Author Archives: Neal Buethe
A “Pre-emption” or a uniform labor standards bill is a reaction in the Minnesota Legislature to the passage of sick time ordinances in Minneapolis and St. Paul. The idea is that Minnesota Employers’ obligations to employees regarding time-off and other similar obligations should be the same state-wide out of principles of fairness in competition and conformity. Also, the burden to metro-area employers in the current ordinances could well be altered or at least reduced if pre-emption bill passed by which state law pre-empts local ordinances and state-wide views pre-empt metro views of good public policy regarding private employer sick leave obligations.
A pre-emption bill is working its way through the legislature in these final session days, but the report “from the front” is that Governor Dayton will veto any pre-emption bill that makes it to his desk.
Takeaway: Minnesota Employers should prepare for the continued existence of different paid time-off standards throughout the State.
A distinguishing characteristic of employment discrimination claims in their short statute of limitations – for Minnesota Human Rights Act claims the statute is only 12 months. Defamation claims are two years and tort and breach of contract claims are six years, so a one year limitation period is very favorable to employers. Doubtless, the Minnesota Legislature (like Congress with Title VII and its 300 day limitation period) saw employment discrimination claims as volatile and problematic enough to set a short time to make a claim. And many a claim has fallen on a count to the 365th day between the alleged discriminatory act and the filing of a charge.
A recent Minnesota Supreme Court case highlights a nuance to the hard and fast rule of 365 days. There is built into the statute a tolling period for any internal arbitration process or “conciliation”:
The running of the one-year limitation period is suspended during the time a potential charging party and respondent are voluntarily engaged in a dispute resolution process involving a claim of unlawful discrimination under this chapter, including arbitration, conciliation, mediation or grievance procedures pursuant to a collective bargaining agreement or statutory, charter, ordinance provisions for a civil service or other employment system or a school board sexual harassment or sexual violence policy. – Minn. Stat. 363.28, subd. 3(b).
In Peterson v. City of Minneapolis, the plaintiff brought an age discrimination claim through an internal report and the defendant employer started an internal investigation under a Workforce Policy that contemplated possible resolution. While the trial courts found otherwise, the Minnesota Court of Appeals and ultimately the Minnesota Supreme Court concluded that the internal process constituted “alternative dispute resolution” of the “conciliation” type that suspended the statute. While there was no neutral involved or actual mediation discussions, the Court found that the intentions of the Workforce Policy and possibility of resolution constituted “conciliation” under the tolling provision of the statute.
For Minnesota Employers, this means that the protection provided by the short statute of limitations can be affected by an internal “alternative dispute resolution” process. To offset this potential uncertainty, either there should be no alternative dispute process as defined by Peterson as part of the internal investigation or, if there is, there should be a distinct end so the added tolled period can be accurately calculated. The statute has certain reporting provisions as well.
Takeaway: Like a referee in a Minnesota United football game, the Minnesota Courts will simply add to statute of limitations “regulation time” any tolled period. Minnesota Employers doing internal investigations should be savvy to this and consult with legal counsel about how best to know if a process likely tolls the one year period or design the process so there is no tolling or its impact is short.
Moving beyond earned sick leave and safe time ordinances, it is very likely that this year the Minneapolis and St. Paul City Councils will take on the possibility of a $15 minimum wage ordinance. Such a municipal minimum wage exceeds state ($7.75 for small employers and $9.50 for large employers) and federal ($7.25) minimum wage, of course. The municipal earned sick leave and safe time ordinances passed by both cities in 2016 were the first wave in a national movement for employee rights that began in other major cities (such as San Francisco and Seattle) where the $15 minimum wage was then the next wave. Indeed, a task force on the $15 minimum wage ordinance has just formed in Minneapolis. State minimum wage initiatives stalled out in the last legislature sessions, so the major municipalities are taking the initiatives.
