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What Employers Need to Know About Same-Sex Marriage in Minnesota
On May 14, 2013, Governor Mark Dayton signed legislation making Minnesota the 12th state to recognize same-sex marriage. The new law will take effect on August 1, 2013. The text of the bill is available here. Here are a few things that employers should keep in mind now that same-sex marriage will be legal in Minnesota:
- Sexual Orientation Discrimination: Even before same-sex marriage was recognized in Minnesota, the Minnesota Human Rights Act (MHRA) prohibited employers from discriminating against applicants or employees on the basis of sexual orientation. See Minn. Stat. § 363A.08. A limited exception to this rule exists for non-profit religious associations or educational institutions that are operated or controlled by religious associations, but the exception does not apply to secular business activities that are unrelated to the religious and educational purposes for which the institution is organized. See Minn. Stat. § 363A.26.
- Marital Status Discrimination: The MHRA also prohibits employers from discriminating against applicants or employees on the basis of marital status. The Minnesota Supreme Court has defined “marital status” to include “the identity of the employee’s spouse and the spouse’s situation, as well as the spouse’s actions and beliefs.” Taylor v. LSI Corp. of America, 796 N.W.2d 153, 156 (Minn. 2011).
- Exemption for Marriage Ceremonies: For employers who administer marriage solemnizations or ceremonies, the new law includes an exemption for religious associations, which allows them to refuse to provide goods or services for marriage solemnizations or ceremonies that violate their sincerely held religious beliefs. The exception extends to employees or volunteers of religious associations who are acting within their responsibilities for the religious association. However, the exception does not apply to secular business activities that are unrelated to the religious or educational purposes of the religious association.
Takeaways: While same-sex marriage in Minnesota will likely not have a significant impact on employment law, employers should make sure that their policies and practices do not discriminate on the basis of sexual orientation or marital status.
Employee Handbook Haiku
Often times, policies in employee handbooks are longer and wordier than necessary. If for some reason your company was required to fit its entire employee handbook into a single haiku poem, here is what I would recommend:
Employment at-will,
We monitor your e-mails,
Report harassment.
This haiku accomplishes three of the primary goals of employee handbooks. It informs employees that they are employed at-will. It warns them not to expect their company e-mails to be private. And by directing employees to report harassment, it preserves the employer’s ability to assert the Faragher-Ellerth affirmative defense.
Takeaway: While it’s not advisable to fit an entire employee handbook into a single haiku, employers should keep in mind that sometimes shorter policies are more effective and more likely to be read by employees.
Is Court or DOL Approval Required for Settlements of Claims under the FLSA?
Maybe not – two recent cases cast doubt on the longstanding assumption that settlements under the Fair Labor Standards Act (FLSA) require approval by either a court or the Department of Labor (DOL) to be enforceable.
The leading case holding that court or DOL approval is necessary for FLSA settlements is Lynn’s Food Stores, Inc. v. United States, 679 F.2d 1350 (11th Cir. 1982). In that case, the Eleventh Circuit Court of Appeals explained that:
Recognizing that there are often great inequalities in bargaining power between employers and employees, Congress made the FLSA’s provisions mandatory; thus, the provisions are not subject to negotiation or bargaining between employers and employees.
The court further explained that:
FLSA rights cannot be abridged by contract or otherwise waived because this would “nullify the purposes” of the statute and thwart the legislative policies it was designed to effectuate.
Accordingly, the court in Lynn’s Food Stores, Inc. held that either court or DOL approval was required for an FLSA settlement to be enforceable. The court explained that when a court reviews a proposed settlement under the FLSA, it must ensure that the settlement is “a fair and reasonable resolution of a bona fide dispute over FLSA provisions.”
Two recent decisions have suggested that court approval is not always required for an FLSA settlement to be enforceable. First, the Fifth Circuit Court of Appeals held that a private settlement of FLSA claims may be enforceable without court or DOL approval when there exists a “bona fide dispute to liability” and the plaintiff-employees are represented by legal counsel. See Martin v. Spring Break ’83 Productions, L.L.C., 688 F.3d 247, 255–56 (5th Cir. 2012), cert. denied, 133 S.Ct. 795 (Dec. 10, 2012).
