Author Archives: Neal Buethe

Minnesota Employment Law and Local Mandates

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.

Defamation and Termination

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.

USERRA Leave: The “Most Favorable Treatment” Requirement

The Uniform Services Employment and Reemployment Rights Act (“USERRA”) requires that a USERRA leave be given the “most favorable treatment” to any “comparable leave” provided by the employer.  20 C.F.R. § 1002.150.  Since most USERRA leaves are unpaid, this “most favorable treatment” requirement raises questions when an employer offers different types of paid leave.  If an employer gives two days’ paid leave for a bereavement leave, does an employee on a USERRA leave have the right to two days’ pay?

The key concept is “comparability” – an imprecise term, indeed.  USERRA does provide some refinement:

If the non-seniority benefits to which employees on furlough or leave of absence are entitled vary according to the type of leave, the employee must be given the most favorable treatment accorded to any comparable form of leave when he or she performs service in the uniformed services. In order to determine whether any two types of leave are comparable, the duration of the leave may be the most significant factor to compare. For instance, a two-day funeral leave will not be “comparable” to an extended leave for service in the uniformed service. In addition to comparing the duration of the absences, other factors such as the purpose of the leave and the ability of the employee to choose when to take the leave should also be considered.

20 C.F.R. § 1002.150 (emphasis added).  Thus, points of comparability are the duration, purpose, and timing of other leaves.  While a paid sabbatical leave may be comparable, a two-day bereavement leave is not.  But the USERRA comparability requirement is far from fully developed.  Failure to comply can result in a complaint to the U.S. Department of Labor and the risk of enforcement penalties.

Takeaway:  An employer who voluntarily provides pay for otherwise unpaid leaves needs to keep an eye on the USERRA comparability requirement.  A good resource for checking your thinking on comparability is the web page and helpline for the U.S. Department of Defense, Employer Support of the Guard and Reserve Office (ESGR).

Is Employee “Free Speech” A Constitutional Right?

“Free Speech,” or “First Amendment Rights,” is a fundamental concept of modern society, but in the employment context, it has its limitations.

First and foremost, an employee of a private corporation cannot assert that restrictions on the employee’s verbal and non-verbal conduct violate his or her First Amendment rights.  That is for the simple reason that the First Amendment restricts governmental action, not the actions of private individuals or private corporations.  A public employer needs to observe the public employer’s First Amendment rights since it is a government entity.  But for a private employer, the First Amendment has no application.

Only if an employee’s verbal or non-verbal conduct impacts other statutory protections does his or her freedom of speech become an intelligible concept in the employment context.  For example, the NLRB has made clear that private employer restrictions on employee criticism of employers are limited as potential restrictions on the right to protected, concerted activity guaranteed employees under the National Labor Relations Act.  Another example of a “free speech” issue for a private employer would be a restriction on what an employee can or cannot say in response to a suspected illegality or violation of company policy since that could implicate Whistleblower Act protections.  In some cases, certain restrictions on speech could raise discrimination concerns.  But the common variety complaints that an employee may have about employer workplace restrictions on personal discussions, political talk, or other opinions do not fall under the category of constitutionally-protected First Amendment rights.

Takeaway:  When an employer is confronted with an employee complaining that his or her “First Amendment” or “Constitutional Free Speech” rights have been violated, unless the employer is a public employer, the employee has not raised a legal right.  Only if the verbal or non-verbal speech restrictions at issue tie into other employee legally-protected conduct does the concept of “free speech” have any workplace relevance.  If it comes up, the employer should exercise its “right to counsel” and talk it through with an employment lawyer.

Chambers Ranks Briggs and Morgan as a Top Labor and Employment Law Firm In Minnesota For 2015

Chambers recently released its annual law firm rankings, and once again, ranked the Employment, Benefits, and Labor section at Briggs and Morgan, P.A. as “Band 1” for labor and employment law in Minnesota. That is the highest ranking available.

Although all of the attorneys in the Employment, Benefits, and Labor group at Briggs contribute to its success, 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.