Arguments in favor of the $15 an hour minimum wage ordinances sound in quality of life and attraction of entry level employees in a high employment rate economy. And although $15 an hour may not be a realistic living wage, especially for a family, it reduces the need of low wage employees to work several jobs, creating a very human reason for metropolitan areas to have a higher minimum wage. Indeed, many Twin Cities metropolitan area employers already pay a minimum of $12 plus an hour, so the change is not extreme.
And the possibility of such ordinances passing as a second wave of employee rights municipal legislation has likely increased with the employer community’s inability to hold back the first wave sick leave and safe time ordinances in 2016. Having spent a lot of effort unsuccessfully in 2016 in broad opposition to the first wave, it is a strong possibility that employers opposing the second wave of the $15 minimum wage in 2017 will need to focus their efforts on exemptions and credits. Tip credits, student work study, training wages, gradual phase-in periods are examples of such possible exemptions in the ordinances that reduce the impact of this next wave.
Takeaway: Minneapolis and St. Paul employers are wise to anticipate in their business models, budgets for payroll and benefits and staff planning the passage of a $15 municipal minimum wage ordinance and follow closely the passage and specific provisions of this next wave of employee-protection ordinances. You don’t want to wind up like the old story of King Canute who tried to order the waves to hold back (unsuccessfully). Minnesota Employer will keep you updated.
Minnesota Employers operating in the East Metro need to be aware of the impending deadlines in the St. Paul Earned Sick and Safe Time Ordinance (“ESST”) which requires employers with St. Paul-based employees to provide paid sick leave and safe time to those employees. For employers with 24 or more full or part-time St. Paul area-based employees, the ESST is effective July 1, 2017 and for smaller employers the effective date is Jan. 1, 2018. A good summary of the ordinance and its impact on St. Paul employers is available at the St. Paul Chamber of Commerce website.
While there is currently litigation contesting the legality of the similar Minneapolis ordinance, that litigation does not directly affect the St. Paul ESST. St. Paul area employers should assume it will come into being. The Minneapolis ordinance has similar effective dates and there is no current injunction (more about the Minneapolis ordinance in an upcoming Minnesota Employer Blog post).
The implementation of the St. Paul ESST raises corollary questions about uniformity of company-wide PTO policies for employers with employees inside and outside St. Paul proper. It may be easier to administer a uniform rather than a fractured PTO policy for such employers.
Takeaway: The impending ESST Ordinance effective dates require employer action and, perhaps, a broader review of PTO policies with legal counsel. ESST is going to happen so affected employers should prepare!
The St. Paul Chamber of Commerce is seeking to fund a study on structural barriers to hiring. The focus is on job requirements that may not be necessary to fulfilling job duties but have the practical effect of creating a barrier for applicants otherwise qualified to do the job. For example, a driver’s license requirement for a job accessible by public transportation is such a structural barrier. Educational requirements may be another such example of an unnecessary barrier to hiring. Such structural barriers are bad for business and for the community. This is a rising movement.
Minnesota Employers dealing with the current low unemployment economy have a business reason for analyzing such structural barriers which usually are found in job description requirements. And it can only be a salutary process since any employment lawyer will attest that an accurate and updated job description is key to any defense of a discrimination, workers compensation, unemployment compensation or other wrongful termination claim. The process of review can be in partnership or in conjunction with a legal best practices review to have accurate and non-discriminatory job description.
Takeaway: The movement to eliminate structural barriers to hiring is strengthened by the hiring motivations in a low unemployment environment and put the spot light on job descriptions. Legal counsel can certainly assist in reviewing the legal implications of changing a job description to reduce unnecessary barriers to hiring while preserving legitimate and legally-enforceable job requirements.
All Minnesota Employers are statutorily obligated to provide employees, “the right to be absent from work for the time necessary to appear at the employee’s polling place, cast a ballot and return to work” without a pay or PTO deduction or any direct or indirect interference. Minn. Stat. §204C.04. This applies to any time of day and to exempt and non-exempt employees scheduled to work during the time the polls are open. Violation is a misdemeanor.