More recently, the Eastern District of New York held that court approval was not required for an FLSA settlement if the litigation had already commenced and the plaintiff-employees were represented by counsel. In that case, the judge explained that:
[A]lthough I have ruled to the contrary in the past, I have come around to the view that the procedure of a court requiring approval before it permits parties to voluntarily dismiss an FLSA action is incorrect. It runs afoul of Fed. R. Civ. P. 41, which gives the plaintiff, at the early stage of the case, or the parties jointly, at a later stage in the case, free reign to discontinue for any reason.
Picerni v. Bilingual SEIT & Preschool Inc., No. 12 Civ. 4938 (BMC) (E.D.N.Y., Feb. 22, 2013). The judge stated that “I believe the parties can voluntarily dismiss an FLSA case without judicial approval —if the defendant is willing to undertake the risk of doing so.”
Takeaways: The trend against a strict requirement for court or DOL approval of FLSA settlements is favorable for employers. However, the law in this area remains unsettled. Therefore, if certainty is desired, employers may still want to obtain court or DOL approval of a settlement under the FLSA out of an abundance of caution.
Can a Job Function Be “Essential” under the ADA if it is Rarely Performed?
Yes – a recent 8th Circuit Court of Appeals case makes clear that job functions may be considered “essential” under the Americans with Disabilities Act (ADA) even if they are rarely performed by the employee in question. Under the ADA, an employer may be required to provide a reasonable accommodation to a disabled employee, but employers are generally are not required to reallocate the “essential functions” of the employee’s job to other workers.
In Knutson v. Schwan’s Home Service, Inc., the 8th Circuit held that it was an essential function of a manager’s job to be certified by the Department of Transportation (DOT) to drive delivery trucks. See Case No. 12-2240 (8th Cir., Apr. 3, 2013). DOT certification was listed as a requirement in the manager’s job description, and there was no dispute that the employee had driven delivery trucks in the past. The employer in Knutson terminated the plaintiff after he sustained an eye injury and no longer met the DOT’s eligibility requirements for driving the delivery trucks. In arguing that his termination violated the ADA, the plaintiff argued that he could perform his manager job successfully without driving a truck. The plaintiff testified that he drove a delivery truck less than 50 times between November of 2007 and his termination in January of 2009.
In holding that DOT certification was an essential job function, the 8th Circuit held in Knutson that the employee’s specific personal experience was not relevant in determining essential job functions. Instead, the job description, the employer’s judgment, and the experience and expectations of all employees in the same position are what generally establish the essential functions of the job. In support of this position, the court cited a previous case in which the court held that a job function may be essential even if the employee never performed it so long as he “may be required” to perform it as part of his job. See Dropinski v. Douglas County, Nebraska, 298 F.3d 704, 708–09 (8th Cir. 2002). Accordingly, the 8th Circuit held in Knutson that the trial court correctly granted summary judgment and dismissed the plaintiffs’ ADA claim.
Takeaway: Determining what job functions are “essential” and what job functions are “marginal” before an accommodation is requested is one way that employers can be prepared to address a request for accommodation. The Knutson case shows that job functions may qualify as “essential” under the ADA even if they are not frequently performed.
What is Tortious Interference with Contract?
Tortious interference with contract is a legal claim that allows a party to a contract to sue a third-party who knowingly interferes with and causes a breach of a contract. Under Minnesota law, a plaintiff must prove five elements to succeed on a claim for tortious interference with contract:
- The existence of a contract;
- The alleged wrongdoer’s knowledge of the contract;
- Intentional procurement of its breach;
- Without justification; and
- Damages.
See Kallok v. Medtronic, Inc., 573 N.W.2d 356, 362 (Minn. 1998).
With respect to employment law, tortious interference with contract claims often arise in the context of non-compete agreements. If a competitor hires an individual subject to a non-compete agreement and employs him or her in a manner that violates the non-compete agreement, the former employer may be able to sue both the employee (for breach of contract) and the competitor (for tortious interference with contract).
Takeaways: Tortious interference with contract claims can be important tools for employers who utilize non-compete or non-solicit agreements to prevent unfair competition. When determining how to enforce a non-compete or non-solicit agreement, determining whether a tortious interference with contract claim is available should be a key consideration. The potential of a claim for tortious interference with contract should also be considered when hiring an employee subject to a non-compete or non-solicit agreement.
