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The “Box” Will be Banned in Minnesota
The Minnesota Legislature passed “ban the box” legislation, and Governor Mark Dayton signed it into law. The law will take effect on January 1, 2014.
In essence, the law will ban private employers from inquiring into a job applicant’s “criminal record or criminal history” before an interview or, if there’s no interview, before a conditional offer of employment:
A public or private employer may not inquire into or consider or require disclosure of the criminal record or criminal history of an applicant for employment until the applicant has been selected for an interview by the employer or, if there is not an interview, before a conditional offer of employment is made to the applicant.
S.F. 523 (to be codified at Minn. Stat. §364.021). Violation does not give rise to a private cause of action, but rather the potential of fines for unremedied violations to be imposed by the Minnesota Department of Human Rights during a one year “introductory” phase. After the first year, higher fines may be imposed for violations, depending on employer size.
The legislation specifically prohibits causes of action by applicants, which was apparently an important part of the political compromises in the new law:
The remedies under this subdivision are exclusive. A private employer is not otherwise liable for complying with or failing to comply with section 364.021.
This legislation places Minnesota at the vanguard in this “ban the box” movement (only 3 other states have the ban). But the prohibition against private causes of action should help reduce employer concerns about its misuse by otherwise unsuccessful applicants.
Takeaways: Employers need to revise their application to take off the “box” (whether literally a “box” or in another form) or any questions about “criminal records or history” and move the inquiry to the interview or conditional offer stages of the hiring process. Since Minnesota is at the forefront, “off the shelf” application forms generated by national-offices for local Minnesota offices need particular attention. And remember, this is really a “fair crack at it” legislation, meaning that criminal history may still be relevant to a hiring decision, but only when the applicant has been able to demonstrate his or her qualifications despite the criminal history. In weighing the impact of such background information, it will be important to consult with legal counsel on the ultimate question of relevancy and the potential of discrimination. While this new legislation doesn’t allow for a private lawsuit, the EEOC is still very interested in the potential misuse of criminal background questions when investigating possible protected class discrimination.
“Hey, I was Just Trying to be a Nice Guy!” – Don’t be Inconsistent When Discussing An Employee Termination
A case out of the Eleventh Federal Circuit provides a cautionary tale for any employer who is trying to cut a terminated former employee a break in references. Maybe don’t be a “nice guy”:
In Kragor v. Takedo Pharmaceuticals of America, Inc., 702 F.3d 1304 (11th Cir. 2012), the Appellate Court reversed and set for trial an age discrimination case in which a manager who had terminated an employee for misconduct disavowed the reason in a subsequent reference call. He apparently wanted to help out the former employee—who learned about the kindness and brought it into evidence as proof that the reasons given for the termination were pretextual. The Appeals Court found this contradiction created a triable case to allow the age discrimination case to proceed:
When the employer’s actual decisionmaker, after terminating an employee for misconduct (or the appearance of misconduct), says without qualification that the employee is exceptional, did nothing wrong, did everything right, and should not have been fired, that contradiction—when combined with a prima facie case—is enough to create a jury question on the ultimate issue of discrimination.
So much for trying to be a “nice guy.”
Takeaways: Be cautious in staying consistent with the reasons provided for a termination and statements to third parties. Good intentions do not always lead to good results. When you want to give a more positive reference after a troubled termination, work with legal counsel on maintaining consistency with the company’s reasons for termination.
What is a “Continuing Violation” in Employment Discrimination Law?
Federal and state anti-discrimination laws have short statutes of limitations. There are significant reasons for this, including fairness to employees and the preservation of evidence which, in the employment setting, can disappear quickly with employee departures and the like. But an important exception to the protection of short limitation periods is the “continuing violation” rule by which incidents that occurred outside of an expired statute of limitations period can be “resurrected” and aggregated with incidents that occurred during the period. This is allowed, in very general terms, when the acts on either side of the statute of limitations show a “persistent, ongoing pattern” of discrimination. Under the “continuing violation” rules, even a single act within the statute of limitations can bring in actions outside the period if the Court finds that such a “persistent, ongoing pattern” exists.
For an employer, this is a dangerous possibility. But it is far from a blanket rule and cases and administration guidance provide considerable refinement, definition and protections. Also, the rule has different application in different states, agencies, and federal circuits.
