Drafting an Offer Letter Without Undoing At-Will Employment Rights
To preserve “at-will” employment status, employers will carefully avoid entering formal contracts and insert “at-will” disclaimer provisions in their Handbooks and Policies. But these efforts can be countered, thwarted, or complicated by poorly drafted offer letters that promise continued employment to a “hot” candidate. Often the problem comes from a manager recruiting and trying to attract a candidate, not Human Resources or senior management.
Such promises can create contract or reliance claims if the “hot” candidate turns out to be not so hot as an employee and has to go. An offer letter can constitute a contract as to termination or other terms and conditions of employment which can lead to damages for breach – particularly suspect are letters that have no clear at-will disclaimer language. A reliance claim arises when there is a promise of employment that is specific and relied upon and compensates an employee for losses incurred in taking a job that doesn’t work out. Reliance claims usually arise in the context of job offers that are withdrawn.
Courts have often rejected attempted contract or reliance claims on the strength of the at-will doctrine, but a specific-enough promise with clear detrimental reliance or an offer letter that makes promises of employment for a definite period of time can support a reliance or contract claim and make a termination an expensive mess.
Takeaway: Once you write an offer letter, review it backwards. If the employment is at-will, include language expressly stating that. Think about a termination meeting and ask yourself if you are making specific promises or saying things about the position that may compromise at-will employment rights. If you think you are, then consult legal counsel about rephrasing the letter to take out the potential contract or reliance language without entirely losing the intended tone and points meant to attract the candidate. Or, if such promises are really necessary to attract the candidate, have counsel draw up a reasonable contract that maximizes the employer’s rights while giving whatever binding assurances are necessary for the hire.
Can Employers Require Employees to Provide Medical Information Regarding Disabilities?
A recent case from the Minnesota Court of Appeals noted a significant difference between the Americans with Disabilities Act (ADA) and the Minnesota Human Rights Act (MHRA).
Under the ADA, an employer “may require” a medical examination or inquiry of an employee so long as it is “job-related and consistent with business necessity.” 29 C.F.R. § 1630.14(c). Under the MHRA, an employer may request that an employee provide medical documentation concerning the employee’s continuing ability to perform the job or potential need for accommodation “with the consent of the employee.” Minn. Stat. § 363A.20, Subd. 8(a)(2).
In Crummy v. Enterprise Minnesota, the Minnesota Court of Appeals held that an employer discriminated against an employee when it demanded that he provide medical documentation for his dyslexia and fired him for not providing the documentation. 2012 WL 360391 (Minn. Ct. App. 2012). The employer argued that the employee was insubordinate when he did not provide the requested medical documentation, but the court rejected this argument. The facts of the case are relatively unique because the court found that the employee never requested an accommodation from the employer, but the employer requested medical documentation from the employee anyway.
Takeaway: The Crummy case highlights the potential significance of minor language differences between the ADA and MHRA. When responding to requests for accommodation from employees, employers in Minnesota need to ensure that their practices are in compliance with both statutes.
When is Drug and Alcohol Testing Permissible Under Minnesota Law?
In Minnesota, employers may conduct drug and alcohol testing only if they follow certain rules. The Minnesota Drug and Alcohol Testing in the Workplace Act says that testing may only be done:
- For job applicants, but only where a conditional offer has been made and testing is required for all applicants for that position;
- As part of an annual routine physical examination;
- On a random basis, but only if the employee is in a safety sensitive position or is a professional athlete and the testing is conducted in accordance with a collective bargaining agreement;
- Where an employer has ”reasonable suspicion” that the employee is under the influence; has violated written work rules regarding drugs or alcohol, has caused a personal injury or caused a work related accident, or was involved in operating machinery involved in a work related accident; and
- Where the employee is involved in chemical dependency treatment after being referred by the employer or under an employee benefit plan.
To conduct testing, an employer must have a written policy that describes who is subject to testing, the circumstances under which testing will be done, the right of any employee or applicant to refuse testing and the consequences, any adverse action that may be taken on test results, the right of employees and applicants to explain positive results and the right to request and pay for confirmatory retests. See Minn. Stat. § 181.952.
