public accommodation provisions of the ADA and MHRA question the tactics and motives of these lawsuits. The City Pages reports that some disabled individuals believe that the lawsuits are undermining the effectiveness of the laws and giving a bad name to legitimate efforts to address accessibility issues. According to WCCO, the Minnesota State Council on Disability disapproves of the strategy underlying the lawsuits as well.

To address these problems, legislation is under consideration at both the federal and state levels that would require that before a party files a lawsuit for a public accommodation violation under the ADA or MHRA, the party would first have to: (i) provide a prelitigation notice of the violation to the place of public accommodation; and (ii) allow the public accommodation a period of time (e.g., 60–120 days) to fix the problem before filing a lawsuit. If the public accommodation fails to fix the problem, only then would a lawsuit be permitted. The intent behind the legislation is to create a process for addressing accessibility problems without forcing small businesses to choose between paying a settlement of questionable merit or incurring even greater costs to defend themselves.

In the meantime, one step that small business owners can take to protect themselves is to review their public spaces for compliance. Some good resources for small businesses to consult regarding their accessibility obligations include the following:

Takeaway: If you feel strongly about the proposed legislation to require a prelitigation notice and a waiting period before a public accommodation lawsuit can be filed under the ADA or MHRA, you should contact your federal or state representatives to let them know how you feel.

2016 Cost-of-Living Adjusted Amounts for Employee Benefit Plans

On October 21, 2015, the Internal Revenue Service announced the 2016 cost-of-living adjusted amounts for certain retirement plan and fringe benefit limitations. Earlier in 2015, the Internal Revenue Service announced the 2016 cost-of-living adjustments affecting health savings accounts and high deductible health plans, and on October 15, 2015, the Social Security Administration announced the 2016 cost-of-living adjustments related to Social Security benefits.

A list of the cost-of-living adjusted amounts that most commonly affect employer-sponsored benefit plans is available here.

Recent Study Gives Many Employers a Failing Grade Regarding Nursing Mother Protections

The University of Minnesota recently published a study reporting that only 40% of working mothers were provided with adequate break time and a clean, private space for expressing milk upon their return to work from parenting leave. To help employers avoid liability for failing to comply with applicable legal requirements relating to nursing mothers, here is a quick reminder about what the law requires:

Federal Nursing Mother Protections

Under federal law, the Fair Labor Standards Act (FLSA) requires that employers must provide employees with unpaid “reasonable break time” to express milk for their child for up to one year after the child is born. For these breaks, the employer must provide the employee with a private space, other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public. Employers with less than 50 employees may be able to avoid this requirement, however, if they can show that it imposes an undue hardship. For more information, click here.

Minnesota Nursing Mother Protections

Under Minnesota law, the recently passed Women’s Economic Security Act (WESA) also creates protections for nursing mothers. WESA requires that employers must provide an employee with “reasonable unpaid break time each day to an employee who needs to express breast milk for her infant child.” The law specifies that the employer must provide a room or other location, in close proximity to the work area, other than a bathroom or a toilet stall, that is shielded from view and free from intrusion from coworkers and the public and that includes access to an electrical outlet, where the employee can express her milk in privacy. Like the FLSA, there is an exception to these requirements if the employer can show that they would “unduly disrupt the operations of the employer.” For more information, click here.

Takeaway: The University of Minnesota’s recent study suggests that many employers may be exposed to potential liability for failure to comply with legal requirements relating to nursing mothers. If employers are in doubt, they should review their practices to ensure compliance.

Update: Minneapolis City Council Cancels November 4th Hearing and Postpones Paid Sick Leave Proposal

The Minneapolis City Council’s November 4th public meeting regarding the proposed sick leave ordinance has been canceled.  At a meeting today, the City Council voted to postpone its consideration of the proposed sick leave ordinance until 2016.  Instead, the Council voted to create a work group to study the proposed ordinance in more detail.  The work group is scheduled to report back to the City Council no later than February 24, 2016.  You can read more about the City Council’s decision at Minnpost.

City Council To Hold Public Hearing on Proposed Sick Leave Ordinance on November 4, 2015

Employers who want to share their opinions about the proposed sick leave ordinance under consideration by the Minneapolis City Council should mark their calendars for 10 a.m. on Wednesday, November 4, 2015.  At that time, the City Council will hold a public meeting to discuss the proposed sick leave provisions from the Working Families Agenda at the City Council Chambers in Room 317 of the Minneapolis City Hall located at 350 S. Fifth St., Minneapolis, MN 55415.

Employers who feel strongly about the proposed ordinance should consider attending the meeting to make sure their voices are heard.  If you are unable to attend the meeting in person, consider contacting the City Council members directly.

Update: This meeting has been canceled.

How To Deal With Hungover Employees

According to a recent study by the Center for Disease Control (CDC), employers in the U.S. lost approximately $77 billion in 2010 due to the impaired productivity of hungover employees. The figure is $90 billion if you include absenteeism due to hangovers, and it balloons to $249 billion if you add in the additional costs of health care, car crashes, and deaths. Here’s what employers should know about dealing with the costly problems posed by hungover employees:

Under the Americans with Disabilities Act (ADA), alcoholism can, in some circumstances, qualify as a disability. As a result, employers need to be careful about taking an adverse action against an employee solely because he or she is an alcoholic. In some cases, it may also be appropriate to offer a reasonable accommodation to an employee struggling with addiction, such as a leave of absence to attend a treatment program.

On the other hand, the ADA is also clear that an employer may discipline an employee for legitimate workplace performance problems relating to the use of alcohol or other drugs. The ADA regulations provide that an employer:

May hold an employee who engages in the illegal use of drugs or who is an alcoholic to the same qualification standards for employment or job performance and behavior to which the entity holds its other employees, even if any unsatisfactory performance or behavior is related to the employee’s drug use or alcoholism.

29 C.F.R. § 1630.16(b)(4). Therefore, it is permissible for the employer to discipline or terminate an employee for any performance problems that occur in the workplace as a result of alcohol or drug use, so long as the discipline is not based on the employee’s status as an alcoholic or an addict alone.

Employers also need to be aware that certain states prohibit employers from disciplining or terminating an employee for his or her off-duty consumption of alcohol or other legal products, unless certain exceptions apply. For example, the Minnesota Lawful Consumable Products Act provides that an employer may not discipline an employee for off-duty consumption of alcohol unless the discipline is based on: (1) a bona fide occupational requirement and is reasonably related to the employment activities or responsibilities of the particular employee or group of employees; or (2) is necessary to avoid a conflict of interest or the appearance of a conflict of interest with any of the responsibilities owed by the employee to the employer. Minn. Stat. § 181.938.

Like the ADA, lawful product laws provide an additional reason for employers to focus not on the employee’s consumption of alcohol, but rather on the employee’s poor performance in the workplace, when addressing performance problems due to hangovers.

Takeaway: When dealing with hungover employees, employers should generally focus on the employee’s workplace performance problems – such as lack of productivity, absenteeism, inattentiveness, or errors in work product – without passing judgment on the employee’s off-duty behaviors or whether the employee has an addiction problem.