Is this potentially a citizen’s “senior skip day?” No. The statute rests on a rule of reasonableness regarding the scheduling of time off, and the amount of time off. The employer has the right to be told when the employee will be gone and ask that absences be coordinated (but can’t so require). An employee who just doesn’t show up for work on November 7th can’t count on a statutory free pass.
How can an employer handle a suspected abuse? Preemptive, pro-active measures are likely not the best path to follow since warning and rules could well look to be prohibited indirect attempts to thwart the statutory time-off requirement. But after-the-fact, carefully handled individual investigations of suspected abuse can be consistent with the statute and its rule of reasonableness. The previous version of the statute allowed for the morning off and that may be a reasonable rule of thumb.
Takeaway: An employer suspecting employee abuse, especially wide-spread abuse, of the paid time off to vote statute can, after the fact, determine if the employee(s) actually complied with the statutory rule of reasonableness. But proceed cautiously given the statute’s prohibition against indirect interference. Advice of legal counsel would be particularly helpful when the employer seeks to make sure election day doesn’t become defection day.
There are times when a departing employee who is getting a severance package in exchange for a release isn’t departing immediately. If the employee signs the release and then continues to work for a period before departure, what is the legal effect of the release?
Under Minnesota law (and general principles of common law) an employee cannot release a future claim. So if the employee signs a release effective day one, but works through day twenty-one, the release is effective only for claims that arose before day one. That is, the employer still has potential exposure for claims that could arise between days one to twenty-one even though it paid severance for a release. And since such a stay-over can have its stresses and employees can get “settlement remorse”, having “tail exposure” may be a real concern for the employer.
A common solution is the “back-stop” release; that is, a second release required by the separation agreement signed upon the day of departure that covers the “tail” period. The back-stop is cumbersome and somewhat duplicative, but it is the safest course – especially when there is a realistic possibility of a claim arising during the “tail” period.
Takeaway: If an employer is looking to keep a departing employee for a period of time after a separation agreement and release is signed, consult legal counsel to discuss a “back-stop” second release as part of the separation package. Otherwise, the employer may not be getting what it thought it bargained for – a complete and comprehensive release.
Chambers USA recently released its annual law firm rankings, and once again, gave a “Band 1” ranking (the highest ranking available) to the Employment, Benefits, and Labor section at Briggs and Morgan, P.A. Chambers particularly recognized Ann Huntrods, Michael Miller, and Gregory Stenmoe for their excellence in the field of employment law. For more information about the rankings, click here.
Department of Labor regulations allow employers to round the calculation of work hours to the nearest quarter hour for purposes of counting hours worked under the Fair Labor Standards Act, as long as the rounding is done neutrally; i.e., the employer rounds up and also rounds down. See 29 C.F.R. § 785.48(b). The idea behind permissible rounding is that neither employee nor employer are favored if there is neutral rounding up and rounding down. This gives employers a practical and efficient way to calculate hours worked and wages paid under the FLSA.
The U.S. Court of Appeals for the Ninth Circuit, in a case involving permissible rounding at a call center for Time Warner, issued the first reported case upholding and applying the DOL’s neutral rounding policies in interpreting the FLSA. The Federal Court also held that under California’s own FLSA, the federal interpretation would apply since nothing in California’s law prohibited neutral permissible rounding. Corbin v. Time Warner Entm’t-Advance/Newhouse P’ship, No. 13-55622, 2016 WL 1730403, at *1 (9th Cir. May 2, 2016).
Minnesota also has a state FSLA and, for Minnesota employers, it is likely that the state FLSA will be interpreted according to the DOL policies. As in the Time Warner case, Minnesota’s FLSA overtime law does not have requirements that would counter allowing for neutral permissible rounding.
Takeaway: Minnesota employers using rounding up or rounding down payroll software based upon neutral principals and neutrally applied can likely look to the DOL regulations as providing guidance and safe harbor under federal and state law. Golfers round down, taxi cab drivers round up, and now employers can do both.