The statute contains certain notice and posting requirements. Employees have the right to request copies of test results, to have confirmatory retests at the employee’s own expense and to explain test results that may be the result of prescription medications or other information that is relevant to the reliability of a positive test result. Employers may not discharge employees on a first positive test result unless the employee has first been given the chance to participate in a counseling or rehabilitation program and the employee has either refused to participate or failed to successfully complete the program. With limited exceptions, test results are to be kept confidential. See Minn. Stat. § 181.953; see also Minn. Stat. § 181.954.
Takeaway: Any employer conducting drug or alcohol testing in Minnesota must have a written policy and carefully follow the rules related to such testing.
Does Title VII Prohibit Discrimination Against Transgender Individuals?
According to a recent decision from the Equal Employment Opportunity Commission (EEOC), discrimination by an employer against a transgender individual violates Title VII of the Civil Rights Act of 1964. In Macy v. Holder, the EEOC held that “discrimination against a transgender individual because of her gender-nonconformity is sex discrimination, whether it’s described as being on the basis of sex or gender.”
The EEOC’s decision in Macy is consistent with decisions from several federal circuit courts. The Eleventh Circuit Court of Appeals held that discrimination against transgender individuals violated Title VII in Glenn v. Brumby, 724 F.Supp.2d 1284 (11th Cir. 2010). The Sixth Circuit Court of Appeals reached the same conclusion in Smith v. City of Salem, 378 F.3d 566 (6th Cir. 2004).
For employers in Minnesota, discrimination based on transgender status is also prohibited by the Minnesota Human Rights Act.
Takeaway: Under federal and Minnesota state law, it is illegal for employers to discriminate against transgender applicants and employees. To reduce potential liability, employers should ensure that their managers and supervisors understand the legal protections that apply to transgender individuals.
Do Employees Need To Be Paid For Commuting Between Home and Work?
The Fair Labor Standards Act (FLSA) generally does not require employees to be paid for commuting between home and work, but there are a few potential exceptions to this rule that employers should know. Here are the primary rules for determining whether commuting time constitutes hours worked under the FLSA:
- Ordinary Commuting: Travel from home to work at the beginning of the workday and from work to home at the end of the workday is a normal incident of employment for which compensation is typically not required. 29 C.F.R. § 785.35.
- Ordinary Commuting with a Company Car: Compensation is generally not required for ordinary commuting while using an employer’s vehicle if the travel is “within the normal commuting area for the employer’s business or establishment and the use of the employer’s vehicle is subject to an agreement on the part of the employer and the employee or representative of such employee.” 29 U.S.C. § 254(a).
- Commuting in Emergency Situations: Travel between home and work may constitute overtime under certain emergency circumstances. The Department of Labor’s regulations provide the example that “if an employee who has gone home after completing his day’s work is subsequently called out at night to travel a substantial distance to perform an emergency job for one of his employer’s customers all time spent on such travel is working time.” 29 C.F.R. § 785.36.
- Special Assignments in Another City: Commuting time may be compensable when an employee who regularly works at a fixed location in one city is given a special one-day work assignment in another city. Compensation is required if the travel is performed for the employer’s benefit and at the employer’s special request to meet the needs of a particular and unusual assignment. Only travel time in excess of the employee’s ordinary home-to-work and work-to-home travel must be counted as worktime. 29 C.F.R. § 785.37.
Takeaway: In most situations, employers do not need to pay employees for commuting between home and work, but there are a few exceptions to this rule. Employers who call on employees to respond to emergencies or who send employees on special assignments to other cities should be familiar with the applicable rules governing compensation for commuting time.