May 5, 2015 Presentation – Safeguarding Employers In 2015

On Tuesday, May 5, 2015, attorneys from Briggs and Morgan, P.A. will present “Safeguarding Employers in 2015 – 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 on the 50th floor of the IDS Center in downtown Minneapolis. Continental breakfast and lunch will be provided. CLE and HRCI credits will be applied for. There is no charge to attend.

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 8:40 a.m. – Legislative and Case Update: This session provides an update on legislative activity and court cases that impact the employer-employee relationship. It will cover developments ranging from the passage of the Minnesota Women’s Economic Security Act to employment discrimination cases pending before the U.S. Supreme Court. Pending Minnesota legislation will also be discussed. Presenters: Michael Miller, Danielle Fitzsimmons, and Emily Peterson.

8:40 a.m. to 9:20 a.m. – Labor Law and Why it Matters to Both Union and Non-Union Companies: This session covers new union election procedures, continued attacks on employer handbooks and policies, new case law requiring an employer to allow employees to use employer e-mail for union organizing purposes and a whole host of other issues from the NLRB that continue to make life increasingly difficult for employers. We will also review recent labor law developments that apply to both union and non-union employers and offer practical tips to stay out of hot water with the NLRB. Presenters: Michael Moberg and Michael Wilhelm.

9:20 a.m. to 10:00 a.m. – Security Issues for Employers: Do You Know Where Your Data Is? This session focuses on understanding the risks involved in data breach of various kinds of data and methods to minimize that risk as well as some tips for approaching the matter when data has been lost or misappropriated. Presenters: Heidi Fessler and Daniel Supalla.

10:00 a.m. to 10:15 a.m. – Break

10:15 a.m. to 11:00 a.m. – The Eight Steps of Highly Effective Workplace Investigations: This session is an overview of the key steps in conducting a workplace investigation: deciding whether to investigate, planning the investigation, implementing the plan, evaluating the information, presenting the findings, making recommendations, closing the loop and documenting the process. Presenters: Ellen Brinkman, Ann Huntrods, and Sally Scoggin.

11:00 a.m. to 11:45 a.m. – Challenges and Opportunities in Rapid Demographic Change: This session highlights the unprecedented global demographic changes that are occurring and affect business everywhere. While most attention focuses on aging and its impact on government programs, the more immediate and direct impact of aging and other demographic changes is in the labor market. Former Minnesota State Demographer Tom Gillaspy will focus on the key local, national, and global demographic trends that affect the labor market and their economic implications for Minnesota employers. Presenter: Tom Gillaspy, Former Minnesota State Demographer.

11:45 a.m. to 12:30 p.m. – Lunch

Please RSVP: Space for the seminar is limited. If you plan to attend, please RSVP soon by clicking here.

Executives Moving From The Private to the Public Sector: In Some Ways a Different World

When a senior executive level employee switches jobs between the private and public sectors, what are some of the changes to the norms of employment?

One key difference is the public nature of employment in the public sector – chiefly because public funds are involved.  Salaries and severance payments are public in the public sectors (for example, the controversy du jour about increases in Minnesota state department head salaries) as are contracts and summary performance evaluations.  The State Open Meeting Law governs performance evaluations and investigations.  The State auditor can have access to public employee accounts and expenditures.  Under many circumstances, the factual bases for a disciplinary action or resignation that occurs while a disciplinary matter is pending are public data.  The public nature of public employment can sometimes come as unwelcome news to an executive used to the private world of the private sector.

Other public sector differences are caps on severance payments for public employees.  Highly-compensated employees (earning more than approximately $72,000 a year) are limited to six month’s compensation in severance, all others are limited to one-year severance.  There are exceptions for sick leave and continued insurance payments.  It is safe to say that public sector higher level executives need to have lower severance pay expectations than in the private sector.

But there are also protections in the public sector not found in private employment chiefly due to the application of constitutional rights.  An example would be rights associated with a disciplinary investigation.  A public sector executive has Loudermill due process rights to know and respond to the reasons for a proposed disciplinary action.  He or she has the Tennessen right to know the potential use of all data that can come out of a disciplinary investigation.  There is the Garrity right to be assured that a compelled statement cannot be used in a criminal proceeding.  Paid administrative leaves are more common as the slower public employment investigation process works out.   There are also provisions in the Data Practices Act protecting non-public private personnel data from disclosure and allowing for rebuttal data.  In short, for any public sector executive in difficult straits there may well be better internal protection than given a private sector executive.