Takeaway: An employer should at least have an “antenna up” for the possible application of a “continuing violation” rule when reviewing whether a newly reported incident could fit a “persistent, ongoing pattern” of discrimination given similar incidents reported by the employee years prior. If that could be the case, consult legal counsel to see whether the “continuing violation” theory could apply and, perhaps, require more preemptive and protective action than the new incident itself may otherwise merit.
“Ban the Box” Bill May Soon Apply to Private Employers
Private employers in Minnesota should be aware of a “Ban the Box” bill introduced in the Minnesota House and Senate that provides as follows (new language underlined):
364.021 PUBLIC AND PRIVATE EMPLOYMENT; CONSIDERATION OF CRIMINAL RECORDS.
(a) A public or private employer may not inquire into or consider the criminal record or criminal history of an applicant for employment until the applicant has been selected for an interview by the employer or, if there is not an interview, before a conditional offer of employment is made to the applicant.
See HF 690; see also SF 523. In essence, the bill would prohibit a private employer from running a criminal background check or asking applicants questions about their criminal history in an application until the interview process or, if there is no interview, before a conditional offer of employment is made. Currently, the prohibition applies only to public employers.
The bills include enforcement provisions that differ in some ways, but both would allow for attorneys’ fees and fines. The bills are currently in committee. While they have not yet captured significant media attention, they are being discussed by employers’ groups and Chambers of Commerce. If passed, this will be an important change for many private employers’ standard hiring procedures; although certainly many already follow this or a similar contingent offer processes to safeguard against possible discrimination claims, as currently recommended by the Minnesota Department of Human Rights.
Takeaway: Private employers who inquire about applicant’s criminal backgrounds should monitor this proposed “ban the box” legislation.
Update on Minnesota Minimum Wage Law Legislation
It is looking increasingly likely that the legislature will pass a state minimum wage increase this legislative session. Minnesota Employers should prepare and budget accordingly. We previously posted on the complications presented by the fact that Minnesota is not, and likely will not become, a tip credit state. But a potential “patch” is in the works that could take some of the edge off the impact of the increase on hospitality industry employers.
The Minnesota Restaurant Association has proposed a “stepped” system that would keep certain tip earning employees (those who, with tips, average at least $12 an hour) at the lower federal minimum wage of $7.25 per hour and stepped up to the new state minimum wage over a three-year period. Whatever the ultimate “patch,” if any, this proposal and others show the state employers’ recognition that legislation will likely be passed raising the minimum wage in Minnesota.
Takeaway: Minnesota Employers should consider what changes they will need to make if the increased minimum wage law passes. Please let us know if you have any questions concerning implementation and compliance.
Yahoo’s Telecommuting Ban: The Beginning of the End of a Trend?
Many employers have implemented telecommuting policies and agreements to stay current with human resources trends, take advantage of communication technologies, improve retention and recruiting, and reduce overhead. Often it has worked brilliantly, with some estimates that 10% of the working population work from home at least one day a week.
But employment lawyers see that when telecommuting doesn’t work, it really doesn’t work. There can be many policy enforcement complications, performance review barriers, and estrangements from normal workplace discipline and personal development.
Given such complications, the bloom may be coming off the rose, a bit. Yahoo recently made news with its ban on telecommuting. Best Buy followed by imposing significant restrictions on its flexible work policy.
Perhaps now is a good time for employers to review their telecommuting or alternative work policies or individual agreements. When doing so, consider the following:
- Is the policy clear in its requirements and does it reflect current realities?
- Is the policy applied in a non-discriminatory way?
- Is the policy consistent with other policies such as timekeeping, work hours, and dependent care policies?
- Are there sufficient monitoring systems?
- Do performance reviews address the differences in alternative employment arrangements?
- Are there confidentiality protections?
- Are workers’ compensation, Fair Labor Standards Act, and state income tax reporting requirements addressed?
- What are the conditions for termination of the arrangements?
Takeaways: This is just a beginning checklist — but with the trend perhaps trending down, it may be the right time to double-check your policies and individual agreements. And use your legal counsel in the process (even if he or she is working from home!).