Considerations for Settlement of Employment Lawsuits
There are many potential factors that employers may need to consider when deciding whether or not to offer a settlement in an employment lawsuit. While every case is different, here are a few factors that employers should keep in mind:
- Strength of the Claims and Defenses: Whether or not an employer can win is one of the most important considerations. If the asserted claims are unsupported by evidence or contrary to law, the employer will have the upper hand in negotiations and can take a firmer position against settlement. If there is evidence of unlawful conduct, the plaintiff may have more leverage in negotiations.
- Cost: The cost of a settlement versus the cost of litigation is a fundamental consideration for employers. When a lawsuit can be settled for less than the cost of litigation, there may be a strong business justification for pursuing settlement. On the other hand, if the plaintiff’s demands greatly exceed the cost of litigation or the strength of the claims, this factor may weigh against settlement.
- Employee Morale: Many employment lawsuits involve challenges to the conduct or decisions of managers or employees who are still with the company. In some cases, demonstrating that the company supports the challenged conduct or decisions may be a factor that weighs against offering a settlement. In other cases, litigation may become so stressful and burdensome on the individuals involved that settlement is the best option for the company to move forward.
- Business Necessity: Some lawsuits may challenge policies or practices that are necessary for the business to be profitable. When this occurs, the company may be better served by prevailing in litigation to establish that its business model is legal. Alternatively, if there is a risk that a judicial decision will invalidate the company’s business model, a settlement may be preferable.
- “Me Too” Lawsuits: In certain cases, offering a settlement to one former employee may provoke other disgruntled employees to come forward with similar claims. If this is a likely outcome, an employer should carefully consider the risks of additional claimants when determining whether to offer a settlement.
- Public Relations: Public relations are a key consideration when a plaintiff makes inflammatory or unflattering allegations that could hurt the company’s image. In some cases, the best response to this kind of case may be to settle and avoid the bad PR. However, in other cases, protecting the company may require engaging in litigation to disprove the allegations.
- Principle: Sometimes it’s worth it to stick up for principle and not offer a settlement merely because it is expedient or less costly. Other times, it’s not. The primary downside to fighting for principle, of course, is that it may be costly and harm the company’s bottom line.
Takeaways: These are just some of the factors that employers may need to consider when determining whether to offer a settlement in an employment lawsuit. Because every case is unique, there is no one-size-fits-all rule for when a settlement should be offered. Each case needs to examined and considered on its own merits.
How Does Severance Pay Affect Eligibility for Unemployment Benefits?
Receipt of severance pay will typically either delay an applicant’s eligibility for unemployment benefits or will reduce the amount of benefits they receive. Minnesota law provides that an applicant is ineligible for unemployment insurance benefits during any week in which the applicant receives “severance pay … paid by an employer because of, upon, or after separation from employment” if the severance pay is “equal to or in excess of the applicant’s weekly unemployment benefit amount.” Minn. Stat. § 268.085, Subd. 3(a)(2).
The severance payments will affect the applicant’s eligibility for “all the weeks of payment.” When the severance payments are made periodically, the “weeks of payment” are calculated by dividing the total amount of the payments by the applicant’s last level of regular weekly pay from the employer. When the severance payment is made in a lump sum, the “weeks of payment” are calculated by dividing the amount of the lump sum by the applicant’s last level of regular weekly pay from the employer. See Minn. Stat. § 268.085, Subd. 3(b).
If the severance payment amount per week is equal to or greater than the applicant’s weekly unemployment benefit amount, the applicant is not eligible to receive unemployment benefits that week. If the amount of severance payment per week is less than the applicant’s weekly unemployment benefit amount, the applicant’s unemployment benefits are reduced by the amount of the severance payment for that week.
Takeaway: The impact of severance payments on a former employee’s eligibility for unemployment benefits is one factor, among many, that an employer may want to consider when determining whether to offer severance pay to an employee and, if so, how much.
April 9, 2013 Presentation – Safeguarding Employers in 2013
On April 9, 2013, employers from the Employment, Benefits, and Labor Section at Briggs and Morgan, P.A. will present “Safeguarding Employers in 2013: Changes in Employment, Benefits, and Labor Law” at Windows on Minnesota in the IDS Center in Downtown Minneapolis. The presentation is free to attend. Continental breakfast and lunch will be provided. CLE and HRCI credits will be applied for.
