Author Archives: Sally Scoggin

Impairments and Health Professionals: What’s an Employer to do?

Health professionals, including physicians, dentists, nurses, paramedics, pharmacists, psychologists and social workers, are far from immune from chemical dependency, mental illness, and other conditions that impair their ability to do their jobs. When an impairment leads to poor performance or misconduct, health care employers, like other employers, must analyze  whether discipline, a reasonable accommodation, or another approach is warranted. But they do so in a highly regulated environment, where patient health and safety are paramount.

Where the health professional is licensed, the employer and other involved professionals may have duty to report the facts to a professional licensing board or, as discussed below, to a diversion program. Employers of physicians and registered nurses, for example, are to report certain: (a) actions taken by the institution to revoke, suspend, or limit the professional’s privilege to practice; (b) disciplinary actions; or (c) resignations by professionals before investigations are concluded. See Minn. Stat. §§ 147.111 and 148.263.  Each of the licensing statutes for the many licensed health professions is different, but many contain some form of mandatory reporting. Some require reporting from the employer and others require reporting only from licensed professionals. Many contain protections from liability for those making a report.

A reporting to a licensing board may not be the only required report. Depending on the circumstances, an employer may have other reporting obligations — for example to the Department of Health, to a welfare agency or common entry point for issues involving minors or vulnerable adults, to the DEA, or to the Board of Pharmacy among others.

As to licensing board reports, typically, once a report is made, the board will investigate and, depending upon the outcome of the investigation, may enter into a corrective action agreement with the professional, or proceed to revoke, suspend or condition the license of the professional, or take other disciplinary action. The public nature of disciplinary actions has led to concerns that some situations might go unreported, and leave impaired professionals in practice, and without monitoring, practice restrictions, or treatment, thus posing ongoing risks to public safety.

Minnesota has developed a program to address at least some of these issues.  The  Health Professional’s Service Program (HPSP) typically provides referrals for evaluation and treatment and develops an agreement with the professional that may include health and work place monitoring, practice restrictions, random drug screening, support group participation, and requirements regarding documentation of compliance. Generally, health professionals are eligible to participate in HPSP if they are licensed by a participating board and are “unable to practice with reasonable skill and safety by reason of  illness, use of chemicals, or as a result of a mental, psychological or physiological condition.”  They are unable to participate, however, if they have been noncompliant in the past, are already under a disciplinary action, were accused of sexual misconduct, are believed to create a serious risk of harm if they continue to practice, or if they have diverted controlled substances other than for their own self administration.  The HPSP statute currently provides that a report to HPSP fulfills the requirement that a report be made to the licensing board under that professional’s practice act.  See Minn. Stat. § 214.29.  Employers should note, however, that bills were introduced in the Minnesota House and Senate in the current session (see H.F. No. 1604 and S.F. No. 1181) that would require employers to report knowledge of diversion of narcotics or controlled substances to the appropriate licensing board and provide that reporting to HPSP alone would not be sufficient. 

Takeaway:  It is important for employers to review each circumstance carefully and fully understand their reporting and other obligations in dealing with a health professional whose impairment has or may lead to problems in the workplace. Employers should take action to protect public health and safety while also fulfilling their obligations as an employer to the affected professional.

Proposed Legislation Threatens to Ban Most Non-Competes in Minnesota

A bill has been introduced in this session in the Minnesota Legislature that would make most non-compete agreements in Minnesota void, including those between employers and employees.  The bill, HF 506, contains exceptions for certain business transactions, but even those exceptions are very limited.  The proposed bill would be codified at Minn. Stat. § 325D.72 and provide as follows:


A contract that prohibits a party to that contract from exercising a lawful profession, trade, or business is void with the following exceptions:

(1) a seller of a business’ goodwill can agree to refrain from carrying on a similar business in a specified county, city, or part of one of them if the buyer carries on a like business in that area;

(2) partners dissolving a partnership can agree that one or more of them will not  carry on a similar business in a specified county, city, or part of one of them where the partnership transacted business; and

(3) a member, when dissolving or terminating their interest in a limited liability company, can agree that the member will not carry on a similar business in a specified county, city, or part of one of them where the business has been transacted if another member or someone taking title to the business carries on a like business in that area.

The authors of the bill are Representatives Joe Atkins (District 52B) and Alice Hausman (District 66A).  The bill has been referred to the Committee on Labor, Workplace and Regulated Industry.

Under current law in Minnesota, while courts scrutinize non-compete agreements carefully, employers and employees can agree to reasonable restrictions on a departing employee’s ability to compete with the employer. To be enforceable, such agreements must be: (i) supported by consideration; (ii) reasonable as to time and geographic scope; and (iii) limited so as to be reasonably calculated to protect the employer’s legitimate business interests.