Minimum Wage and the Tip Credit in Minnesota: Nothing is Simple
As we recently discussed, there is newly proposed minimum wage legislation in Minnesota. Such supposedly simple legislation can bring legal complexities and unintended consequences for Minnesota employers given its interaction with other laws.
One case in point is the implication to Minnesota hospitality industry employers (a very significant share of the state economy and an industry with traditionally narrow profit margins) because Minnesota does not have a “tip credit” law. In 43 other states and as allowed by the FLSA, a tip credit can be applied to a portion of an employer’s minimum wage obligations. Minnesota law, however, prohibits application of a tip credit to either the federal or state minimum wage.
Many hospitality industry employers argue that a minimum wage increase in Minnesota will have the unintended negative effect of increasing the cost of certain “minimum wage” tip-earning employees who actually earn far in excess of minimum wage by earning tips in a “no-tip credit” state. This increased cost, they argue, will be at the expense of the non-tip earning employees and, ultimately, the consumer. Some hospitality industry employers are strongly opposing the increase or proposing a tiered minimum wage system to offset unintended consequences. Some hope for tip credit legislation – although that may be a remote hope. A good discussion of the ongoing debate is found on the Minnesota Public Radio website.
Takeaways: Nothing is simple! Minnesota employers should stay current on the state and federal minimum wage legislation proposals and project their implications to their own labor force in light of the many other laws relevant to lower-wage workers.
Save the Date – Employment, Benefits, and Labor Law Seminar on April 9, 2013
On Tuesday, April 9, 2013, attorneys from Briggs and Morgan, P.A. will present “Safeguarding Employers in 2013 – Changes in Employment, Benefits, and Labor Law.” The seminar will occur from 8:00 a.m. to 11:45 a.m. at Windows on Minnesota in the IDS Center in downtown Minneapolis. CLE and HRCI credits will be applied for.
If you are interested in attending, please contact Dena at rsvp@briggs.com. Additional details about speakers and topics will be announced soon.
FMLA Leave: Can an Employee on Leave get a Bonus and Avoid the Onus?
Does an employee on leave under the Family and Medical Leave Act (FMLA) have the reinstatement right to a bonus that other employees received while the employee was on leave?
The FMLA mandates that an employee be reinstated to the “same or equivalent position” upon his or her completion of the leave and return to work, which makes this a legitimate question. Like a lot of employment law, the answer is nuanced.
In essence, if an employee was eligible for a bonus before the leave (such as a “stay” bonus or attendance incentive pay), he or she remains eligible upon return. For example, compliance guidance provided by the Department of Labor (DOL) states that “if an employer offers a perfect attendance bonus and the employee has not missed any time prior to taking FMLA leave, the employee would still be eligible for the bonus upon returning from FMLA leave.”
An important exception is for performance bonuses – an employee who, due to an FMLA leave, has not earned a performance bonus that others have (for example one set by production levels during the leave) is not entitled to such a bonus upon reinstatement. An example provided by the DOL’s compliance guidance is a sales bonus. Conceptually, it is the difference between being unfairly penalized for the FMLA leave by being deprived of an earned bonus and being unfairly rewarded for it by receiving an unearned bonus. But there is an exception to the exception, of course: if the employer’s policies allow such bonuses for employees on other types of leaves, they must apply to an FMLA leave as well. (And that is a good point for a handbook review checklist).
Takeaway: This is the general rule, but the devil is in the details. Employees have litigated the issue and the DOL requires compliance, of course. It is a good idea to seek legal counsel in matters of close interpretation.
When Does The Minnesota Government Data Practices Act Apply to Private Employers?
Private employers in Minnesota need to be familiar with personnel record statutes and employee privacy rights. The Minnesota Government Data Practices Act, a wholly separate and much more demanding set of employee privacy laws that apply to public employers and public employees, is irrelevant to private employers – for the most part.
An exception is for corporations or non-profit organizations under contract with a government entity when following the Data Practices Act is required by the contract. See Minn. Stat. § 13.05, Subd. 11; see also Minn. Stat. § 13.02, Subd. 11. By virtue of contracting with the governmental entity (state, county, or a municipality), a private employer may need to respond to certain employee or public personnel data requests based upon the classifications and processes provided in the Data Practices Act. Typically, the Data Practices Act governs data on individuals (including personnel data) made available to the private employer through the government contract. Determining whether, how, and to what extent the Data Practices Act may apply to personnel data related to a government contract is a process of careful contract drafting and legal analysis.