The agenda for the presentation will be as follows:
7:30 a.m. to 8:00 a.m. – Registration and Continental Breakfast
8:00 a.m. to 8:10 a.m. – Welcome
8:10 a.m. to 8:50 a.m. – Don’t Get Tripped Up by Federal Labor Law: Over the past year, the current labor board has issued a number of decisions that specifically limit the right of non-union employers in their ability to manage their employees. Learn how to avoid the most recent pitfalls created by the NLRB that impact both union and non-union employers. Presenters: Michael Moberg and Michael Wilhelm.
8:50 a.m. to 9:30 a.m. – HIPAA Enforcement Efforts On the Rise: What You Need to Know to Protect Your Company: The number and severity of penalties being assessed for HIPAA privacy and security violations are increasing at an alarming rate. We will review recent HIPAA privacy and security guidance, and what employers and business associates need to do to protect against potential penalty assessments. Presenters: Steve Brunn and Ira Friedrich.
9:30 a.m. to 9:45 a.m. – Break
9:45 a.m. to 10:20 a.m. – You’ve Got a Secret – Protecting Your Company’s Intellectual Property: You’ve invested tremendous resources into developing, manufacturing, and marketing your products and ideas. Your workforce is well aware of the ideas that have made you successful. How do you protect your investment? What role do non-compete and confidentiality agreements, copyrights and patents play in the workplace? What are the limitations of each and how do you structure and implement them with your workforce and vendors? We’ll discuss these issues and more. Presenters: Sally Scoggin, Andrea Bond, and Dan Rosenberg.
10:20 a.m. to 10:55 a.m. – Terrible, Rotten, No Good, Very Bad FMLA Issues
We’ve all had to deal with them and they challenge our wits and patience. We will review vexing FMLA issues that have repeatedly crossed our threshold, and through hypotheticals, offer practical tips on how to avoid having a bad FMLA day become a worse one. Presenters: Michael Miller and Ann Huntrods.
10:55 a.m. to 11:40 a.m. – The Impact of Electronic Evidence on Employment Litigation
Computers have dramatically changed the way employers investigate and defend employment litigation. We will address the benefits of and the burdens imposed by electronic evidence, how information can be recovered from computers even though it has been “deleted,” and we will discuss options for preserving electronic information. This session will also focus on non-traditional evidence sources, such as the iPhone, iPad and social media. Presenters: David Schooler and Mark Lanterman, CEO and Chief Technology Officer of Computer Forensic Services, Inc.
11:45 a.m. to 12:30 p.m. – Lunch
Please RSVP: If you are interested in attending the presentation, please contact Dena at rsvp@briggs.com.
DOL Releases New Family and Medical Leave Act (FMLA) Poster and Forms
The Department of Labor (DOL) recently released revised and updated several of its forms to help employers administer leave under the Family and Medical Leave Act (FMLA). The forms include a new form for certifying military caregiver leave for a veteran (as opposed to a current servicemember). In addition, the DOL has issued a new FMLA poster, which employers are required to post in their workplaces by March 8, 2013.
Here are links to the most up-to-date versions of the DOL’s FMLA poster and forms:
FMLA Poster
Serious Health Condition Certification Forms
• FMLA Certification Form for an Employee’s Serious Health Condition
• FMLA Certification Form for an Employee’s Family Member’s Serious Health Condition
Eligibility and Designation Notices
• Form for Notifying Employee of FMLA Eligibility and Rights & Responsibilities
• Form for Designating Leave As FMLA-Qualifying or Non-Qualifying
Military Leave Certification Forms
• FMLA Certification Form for “Qualifying Exigency” Military Leave
• FMLA Certification Form for Military Caregiver Leave for a Current Servicemember
• FMLA Certification Form for Military Caregiver Leave for a Veteran
Takeaway: Employers should post the new FMLA poster by March 8, 2013, and make sure that they are using the most up-to-date forms available for administering FMLA leave.