NLRB’s Ambush Election Rule Declared Void by D.C. District Court
Judge James E. Boasberg of the U.S. District Court for the District of Columbia issued an order on May 14, 2012, declaring the National Labor Relations Board’s so-called “ambush” election rule invalid. Late last year, the NLRB promulgated the rule, which limited the rights of management to challenge certification petitions and would likely reduce the period between the filing of a petition and the election. The rule became effective April 30, 2012, after Judge Boasberg refused a motion to enjoin the rule brought by the U.S. Chamber of Commerce and the Coalition for a Democratic Workplace. However, Judge Boasberg’s denial of that motion did not end the lawsuit, which sought an order declaring the rule invalid. Judge Boasberg decision yesterday did just that.
Although the Chamber and Coalition challenged the Rule on a number of grounds, Judge Boasberg’s decision focused on just one – that ”the final rule was adopted without the required statutory quorum.” In lay terms, because only two members of the Board voted on the final rule and Member Hayes did not vote on the final rule, there was no quorum (at least three members per Section 3(b) of the Act) and the Board could not, therefore, lawfully approve the final rule. In response to the decision, the NLRB temporarily suspended implementation of the rule, and Acting General Counsel Lafe Solomon directed regional offices across the country to immediately resume processing representation petitions under the old rule.
Takeaways: Judge Boasberg’s decision leaves those employers with petitions filed between April 30th and May 15th (about 150) with an interesting decision. According to a press release issued today by the NLRB, those employers will be given the decision to re-initiate the case under the old rule or go forward with the cases as currently postured. While the decision yesterday will set back implementation of the “ambush rule” for the time being, employers can be sure that the NLRB will continue to push for implementation of expedited election procedures in coming months. In the meantime, employers should continue to be proactive when it comes to union avoidance. The key to union avoidance is making certain that employees feel informed, respected, and valued. Well trained supervisors are essential to creating positive employee relations, and employers should be working now to ensure that their supervisors are trained to be aware of union issues and to respond appropriately.
Employment Contracts: A Range of Possible Options
While most states are at-will employment states, employers commonly enter a range of individual employment contracts that can either alter or preserve the at-will relationship. Typical reasons for such contracts in an “at-will” legal environment include recruiting the best candidate, protecting employer rights, or securing releases in exchange for severance.
Employment lawyers commonly see the following range of individual employment agreements:
- The Comprehensive “Just Cause” Agreement: These are sophisticated binding contracts often limited to the most senior management. They have provisions for “just case” termination, severance, protection of company information, post-employment restraints, and, as applicable, stock options, change of control, and the like. If such a contract is breached by the employer (for example, terminated without “just cause”), the employee usually can seek the remaining compensation due under the contract. Drafting such important agreements takes an investment of time and effort and truly needs careful legal counsel and review. The adage “a small mistake in the beginning can be a big mistake in the end” is rarely more applicable than in these type of contracts.
- The “Term” Contract: These contracts can be as sophisticated as the comprehensive “just cause” contracts, but they include a term provision ending the contract at a certain date with renewal or non-renewal at the discretion of the parties. This provides the employer with the opportunity to end the employment relationship at non-renewal time without the risk of breach. Term contracts are often first or “trial” contracts and can interest employees who believe that they will be able to negotiate better terms once they have proven themselves. Legal review for consistency in term contracts is very important if the non-renewal option is to work.
- The “At-Will” Agreement: These individual contracts contain many terms and conditions of employment (e.g., salary, bonus, confidential information, post-employment constraints), but there is no just cause provision by which the employee can only be terminated for specific reasons following specific procedures. The objective of these “at-will” agreements is to commit the employer and employee to certain aspects of employment, but to keep employment itself at-will – usually with only a modest notice provision, if any. Preserving “at-will” status in a contract prohibits the terminated employee from seeking damages for breach of a contract. Because these contracts are so limited, they can be tricky to draft.
- Post-Employment Contract Constraints: Many employers, especially those with sales forces, have contracts that are explicitly limited to securing non-compete and non-solicitation obligations as a condition precedent to employment. The contents of the contract, legal “consideration”, professional drafting, and timing of these agreements will be of critical importance if they are to be enforceable. Contracts with post-employment constraints may either preserve or alter at-will status.
