Author Archives: Neal Buethe
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” – the highest ranking available – for labor and employment law in Minnesota.
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.
Minnesota Discrimination Law Development: New Statute Provides a Right to a Jury Trial in Discrimination Cases
Governor Dayton recently signed a bill into law that allows a plaintiff who has brought a discrimination action under the Minnesota Human Rights Act (MHRA) to have a jury trial. See S.F. 2322. The new law takes effect on August 1, 2014.
Until now, MHRA claims were by court trial only, although many judges used advisory juries – especially when the MHRA clam was brought along with other common law claims. Because the MHRA created state a cause of action with unpredictable implications at the time it was adopted, the court-trial requirement was a legislative compromise to counteract unintended results. But that was decades ago, and there has been much development and stabilizing in state discrimination law. Indeed, the right to a jury is fundamental to the Anglo-American legal tradition, so it is not a surprise that it has now caught up with the MHRA.
This change is important to Minnesota employers. A court trial was often a more cost-effective and predictable way to defend against an employment discrimination claim. Court trials are usually shorter than jury trials and decided by a court based upon submitted findings and conclusions. Frankly, there is less of a chance for emotion or prejudice to sway a decision.
But it was not all advantages. For instance, it was often more difficult for a Court to push for settlement prior to or during trial since the Court itself was the finder of fact. Furthermore, summary judgment motions were often more difficult to bring because courts were reluctant to dismiss matters that they themselves would otherwise hear and decide at a brief trial, which would establish a narrower standard of appellate review.
Takeaway: This new law is an important development with both “pros and cons,” which employers and their legal counsel should review when defending existing and potential employment discrimination claims. Cost-risk analysis in any discrimination claim will likely need to be reviewed and perhaps revised. But the best response will be increased care in making employment decisions and the development of a strong record of defense. Ultimately, it is the evidence not the process that controls the outcome of a discrimination case. To borrow from Gilbert and Sullivan, you really can never “throw dust in a jury’s eyes or hoodwink a judge who is not over-wise!”
NewsFlash for Non-Profit Employers: The Rebuttable Presumption of Reasonableness May Disappear or Change
In a recent presentation to the Georgetown Law Center Tax-Exemption Organization Conference, staff members to the Senate Finance and House Ways and Means Committees reported on some proposals for legislation that would have a legal impact on larger non-profit employers in the realm of senior executive compensation.
Large non-profit employers need to exercise care in determining compensation of senior executives in order to avoid intermediate sanctions. In essence, such employers currently need to use compensation consultants to establish a “rebuttable presumption of reasonableness” to be assured that the IRS will not find such compensation to constitute an excess benefit.
Currently on Capitol Hill, there is a legislation proposal to eliminate reliance on the rebuttable presumption and compensation consultants. The proposal would impose a 10% excise tax on the organization itself (not just disqualified persons and organizational manager) if the executive compensation is deemed excessive under an IRS “facts and circumstances” test. This would be a substantial change in intermediate sanction law and non-profit employer compensation processes.
On an additional note, floating around Capitol Hill is a proposal for a 25% excise tax on exempt organizations for executive compensation over $1,000,000 – which is rare, but out there. It would include defined compensation payments. Lookout senior health care executives, university presidents, and Big 10 coaches!
Takeaway: Keep an eye on these potential legislative developments affecting non-profit employers. Minnesota Employer will keep you informed, of course!
Thanks to the over 100 busy professionals who spent a half-day with your Briggs Employment, Benefit and Labor Team in the 2014 “Safeguarding the Employer” client seminar held on April 10th. And a special call-out to our guest speaker Brian McClung of McClung Communications and Public Relations for his presentation on crisis management.
The seminar covered the following topics:
- “Legislative Overview for 2013 and 2014”
- “The NLRB is Back At Full Strength – And Employers Should Be Concerned”
- “Introducing the Elephant in the Room: How Discovery Impacts You”
- “Employee Benefits Update”
- “The ADAAA Aftermath” (including our Temporary Disability Chart)
- “Communicating Effectively in a Crisis”
If you weren’t able to make the seminar this year but would like the materials, please let Dena Edmiston know at 612-977-8581 or [email protected] or contact a Briggs attorney in the Employment, Benefits and Labor section (for contact info, click here).
We’ll be presenting again in 2015 and, of course, we are at your service in the meantime.
Neal Buethe, Section Head
Briggs and Morgan’s Employment, Benefits and Labor Law section
“Be Nice” is acceptable in the sand box, but perhaps not in an employer handbook, according to a recent National Labor Relations Board (NLRB) ruling. See Hills and Dales General Hospital, 360 NLRB No. 70 (April 1, 2014 – it was not an April Fool’s joke).
