Category Archives: Public Interest

“Pre-emption”: On a One-Way Ticket to Nowhere?

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.

Duty to Indemnify Bars Negligence Claim for Damages

Employees will on occasion negligently perform their duties and as a consequence can often be discharged. But what about any damages caused by their negligence? Who pays the bill for that?

This issue was recently decided by the Minnesota Court of Appeals which held that the employer was not allowed to seek damage payment from the employee. First Class Valet Services, LLC v. Gleason, No. A16-1242 (Minn. Ct. App. March 20, 2017).

In First Class, the employee twice negligently caused damage to customer cars in his position as a parking valet. After reimbursing the car owners for their damages, the company filed a negligence lawsuit against the employee seeking to recover those payments. While prior Minnesota common law suggested that an employer could bring a claim against an employee to recover such payments, the Minnesota Court of Appeals determined that the valet company’s claim was barred by its duty to indemnify the employee for the negligent performance of his duties.

In 1993, the Minnesota Legislature enacted Minn. Stat. § 181.970 which generally requires an employer to defend and indemnify its employee against damages if the employee was acting in the performance of his duties. Although this statute did not expressly abrogate the common law rule, the First Class court held that the common law was indeed abrogated by necessary implication. The court reasoned that indemnification means to “hold harmless” in all respects and that permitting the employer to bring a claim against the employee might lead to the absurd result of the employee circularly seeking indemnification from the company regarding its own claim.

Takeaway: If a claim for damages results from an employee’s negligent performance of his or her job duties, and the employee is not guilty of intentional misconduct, willful neglect of the duties of their position, or bad faith, then the employer is statutorily obligated to indemnify the employee. As a result, an employer claim against the employee to recover payment of those negligently caused damages is barred by the duty to indemnify.

The Next Wave: Minnesota Metro and the $15 Minimum Wage

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.

Look Out St. Paul Employers: Here Comes the ESST!

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!

Reminder: New I-9 Form Beginning January 22, 2017

Happy New Year! As a reminder of a previous post, employers must use the new I-9 form beginning January 22, 2017. A copy of the original post is below:

On November 14, 2016, the U.S. Citizenship and Immigration Services (USCIS) published a new Form I-9. The following are key changes in the revised form:

  • The new form is available in paper or hardcopy form or in a fillable computer form.
  • Completion of the form on a computer is now enhanced by prompts, drop-down menus and calendars.
  • While this new “smart” form makes completion on a computer easier, the form as provided cannot be electronically signed. Instead, it must be printed for signature.
  • The instructions for completion have been separated from the form itself. Employers should not forget to make the instructions available to employees when they are completing Section 1.
  • The form is a bit longer. The reformatting created a new “Additional Information” space in Section 2 in which employers can note comments that were previously squeezed into margins.
  • A separate page has been created for the preparer and/or translator certification and may be completed by multiple individuals.

Beginning January 22, 2017, employers must only use the new form. In the meantime, employers may use either the prior or new version.

Takeaway: The USCIS has published a new Form I-9 which MUST be used as of January 22, 2017. Employers should familiarize themselves with the new form and plan for implementation.

New Form I-9 Released

On November 14, 2016, the U.S. Citizenship and Immigration Services (USCIS) published a new Form I-9. The following are key changes in the revised form:

  • The new form is available in paper or hardcopy form or in a fillable computer form.
  • Completion of the form on a computer is now enhanced by prompts, drop-down menus and calendars.
  • While this new “smart” form makes completion on a computer easier, the form as provided cannot be electronically signed. Instead, it must be printed for signature.
  • The instructions for completion have been separated from the form itself. Employers should not forget to make the instructions available to employees when they are completing Section 1.
  • The form is a bit longer. The reformatting created a new “Additional Information” space in Section 2 in which employers can note comments that were previously squeezed into margins.
  • A separate page has been created for the preparer and/or translator certification and may be completed by multiple individuals.

Beginning January 22, 2017, employers must only use the new form. In the meantime, employers may use either the prior or new version.