A recent case involving Whole Foods demonstrates the ever-increasing importance to the National Labor and Relations Board of protecting Section 7 concerted activity under the National Labor Relations Act. Section 7 protects activities of employees when exercising their rights under the National Labor Relations Act to collective action. Both unionized and non-unionized employees are protected under Section 7.
Whole Foods had in its employee handbook a rather innocuous-sounding prohibition against employees recording conversations, phone calls, images or company meetings without a prior approval from management and without the consent of all the parties to the conversation. The reasons given to Whole Foods for this policy was to encourage “open atmosphere” and “employee trust” – which are certainly understandable reasons. The NLRB saw it differently. Whole Foods Market, Inc., 363 NLRB No. 87, 2015 NLRB Lexis 949 (Dec. 24, 2015).
What the NLRB saw was a blanket prohibition with “broad and unqualified language” that could have a chilling effect upon employees’ exercise of their Section 7 activities to act in concert to protect or pursue collective bargaining rights. In the eyes of the NLRB, the prohibitions were worded broadly enough to include protected concerted activities such as recording images and picketing, documenting unsafe working conditions and recording evidence for later use in administration or judicial proceedings. The NLRB found there to be a “chilling” effect in such broad language and struck the handbook provisions.
Takeaway: Employers need to be increasingly careful about provisions in their handbooks and policies that effect employees’ right to communicate among each and now to record such conversations. Even with the best of intentions, such blanket prohibitions could have a chilling effect on the employees’ right to engage in concerted activities to protect their NLRA-guaranteed right to engage in collective action. Employers should seek good legal counsel to refine employee communication policies so that they can meet their legitimate objectives without creating a chilling effect on Section 7 rights.
Should the fundamental rules of Minnesota Employment Law be uniform throughout the State? That is the question at the heart of certain bi-partisan proposed legislation that would require uniformity in state labor regulations regarding minimum wages, benefits, leaves or other work conditions by pre-empting local mandates. For example, the Cities of St. Paul and Minneapolis are considering ordinances requiring sick and safe time for employers operating within their municipal boundaries. For a very good ongoing summary of the St. Paul/Minneapolis ordinances – in task force stage – please see the St. Paul Area Chamber of Commerce blog.
If passed, these ordinances will create a local mandate with a significant effect on employer obligations for certain Minnesota employers, those within Minneapolis and St. Paul, and not for other Minnesota employers, those operating outside of the Twin Cities. Unlike other state labor and employment laws, the applicability for the law is not based on the size or nature of the employer but whether the employer operates business within the municipal boundaries.
There are 21 other states that have laws supporting state-wide uniformity of labor regulations. The purpose of House File HF 1241/SF 565 is for Minnesota to become the 22nd State that would pre-empt local labor ordinances and require that Minnesota Labor Law be uniform. Advocates see the proposed “uniform” legislation as keeping a “consistent marketplace” in the fundamental aspects of employment law throughout the State. Opponents may view it as reducing the influence of local governments on local businesses and public welfare.
Takeaway: All Minnesota Employers should be tuned into this movement. The controversial “sick and safe time” ordinances being considered by the Minneapolis and Saint Paul City Councils will likely have an impact beyond their borders by triggering consideration of state-wide uniformity in labor regulations. Stay tuned to Minnesota Employer for further updates.
The settlement of a recent case brought by an in-house attorney against his former employer highlights the importance of great care in any public statements about an employee’s termination.
The case involved a public statement made by the employer (specifically statements made to a regulatory group) that, arguably, portrayed the employee’s voluntary departure as being tied to alleged corporate wrongdoings. The resulting public impression, at least as was contended by the former employee, was that the corporate wrongdoings ended with the employee’s departure. The case was complicated by the complex rules of defamation law, such as presumptions of damages, degree of malice and the like, but it settled for a substantial sum and that’s the point for all employers – a former employee’s reputation needs to be protected against defamation.
Takeaway: An employer needs to take care in any potentially harmful descriptions about the nature of the former employee’s departure in any statements to third persons or the termination may be followed by a defamation suit.