In the matter before the NLRB, the employer hospital issued employee standards of conduct that prohibited “gossip” or “negative comments” about fellow team members and required that the employee represent the employer in a “positive and professional manner.” These seemingly innocuous rules of basic social interaction did not survive the NLRB scrutiny because they could, according to the NLRB three-member majority, be construed by employees as interfering with their National Labor Relations Act (NLRA) rights. Under Section 7 of the NLRA, employees have rights to engage in protected concerted activities for their mutual aid or protection relating to the terms and conditions of employment. The NLRB held the employer’s “be nice” rules could inhibit criticism among employees of management and attempts to address terms and conditions of employment. There was a strong dissent. The ruling affects all employers, not just collective bargaining situations.
Takeaway: The NLRA’s protection of concerted activities related to the terms and conditions of employment can work unexpected results. When reviewing handbook provisions and employer policies on employee communication and interaction, this protection needs to be part of an employer’s review checklist. This is even more the case if the employer needs to take disciplinary or corrective action. It is a good idea to work with legal counsel to make sure there is no reasonable chance of interfering with NLRA concerted protected activities when drafting or enforcing policies requiring employees to “be nice.”
Let’s say you are conducting a disciplinary investigation and have called in the employee at issue who, before you say anything, states “I want my Weingarten rights” – what is the employer to do? Employers not familiar with the term may feel like they have walked into a TV cop show.
Unlike Miranda (a la cop show) rights, Weingarten rights are limited in scope and application. Weingarten rights were established in a 1975 U.S. Supreme Court case, NLRB v. J. Weingarten, Inc., that made it an unfair labor practice under the National Labor Relations Act (NLRA) to ignore a properly made employee request to have a fellow union member present at an investigative interview that could result in employee discipline. 420 U.S. 251 (1975). Upon such a request, the employer must allow a union representative to be present (under certain controlled, non-adversarial rules) or discontinue the interview. Whether this NLRA procedural right applies to non-union employment has varied over recent administrations and changes in the NLRB (Carter – yes; Reagan – no; Clinton – yes; Bush – no; Obama – no change so far). These fluctuations in NLRB position can certainly create confusion.
Under the current law, if the employer facing the Weingarten demand is not dealing with a request from a union-represented employee, then the request is of no legal force and effect. If it is a union situation, then it is “full stop” requiring careful adherence to the Weingarten rule and NLRB guidance regarding how to respond to the request. Of course, nothing stops the “at-will” employer from voluntarily allowing a co-worker to be present at an investigative interview, although those situations should probably be rare, non-precedential, and carefully thought-out — likely with advice of counsel.
Takeaway: Just because an employee says “Weingarten” doesn’t mean that the employer needs to change course in an investigative interview. At the threshold is the determinative question of whether the investigation involves a unionized employee. Only then do somewhat complicated Weingarten rules apply to an investigative interview. But care is necessary – you never want the NLRB to say “Book’em, Dan-O” to you!
As the 2014 Minnesota Legislature comes into session, Minnesota Employer will keep you informed of bills that may affect the employer-employee relationship.
One such initiative will likely be a push to increase the Minnesota minimum wage. The initiative stalled in 2013, but many analysts and business chambers believe it will be renewed and passed into law in 2014. In 2013, the House bill would have increased the minimum wage to $9.50 an hour and tie automatic future increases to inflation. The Senate bill would have increased the minimum wage to $7.75 an hour. The federal minimum wage is $7.25, so if there are same or similar state law increases in 2014, they will trump the lower federal minimum wage.
Many employers object to the economic consequences of an increase in state minimum wage, of course. Some ameliorating proposals supported by some trade organizations are:
- A “Youth Wage” for employees under 18. This would set a lower minimum wage for a class of workers who, on the norm, are earning “first job” income.
- No city or county preemption: State law (the Minnesota Fair Labor Standard Act or “MFLSA”) would be state-wide and metropolitan area local governments could not create a separate, higher minimum wage.
- No automatic inflation adjustment.
- Tipped employee tier law: Unlike a “Tip Credit” by which employee tips are added to the employee compensation to determine actual, MFLSA wages, a tiered system works somewhat differently. Under this proposal, a tipped employee would still be paid the current minimum wage, and a “tier” would be set that would be higher than the new minimum wage. If the employee’s current minimum wage and accumulated tips meet the tiered number, the current minimum wage remains in place.
Takeaway: Minimum wage law will likely be the subject of important legislation in 2014. Minnesota Employer will keep you informed.