Takeaway: A private employer with a government contract needs to keep in mind possible state Data Practice implications in responding to third party or employee requests for certain contract-related personnel data. This is an important point in contract drafting, and legal review should be involved to determine whether this unique requirement of the Minnesota Data Practices Act may apply to a private employer.
Is Minnesota a “Right to Work” State?
All the national media attention given the passage in Michigan of a “Right to Work law” may raise the question, is Minnesota a Right to Work state? With the Michigan law, there are now 24 that are considered “right to work” states.
The answer is no – Minnesota is not a right to work state. Minnesota state law allows negotiation of a union security clause that requires all workers who receive the benefits of a collective bargaining agreement to pay union dues ( i.e., the proportion of union dues related to collective bargaining expenses). This applies to public and private employers.
But there was a legislative push for a Minnesota Right to Work law in the 2012 session by way of a proposed state constitutional amendment entitled Minnesota Freedom of Employment Amendment or the “Right to Work”Amendment. It provided:
Shall the Minnesota Constitution be amended to guarantee all citizens the individual freedom to decide to join or not join a labor union; to remain with or leave a labor union; or to pay or not pay dues, fees, assessments, or other charges of any kind to a labor union or any affiliated third party or charity, without having it affect their employment status?
After considerable publicity and legislative procedures, the proposed amendment stalled and, as we know, did not appear on the November 2012 ballot.
Takeaway: The winds of change may someday resurrect in Minnesota another attempt to prohibit mandatory union membership or payment of union dues. But the immediate driver is political will and with a DFL- controlled legislature and a DFL Governor committed to preserving current state law, the chances are that Minnesota employers will be observers rather than participants in any Right to Work national zeitgeist caused by the Michigan law.
Will the U.S. Supreme Court Ad–“Vance” Supervisor Liability Law under Title VII?
Employers need to keep an eye on the pending U.S. Supreme Court decision of Vance v. Ball State University where the “supervisor” rule establishing vicarious liability for harassment claims under Title VII likely will be expanded or contracted. Vance involves an employee’s claim that her employer was vicariously liable for the harassing acts of a fellow employee who the employee herself regarded a “supervisor,” but who did not have actual power to “fire, hire, or promote” her.
The distinction between a “co-worker” and a “supervisor” is critical. Under the long-established Supreme Court Faragher and Ellerth rules for determining employer liability for the harassing acts of another employee, only a supervisor’s actions can give rise to vicarious liability for an employer (i.e., automatic liability with limited defenses). In contrast, a co-worker’s actions require proof of negligence by the employer in order for there to be employer liability (i.e., knowledge and failure to take remedial action – a much more difficult standard of proof and subject to easier defenses). The EEOC and many courts are not of like mind in the definition of “supervisor” with many courts requiring “fire, hire and promote” authority for a supervisor and the EEOC taking a more expansive and subjective definition. Vance will likely settle the question.
A good summary of the case and the oral argument at the Supreme Court, heard on November 26, 2012, is on the NPR website.
What does this mean for employers? If the Vance decision adopts the more expansive definition of “supervisor” advanced by the EEOC, there likely will be greater vicarious liability exposure for employers encompassing the actions of employees who have some supervisory authority, but are without the power to “fire, hire, or promote.” If the Court adopts a narrower definition and limits supervisor liability to something closer to the “fire, hire, or promote” rule, it will be particularly important for employers to be sure that in their organizational charts and job descriptions the authority to “fire, hire, or promote” is clearly and accurately demarcated in order to limit exposure for vicarious liability.
Takeaway: Once the Vance decision comes down, employers should work with legal counsel to accommodate any changes it brings to the world of employer liability. Minnesota Employer will keep you in the know, of course!
Ankoor Bagchi
Ann Huntrods
Britt Gilbertson
Danielle Fitzsimmons
David Schooler
Ellen Brinkman
Michael Miller
Michael Wilhelm
Mike Moberg
Neal Buethe
Sally Scoggin
Steve Brunn