Many businesses in Minnesota rely on non-competes to protect their investments in research, confidential information, relationships, training, and goodwill, and to prevent departing employees from turning around and using those assets to compete against the company.  HF 506, if passed, appears to ban that practice, although it is not entirely clear what the bill’s language concerning “exercising” a trade or business means.

The proposed bill’s exceptions for certain business transactions are extremely narrow.  For example, they only allow a seller of a business to agree not to compete in a specified county or even smaller area.  Presumably, an agreement prohibiting a seller from competing regionally or nationally would be void, even if the company does business regionally or nationally.

Takeaway:  If passed, HF 506 would arguably prohibit employers from entering into non-competes with their employees and, potentially, make current non-competes void.  Even in the sale-of-business context, the proposed legislation may restrict a buyer’s ability to protect newly acquired goodwill and relationships.  Employers should keep a close eye on this bill.  We are happy to discuss with you the potential effects on your business.

New Statute Provides for Voluntary Veteran’s Preference in Hiring and Promotion

A newly enacted Minnesota statute provides that a “private nonpublic employer” may grant a preference to veterans in hiring and promotion.  See S.F. No. 1599.  A preference may also be granted to the spouses of certain disabled veterans or the surviving spouse of a deceased veteran.  The term “veteran” under the statute includes those who are honorably separated from the armed forces and who have met certain active duty criteria.  The bill was cited as one of a number of measures to expand opportunities for veterans and address an extremely high unemployment rate for veterans.

Minnesota law has long required public employers to grant preferences to veterans in hiring and promotion and, with some exceptions, prohibits public employers from removing veterans from their positions except for incompetency or misconduct after a hearing.  See Minn. Stat. § 197.455.  The new law is permissive rather than mandatory for private employers, although all employers should continue to keep in mind any other obligations they may have, including those to rehire veterans under the Uniformed Services Employment and Reemployment Rights Act (“USERRA”).

The new law addresses hiring and promotion, but not removal from a position.  It expressly states that granting a preference will not violate local and state human rights laws.  That language should protect employers from claims that granting a preference in hiring or promotion constitutes gender or age discrimination under the Minnesota Human Rights Act.  The new law does not, however, expressly override other claims, including those under federal equal employment opportunity laws.  Whether it will be interpreted as precluding those claims is unclear at this point.  In the past, purely voluntary preferences, have been subject to challenge under Title VII and certain other federal laws, while several challenges to preferences granted as required under state veteran’s preference statutes have been rejected.

Takeaway: Public and private employers should be aware of the statutory protections and opportunities existing for veterans, including USERRA and the existing Minnesota Veteran’s Preference statute.  Private employers considering granting a preference to veterans in line with the new law, Minn. Stat. §197.4551, should make sure that the grant is also in compliance with any other obligations they may have, including obligations under collective bargaining agreements and federal law.

When is Drug and Alcohol Testing Permissible Under Minnesota Law?

In Minnesota, employers may conduct drug and alcohol testing only if they follow certain rules.  The Minnesota Drug and Alcohol Testing in the Workplace Act says that testing may only be done:

  • For job applicants, but only where a conditional offer has been made and testing is required for all applicants for that position;
  • As part of an annual routine physical examination;
  • On a random basis, but only if the employee is in a safety sensitive position or is a professional athlete and the testing is conducted in accordance with a collective bargaining agreement;
  • Where an employer has ”reasonable suspicion” that the employee is under the influence; has violated written work rules regarding drugs or alcohol, has caused a personal injury or caused a work related accident, or was involved in operating machinery involved in a work related accident; and
  • Where the employee is involved in chemical dependency treatment after being referred by the employer or under an employee benefit plan.

See Minn. Stat. § 181.951.

To conduct testing, an employer must have a written policy that describes who is subject to testing, the circumstances under which testing will be done, the right of any employee or applicant to refuse testing and the consequences, any adverse action that may be taken on test results, the right of employees and applicants to explain positive results and the right to request and pay for confirmatory retests.  See Minn. Stat. § 181.952.

The statute contains certain notice and posting requirements.  Employees have the right to request copies of test results, to have confirmatory retests at the employee’s own expense and to explain test results that may be the result of prescription medications or other information that is relevant to the reliability of a positive test result.  Employers may not discharge employees on a first positive test result unless the employee has first been given the chance to participate in a counseling or rehabilitation program and the employee has either refused to participate or failed to successfully complete the program.  With limited exceptions, test results are to be kept confidential.  See Minn. Stat. § 181.953; see also Minn. Stat. § 181.954.

Takeaway:  Any employer conducting drug or alcohol testing in Minnesota must have a written policy and carefully follow the rules related to such testing.