The answer is “yes, but . . .”: Over the years, the federal courts have stretched the scope of the Federal Arbitration Act to allow an employer, by a proper arbitration agreement, to compel the arbitration of discrimination claims brought under Title VII, the ADEA, the ADA, and the Equal Pay Act. Arbitration can provide a much faster and more cost-effective way to address these often volatile and expensive claims. These claims may be covered by a broader arbitration provision in an employment agreement. Arbitration can be a significant advantage to the employer.
Why the “but”? Courts have refused to recognize arbitration provisions in employment discrimination claims in certain circumstances; for example, when countervailing factors exist such as:
- Lack of mutuality – e.g., the arbitration clause applies to the employee but not the employer’s counter-claims.
- Inclusion in the employee handbook only – if the handbook is not a contract and there is no legal consideration for the agreement.
- Ambiguity – inclusion of discrimination claims need to be specific, not inferred.
There are other exceptions as well, and it’s important to note that an arbitration clause generally cannot prevent an employee from filing a charge of discrimination with the EEOC. But a mandatory arbitration requirement for federal discrimination claims can be established by an employer if drafted and implemented correctly.
Takeaway: An employer should give serious consideration to adopting agreements that allow for the mandatory arbitration of federal discrimination claims. The process of getting there has its legal complexities, but it may be well worth seeking legal counsel for analysis, advice, and drafting.
In a widely anticipated move, the National Labor Relations Board (NLRB) announced on February 5, 2014 that it was again proposing revised union election rules to dramatically shorten the timeframe to conduct union elections. According to the NLRB, the proposed rules are virtually identical to the changes that the NLRB originally proposed in June of 2011 and adopted in November of 2011. The 2011 proposed changes were challenged by various employers and employer groups as unlawful, and the District of Columbia District Court invalidated the proposed changes in May 2012. The appeal of that ruling was put in abeyance in February 2013, pending the Supreme Court’s Noel Canning decision on the NLRB’s broader lack of quorum issues.
Following the full Senate confirmation of all 5 NLRB members late last year, the NLRB dropped its appeal and withdrew the 2011 proposed rule, setting the stage for the newly proposed rule announced in a press release on February 5, 2014. The new rule was published the next day, on February 6, 2014, and is available here. The NLRB has invited comments on its proposed rule changes. The NLRB will hold a public hearing on the issue during the week of April 7, 2014. Additionally, while the NLRB said it will consider the 65,000 public comments previously submitted in 2011, interested parties may submit comments on the proposed rule changes until April 14, 2014.
Essentially, the NLRB’s proposed rule changes will make it much harder for employers to defeat a union in an election. The proposed rule would wreak havoc with the current union election process as it dramatically shortens the timeframe between the filing of a union election petition and the election. Some of the major changes proposed include the following:
- Elections are expected to occur within 10 to 21 days after a petition is filed rather than the current 42-day time period.
- Most disputes about issues such as which employees are eligible to vote in an election, including whether an employee is a statutory supervisor and part of management and therefore ineligible to vote, will now be left until after the election is over instead of being addressed before the election.
- A pre-election hearing to resolve any disputes about which job classifications should be covered by the election and whether the election will include multiple employer locations will also occur much faster, usually within 7 days of the filing of a petition instead of the current practice of holding these hearings within 14 days of the filing of a petition.
- Employers will be required to provide the union involved in a petition with a list of its employees, work location, shift and job classification by the time of the pre-election hearing.
- Once the election has been scheduled by the NLRB, employers will have only 2 days, rather than the current 7-day period, to give the union an alphabetized list of all voters that has the voters’ home address, email address, and phone number.
- Finally, any disputes about the election must be heard by the appropriate regional NLRB office within 14 days of the election, and appeal to the NLRB will be discretionary, instead of mandatory.
It is difficult to understand the need for these changes. Unions have been winning over 60% of all union representation elections for most of this century. In fiscal year 2013, unions won 64% of all union elections conducted, and for the past 4 years, elections were held in a median of 38 days after the filing of a petition.
John Kline (R-MN), Chairman of the House Education and the Workforce Committee, and Phil Roe (R-TN), Chairman of the Subcommittee on Health, Employment, Labor and Pensions, have already denounced the NLRB’s proposed rule in a press release. They stated that “this ambush election scheme will make it virtually impossible for workers to make an informed decision in union elections,” and that “this flawed proposal will stifle employer free speech and worker free choice, and that the only entity that stands to gain is Big Labor.”
It is a virtual guarantee that there will be a legal challenge mounted by employers and various employer groups and trade associations once the NLRB issues a new final rule following the public comment period. Whether the NLRB will suspend implementation of the rule pending any legal challenges, or whether a court will enjoin implementation of the rule pending the final outcome of any legal challenges, is yet to be determined. Suffice it to say that the union elections and the NLRB are going to remain hot topics in the news and in the courts for the foreseeable future.