Takeaway:  If you are a senior executive employee in the private sector considering a move to the public sector, it would be a good idea to sit down with legal counsel and get a firm idea of what norms will change in the employment relationship.

An Important Change In Minnesota Public Employer Labor Law

In 2014, the Minnesota Legislature amended the Public Employment Labor Relations Act (PELRA) to establish the Public Employment Relations Board (“PERB”) to investigate, hear and resolve unfair labor practice (“ULP”) charges and complaints.  Previously PELRA ULPs were heard by the district courts, chiefly under injunctive relief motions.

In addition to creating PERB, PELRA was amended to include the following with respect to concerted activity:

Concerted Activity.  Public employees have the right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection.  Minn. Stat. § 179A.06, subd. 7.

The establishment of PERB and the concerted activities provision helps to bring Minnesota public employer labor law in line with federal labor law procedures and protections for private sector employees.  For discussion of concerted activity in federal labor law and its impact in the private sector, click here.

Significantly, the amendments also include employees of charitable hospitals and charitable hospitals as public employees and public employers for the purposes of filing and processing unfair labor practice charges.  Minn. Stat. § 179A.03, subd. 14 (a)(8); Minn. Stat. § 179A.03, subd. 15(c); Minn. Stat. § 179A.135.

The basic functions of Minnesota PERB are:

  • Receiving and investigating unfair labor practice charges in the public sector;
  • Where appropriate, issuing complaint on unfair labor practice charges;
  • Appointing a hearing officer to hear complaints issued;
  • Holding hearings on complaints issued;
  • Where appropriate, ordering relief for violations found;
  • Where necessary, petitioning the district court for enforcement of the PERB’s orders;
  • Where appropriate, seeking temporary judicial relief upon issuance of a complaint alleging an unfair labor practice;
  • Hearing appeals of BMS decisions relating to unfair election practices.

Takeaway:  Minnesota PERB will change the process and pace for resolution of ULP charges for all employees of public employers covered by PELRA.  Currently, while a PERB Board is appointed, the rulemaking process is still in early days, so the activation of PERB may still not be for several months.  Ultimately, the amendment will likely help unify public employee and private sector employee labor law processes and protections.

Save the Date – Employment, Benefits, and Labor Law Seminar on May 5, 2015

On Tuesday May 5, 2015, attorneys from Briggs and Morgan, P.A. will present “Safeguarding Employers in 2015 – 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 on the 50th floor of the IDS Center in downtown Minneapolis, and will be followed by a lunch.  The seminar will also feature a presentation from Tom Gillaspy, former Minnesota state demographer.  CLE and HRCI credits will be applied for.  There is no charge to attend.

If you are interested in attending, please RSVP online by clicking here.  Additional details about speakers and topics will be announced soon.

Beyond At-Will: Fiduciary Rights of Shareholder-Employees

At-will employment is a bedrock concept – an employee can be discharged without proof of cause.  The principle exists at all employment levels, from rookie to veteran, from entry-level clerical to senior executive.  The common exception is when at-will employment is altered by a contract with just cause employment provisions, such as a collective bargaining agreement or an executive compensation agreement.  But employers also need to be aware of the limitations that result from the fiduciary obligations between partners or shareholder-employees.

Under the common law of many states, including Minnesota, partners or shareholders of a closely-held corporation owe each other a duty of good faith and fair dealing.  Minnesota courts have held that partners or shareholders of a closely-held corporation may not contract to change their relationship to each another in a manner that will “destroy its fiduciary character.”  Appletree Square I Limited Partnership v. Investmark, Inc., 494 N.W.2d 889, 893 (Minn. Ct. App. 1993).  In a closely-held corporation, shareholder-employees may have a reasonable expectation of continued employment and termination only for cause.  This legal concept is different from basic employment law wrongful termination – it is the more arcane concept of employment-based shareholder oppression.  It captures the idea of protecting a shareholder’s investment and reasonable expectation in ongoing employment in a closely-held corporation.  It is a complex doctrine with its own exceptions, but one clearly recognized by the courts.  See, e.g., Gunderson v. Alliance Computer Professionals, 628 N.W.2d 173, 192 (Minn. Ct. App. 2001).