Follow MinnesotaEmployer.com On Twitter
MinnesotaEmployer.com recently launched a Twitter account, @mnemployer. You can access the Twitter feed here. The Twitter account provides another way that readers can follow MinnesotaEmployer.com, in addition to email subscriptions and RSS. If you use Twitter, check it out.
Does Accusing a Former Employee of Blackmail and Extortion Constitute Defamation?
Not necessarily. The U.S. District Court for the District of Minnesota recently dismissed a defamation claim that relied on accusations of blackmail and extortion in the widely publicized case of Michael Brodkorb v. State of Minnesota et al.
Michael Brodkorb formerly worked as the Communications Director for the Minnesota Senate Majority Caucus. In December of 2011, the Secretary of the Senate, Cal Ludeman, fired Brodkorb after an extramarital affair was revealed between Brodkorb and then-Senate Majority Leader Amy Koch. After his termination, Brodkorb threatened to sue the Minnesota Senate for gender discrimination and offered to engage in mediation of his claims. Following that threat, Cal Ludeman released a press release that suggested Brodkorb was trying “to extort a payment from the Senate” and stated to a newspaper reporter that Brodkorb was attempting to “blackmail” the Senate.
Brodkorb subsequently filed a lawsuit alleging a number of different claims. One of the claims was a claim for defamation based on the statements relating to alleged extortion and blackmail. On February 13, 2013, the court granted the defendants’ motion to dismiss the defamation claim.
The court rejected Brodkorb’s argument that the terms extortion and blackmail were defamation per se because they allege criminal conduct. The court explained that the terms extortion and blackmail have “broader non-legal” meanings and are often used colloquially. The court found that Ludeman used the terms in the “generalized sense, and not as a label for punishable criminal offenses.” In addition, the court held that because the statements were made in a “heated context,” they could not reasonably be interpreted to accuse Brodkorb of “engaging in the crimes of extortion and blackmail.”
The court also found that the statements could not be defamatory because they could not be proven true or false. Instead, the court characterized the statements as “simply subjective statements of rhetoric and hyperbole.” The court emphasized that a reasonable person would have understood the statements to be hyperbole given that they were made in the context of heated negotiations relating to Brodkorb’s threatened lawsuit. Accordingly, the court held that the statements could not give rise to an actionable defamation claim.
Takeaway: The Brodkorb case shows that, in the right context, referring to a former’s employee’s settlement demands as “extortion” or “blackmail” may not necessarily be defamation. On the other hand, the defendants in the Brodkorb case could have avoided the defamation claim (and some legal fees) by being more cautious about their language. For that reason, it is advisable for employers in most cases to avoid making statements about extortion and blackmail by their former employees – even if the statements may not result in actionable defamation.
Minimum Wage Legislation Gains Momentum
Efforts to raise Minnesota’s minimum wage appear to be gaining momentum. In early January, Minnesota Senator Chris Eaton introduced a bill that would raise the minimum wage in Minnesota to $7.50 per hour and require annual increases to match inflation. See S.F. No. 3. Then, in his State of the Union address, President Obama proposed raising the federal minimum wage to $9.00 and indexing it to inflation.
Now, Minnesota Senator David Tomassoni and Representative Melissa Hortman have introduced legislation that would raise Minnesota’s minimum wage to $9.50 per hour and index it to inflation. See H.F. No. 430. The bill would first raise the minimum wage for large employers to $8.25 per hour in September of 2013 and then raise it again to $9.50 per hour in July of 2014. Beginning in 2015, the minimum wage would increase on an annual basis to keep pace with inflation.
The Star Tribune reports that the latest minimum wage legislation is supported by the House Majority Leader, Erin Murphy, as well as a number of DFL committee chairs. The Star Tribune also reports that the Minnesota Speaker of the House, Paul Thissen, has said that a minimum wage hike in Minnesota has “a much better chance” of passing this legislative session than some of the other bills that have been introduced.
Takeaway: With broader support and multiple bills introduced, it is looking more likely that the Minnesota legislature may raise the state minimum wage this year. Employers with minimum wage employees should pay close attention to the pending legislation.
Ankoor Bagchi
Ann Huntrods
Britt Gilbertson
Danielle Fitzsimmons
David Schooler
Ellen Brinkman
Michael Miller
Michael Wilhelm
Mike Moberg
Neal Buethe
Sally Scoggin
Steve Brunn