Takeaway: Think about the range of possible individual employment agreements (there are more types than just listed above) when determining whether you want to enter an individual employment contract. What are your objectives? What does the candidate really require in order to be successfully recruited? Are you setting precedent in the organization? And stay away from the “off the shelf” contracts – each needs to be drafted with care and professional precision.
Can an Employer Enforce a Dress Code Policy?
Employment lawyers are hearing more inquiries about drafting and enforcing dress codes or professional appearance policies. This may be in response to casual days run amok. Or it could be the come-back of the “professional look” courtesy of Don Draper and his colleagues at Mad Men.
Whatever the reason, an employer can legally implement a dress code policy and enforce it. But there are certain touchstones that employer should keep in mind, including:
- Have a carefully written policy: Otherwise, enforcement can be subjective and inconsistent. This doesn’t necessarily mean a detailed description of what can or cannot be worn, but rather a policy rooted in business-based reasons. These can include public image, customer relations, productive workplace, and safety. And if there are specific items of clothing you want to prohibit (jeans, cut-offs, sandals), a “non-exclusive” list limits subjectivity.
- Beware of certain discrimination complications: An employee can, under limited circumstances, claim a religious reason for a type of dress or appearance. In some circumstances, “reasonably accommodation” of certain religiously mandated attire may be required unless it constitutes an “undue burden.” Tattoos and piercings rarely meet the standards for such protection. If an employee claims a religious reason for a dress code violation, consulting counsel on precedent and administrative guidance may be helpful. There can also be “disparate discriminatory impact” concerns in dress code enforcement, such as a disproportionate impact on one gender over the other. A policy should be as gender-neutral as possible.
- NLRA Concerns: The National Labor Relations Act (NLRA) prohibits the universal banning of union insignia, even in non-union workplaces. Labor lawyers can guide you through the narrow exceptions to this NLRA requirement if union insignia is a dress code issue in your workplace.
- Promulgation and manager training: Like any new policy, be sure that employees sign an acknowledgement (or have a clear record of distribution) and train managers on the “dos and don’ts” of the Policy – it’s one that may require more careful training than usual since there is a heightened possibility of a poorly trained manager making religious or gender-specific statements that could cause complications.
Takeaways: Employers do not need to tolerate poor employee appearance. Certain basic legal issues play an important part in drafting an effective dress code or professional appearance policy. Draft your Dress Code Policy with specifics that fit your organization’s needs and stay within legal boundaries. Employers can also keep enforcement legal by keeping it uniform (pun intended).
Ineligibility for Unemployment Insurance Benefits Because of Employment Misconduct
Under Minnesota law, one of the reasons a terminated employee may be found ineligible for unemployment insurance benefits is if the employee was terminated for “employment misconduct.” Minn. Stat. § 268.095, Subd. 4.
Employment misconduct is defined as “any intentional, negligent, or indifferent conduct, on the job or off the job that displays clearly: (1) a serious violation of the standards of behavior the employer has the right to reasonably expect of the employee; or (2) a substantial lack of concern for the employment.” Minn. Stat. § 268.095, Subd. 6(a). Whether the conduct in which the employee engaged was only a single incident is an important fact in determining whether the conduct rises to the level of employment misconduct, but is not in itself decisive.
The statute expressly states that the following types of conduct do not qualify as employment misconduct:
- Conduct that was a consequence of the applicant’s mental illness or impairment;
- Conduct that was a consequence of the applicant’s inefficiency or inadvertence;
- Simple unsatisfactory conduct;
- Conduct an average reasonable employee would have engaged in under the circumstances;
- Conduct that was a consequence of the applicant’s inability or incapacity;
- Good faith errors in judgment if judgment was required;
- Absence because of illness or injury of the applicant, with proper notice to the employer;
- Absence, with proper notice to the employer, in order to provide necessary care because of the illness, injury, or disability of an immediate family member of the applicant;
- Conduct that was a consequence of the applicant’s chemical dependency, unless the applicant was previously diagnosed chemically dependent or had treatment for chemical dependency, and since that diagnosis or treatment has failed to make consistent efforts to control the chemical dependency; or
- Conduct that was a consequence of the applicant, or an immediate family member of the applicant, being a victim of domestic abuse.