Takeaway:  When dealing with a shareholder-employee, the concept of at-will employment and its basic contractual exceptions may not be sufficient to fully appreciate all legal rights involved in a termination.  Employment-based shareholder oppression is a living legal principle that, while found deep in the pages of the common law, can control the outcomes and resolutions of important employment termination matters.  Good legal counsel will be an important guide to this employment concept that goes beyond the at-will doctrine.

Accommodating Employee Religious Practices: A Nuanced Matter

With Hobby Lobby and other prominent cases making religion and the workplace part of the current public discourse, many employment lawyers expect a heightened interested on employees’ and applicants’ parts in claims of religious discrimination in the workplace.  As that occurs, employers need to bear in mind some essential legal facts and an important nuance.

Both the federal Civil Rights Act Title VII and the Minnesota Human Rights Act (MHRA) prohibit employment discrimination based on an employee’s religious beliefs and practices.   An employer cannot compel religious practices and under certain circumstances cannot prohibit them.  The protections are not limited to the doctrines of organized religions but can include personal spiritual beliefs and atheistic convictions.  In essence, the statutes and interpretive case law require employers to permit employees to practice their religious faith during the work day if such practices do not interfere with job requirements or the rights and job performance of co-workers.  Designated prayer areas, permitted workspace decorations and dress code variances can all come under the rubric of such accommodations.  There can often be some touchy situations requiring careful legal review and guidance.

However, unlike the reasonable accommodation requirements of the Americans with Disabilities Act, the accommodation of employee religious practices are required only so long as the accommodation does not cause more than a “minimal burden” on the operations of the employer’s business.  That is, the EEOC’s general standard for determining undue hardship is whether accommodation of the employee’s religious practices causes the employer to incur greater than minimal costs – which has been defined by the EEOC as “more than ordinary administrative costs.”  For example, an employee’s desire to observe religious days may not require disrupting the employer’s standard shifts and workplace operations when accommodation of a disability may so require.  The courts and the EEOC also recognize particular latitude in the employer’s response by way of offered accommodation and require that the employee clearly articulate his or her religious beliefs and requested accommodation since religious affliction is not necessarily self-evident, such as membership in other protected categories.

Takeaway:  For religious accommodation requests and discrimination claims, employers have certain protections and the law has certain nuances that can differentiate the situation from other types of discrimination problems.  With a societal focus on religious rights and the workplace, employers and counsel need to carefully bear this difference in mind.

Good for Goose/Good for Gander: Some Tips on Partnership Agreement and Employment Rights

When a partnership forms, expands or changes, the partners must legally define many aspects of their relationships, including employment and post-employment rights.  To do so successfully, it is important to analyze the topics from two points of view: that of the employer and that of the employee, because a partner is both.

For example, stringent post-employment constraints may seem like a good idea from the employer point of view, but if one day you are the departing partner, what restraints would you think are fair and necessary?  What can you reasonably enforce?

Also, the partner as employer may like an at-will employment clause, but does he or she want to be subject to such minimal employment rights?  It could happen.  And how does such a clause square with partnership rights and expectations under Minnesota statutes and common law?

And, what about buy-out rights and procedures?  Many a costly partnership battle stems from vague or inequitable buy-out agreements and many a partnership has been damaged or disbanded by too generous and too immediate buy-out provisions.  Under Minnesota law, the court will generally base buy-out processes and procedures upon the parties’ written agreement – you sign it, you live with it.

Takeaway:  In drafting or updating a partnership agreement, the partners should be of two minds – employer and employee.  Legal counsel will be important in helping strike the “good for the goose/good for the gander” balance and create a fair, workable, and enforceable partnership agreement.