Takeaway: The NLRB’s proposed rules will make it much more difficult for employers to resist union organizing attempts. Employers will have very little time to train supervisors regarding how to lawfully deal with union organizing once an election petition is filed with the NLRB. More importantly, less time than ever before will be available to explain the facts about unions to employees so that employees can make a fully informed decision about whether a union is necessary or desirable in the workplace. Employers that want to remain union-free need to be proactive rather than reactive. Now is the time to start focusing on union prevention efforts and to make sure that supervisors are trained on the do’s and don’ts of dealing with union organizing. Stay tuned as we will keep you posted on the latest developments.
President Obama’s State of the Union Address highlighted several legislative initiatives that potentially affect the employer/employee relationship. Two of the more noteworthy are:
- Supporting workplace fairness for women by passing the Paycheck Fairness Act, which would strengthen the Equal Pay Act; and
- Advancing workplace equality for Lesbian, Gay, Bisexual, and Transgender (LGBT) workers by adding sexual orientation and gender identity to the list of statuses that are federally protected from employment discrimination. The Employment Non-Discrimination Act, which has passed the U.S. Senate, but not the House of Representatives, would provide such federal protections for LGBT workers.
The Equal Pay Act (EPA), once a dominant force in federal anti-discrimination law, could well be revitalized if President Obama’s Paycheck Fairness Act strengthens the EPA. Some argue that the EPA, which protects against gender-based discrimination in pay, has been weakened by the Court-expanded exception for “differential factors other than gender.” The Paycheck Fairness Act would try to close or narrow this loophole by requiring such a factor to be strictly job-related and increasing the level of proof required. An old lion may roar again.
The expansion of Title VII protection to LGBT workers would be a significant broadening of federal anti-discrimination protection. But employers should recall that sexual orientation and gender identity discrimination are already prohibited by many state laws, including the Minnesota Human Rights Act, so proactive measures already in place may make a change in federal protection of lesser impact in some states than it may be in other states.
Takeaway: The President’s State of the Union Agenda was decidedly domestic in its focus, and federal discrimination protection is a traditional domestic policy point. Indeed, both of the legislation initiatives discussed above have been tried and defeated in the legislative process in this and previous administrations. But their renewal has the potential of a real impact on employment law. Minnesota Employer will keep you updated.
Minnesota employers are now dealing with a series of significant changes in the state whistleblower law. Suffice it to say, the statutory changes (which came with little forewarning or employer input, but now are getting significant attention) make it much easier for a current or former employee to assert whistleblower claims for a greater range of conduct and lower obligations of proof.
But the fundamental elements of a whistleblower claim and employer response have not changed. First, the employee must have engaged in protected activity (although that has now been broadened in scope to include reports of common law claims, among other things). Second, there needs to be an adverse employment action (although that has been broadened to include “penalizing” an employee). Third, there needs to be sufficient evidence of a causal connection between the alleged protected activity and the adverse employment action, including employer knowledge of the protected activity and a reasonable proximity in time between the alleged protected conduct and the adverse employment action.
Takeaway: For Minnesota employers the whistleblower “times are a-changin,” but the fundamental elements of the claim hold firm. These elements provide the basic framework for an employer and its legal counsel when responding to a potential whistleblower matter or defending against a whistleblower suit.
This is not the “battery” or “assault” in your flashlight or next to the pepper shaker. The “battery” and “assault” that employers need to understand in the HR context has to do with actual or threatened physical misconduct allegations in the workplace. When an upset employee presents such a complaint, use of the term “assault” or “battery” in the investigation report or management discussions requires precision. Employers can potentially be vicariously liable for an assault or battery that occurs in the workplace if it was reasonably foreseeable and occurred at or in relationship to the workplace. Damages for assault and battery may not be covered by workers compensation exclusive remedy provisions. Potentially, there could also be defamation issues as well and unemployment compensation implications. So understanding the precise definition of these common terms is important.
In essence, an “assault” is an intentional act made with intent to cause reasonable apprehension or fear of immediate harmful or offensive physical contact. A “battery” is intentional, unpermitted physical contact.
Many actions that are sometimes given the inflammatory and legally relevant characterization as a “battery” or “assault” are not. For example:
- There needs to be intent. A negligent physical act cannot be an assault or battery.
- The maxim “words will never hurt me” applies – strong words or threats alone are not an assault or battery – unless they are exhibited with such anger as to provide the reasonable apprehension that can sustain an assault.
- There is an element of reasonableness in a reported assault as well as a question of permission in the context of a battery that should be part of an investigation.
Takeaway: Reports of alleged “assaults” and “batteries” in the workplace are often communicated in an emotional and upset atmosphere. The employer should keep in mind the technical, legal definitions of these terms in the investigation, response, and reporting process.