Minn. Stat. § 268.095, Subd. 6(b).
Takeaway: Knowing what constitutes employment misconduct can help employers know when it is appropriate to oppose a former employee’s application for unemployment benefits and when the employer’s resources could be better focused elsewhere.
Leaves of Absence for Jury Duty
Under Minnesota law, “[a]n employer shall not deprive an employee of employment, or threaten or otherwise coerce the employee with respect thereto, because the employee receives a summons, responds thereto, serves as a juror, or attends court for prospective jury service.” Minn. Stat. § 593.50, Subd. 1. Violations of the statute constitute criminal contempt and upon conviction, may result in a fine of up to $700 and/or a 6-month jail term.
An employee unlawfully terminated is entitled to reinstatement along with lost wages incurred for a maximum of six weeks in addition to attorneys’ fees.
Takeaway: While an employer is entitled to a copy of the summons for jury service to validate the need for the absence, the employer cannot not terminate the employee or take any action, which could be viewed as coercive or a threat to continued employment. If you do, you and your company may have a need for a jury in a subsequent civil or criminal proceeding.
The NLRB’s New Election Procedures Are Now In Effect
Yesterday, the NLRB’s controversial new rule aimed at streamlining the union election process took effect. Legislative efforts to block or roll back the new rule are stalled in the Senate, and a last-ditch effort to enjoin enforcement of the rule in federal district court failed on Friday. As a result, at least until challenges to the legality of the NLRB’s new rules have been resolved by the Federal District Court for the District of Columbia, certification petitions filed with the NLRB will be subject to the expedited election procedures.
Although no firm timelines for conducting hearings or elections are included in the rule, the changes will have the effect of reducing the rights of employers to challenge the petitioned for bargaining units, and will expedite the election process. Specifically, the rule limits the scope of what can be reviewed in the pre-election hearing, and virtually eliminates any right to NLRB review until after the election.
Takeaways: The practical result of the changes is likely to be that employers caught unprepared will have little time to mount an effective campaign against union certification. With this in mind, employers should act now to address those workplace problems that tend to increase employee interest in union representation. Employers who have not already taken action should provide supervisor training that will allow them to: (1) identify a union organizing effort before a petition has been filed; and (2) represent the interests of management in a way that will not expose the organization to unnecessary unfair labor practice charges.
Please Note: Petitions filed prior to April 30th will not be subject to the procedures outlined in the new rule.
The Interactive Process Under the Americans with Disabilities Act (ADA)
The Americans with Disabilities Act (ADA) generally requires an employer to provide a reasonable accommodation to a disabled employee or applicant if the accommodation is necessary to enable the employee or applicant to perform the essential functions of the job and will not result in undue hardship to the employer. In some circumstances, an employer may be required to engage in an “interactive process” with the employee or applicant to determine whether accommodation is necessary or what type of accommodation is necessary.
What is the Interactive Process? The “interactive process” is an informal dialogue between the employer and the employee or applicant in potential need of an accommodation. The interactive process has two primary objectives:
- To identify the precise limitations resulting from the disability of the employee or applicant; and
- To identify potential reasonable accommodations that could overcome those limitations.
See 29 C.F.R. § 1630.2(o)(3). While employees are generally responsible for requesting an accommodation, employers should typically initiate the interactive process when the potential need for accommodation is obvious.
Takeaway: In some cases, engaging in the interactive process with an employee can be an important part of an employer’s compliance with the ADA. Knowing when to implement the interactive process and what objectives should be accomplished by the interactive process can help employers reduce the potential for liability.
Michael Wilhelm
Ellen Brinkman
Ankoor Bagchi
Mike Moberg
Ira Friedrich
Steve Brunn
Danielle Fitzsimmons
David Schooler
Michael Miller
John Hauge
Neal Buethe
Sally Scoggin
Jason Hedican