Takeaway: The USCIS has published a new Form I-9 which MUST be used as of January 22, 2017. Employers should familiarize themselves with the new form and plan for implementation.

Minnesota Supreme Court Rejects Minneapolis Minimum Wage Ballot Initiative

On August 31, 2016, the Minnesota Supreme Court issued an order agreeing with the Minneapolis City Attorney that a ballot initiative could not be used to enact a new minimum wage in the City of Minneapolis.

In late July of this year, the Minneapolis City Attorney issued a legal opinion that concluded that a petition with 20,000 signatures in support of a ballot initiative to amend the City Charter to include a $15 minimum wage was not a proper subject for a ballot initiative.  Following the City Attorney’s advice, the City Council agreed not to include the ballot initiative on the ballot for the upcoming election in November.  Labor activists then challenged the City’s position in Hennepin County District Court.  Last week, the district court disagreed with the City and ruled that the $15 minimum wage should be included on the ballot in this November’s election.  The City appealed the district court’s decision.

On appeal, the Minnesota Supreme Court reversed the district court and sided with the City.  The Court reasoned that city charters may or may not provide for the enactment of an ordinance through the ballot initiative and that the Minneapolis City Charter does “not authorize the proposed charter amendment.”  Vasseur et al. v. City of Minneapolis, et al., No. A16-1367 (Minn. Aug. 31, 2016).

Takeaway:  The $15 minimum wage ballot initiative for the City of Minneapolis will not appear on the ballot this November.

Eighth Circuit Court of Appeals Reinstates NFL’s Punishment of Adrian Peterson

The NFL’s 2014 punishment of Adrian Peterson has been a rollercoaster ride.  After a district court vacated the punishment, the Eighth Circuit Court of Appeals has now reinstated it.

The NFL suspended Peterson and fined him the equivalent of six games worth of pay after he entered a plea of no contest in November 2014 to a misdemeanor charge of reckless assault against one of his children.  Peterson challenged the punishment under the NFL Players Association’s collective bargaining agreement, but an arbitrator initially upheld the punishment as valid.

Next, Peterson challenged the decision in federal court.  Because federal courts are generally very deferential to arbitration decisions, Peterson had a difficult legal standard to meet to vacate the decision.  However, in February of 2015, the district court agreed with Peterson and vacated the punishment on the grounds that:  (i) the punishment violated the collective bargaining agreement because it applied a new NFL personal conduct policy retroactively in violation of a previous decision regarding Ray Rice; and (ii) the arbitrator exceeded his authority by considering whether the punishment could be sustained under the NFL’s previous personal conduct policy.  The NFL then appealed the district court’s order to the Eight Circuit Court of Appeals.

In National Football League Players Association v. National Football League, the Eighth Circuit Court of Appeals reversed the district court and reinstated the NFL’s punishment of Peterson as valid.  No. 15-1438 (8th Cir. August 4, 2016).  In reaching this decision, the court first reasoned that the district court’s disagreement with the arbitrator’s conclusion regarding retroactive application of the new NFL policy was not a valid basis to vacate the arbitrator’s decision.  Rather, the arbitrator’s decision needed to be upheld so long as the arbitrator was “at least arguably construing or applying the contract, including the law of the shop.”  Because the arbitrator “undoubtedly construed” the previous Ray Rice decision, the Eighth Circuit held that this requirement was satisfied and that the arbitrator’s decision on the issue should not be second-guessed by the courts.

The Eighth Circuit also disagreed that the arbitrator exceeded his authority by considering whether the discipline could be upheld under the NFL’s old personal conduct policy.  With respect to this issue, the NFL Players Association argued that the only question presented to the arbitrator was whether the NFL could retroactively apply its new policy to Peterson.  The Eighth Circuit pointed out, however, that the NFL characterized the issue more broadly as “Is the discipline appropriate?”  The NFL Players Association also raised arguments during the arbitration concerning whether the discipline was permitted under the NFL’s old policy.  As a result, the Eighth Circuit concluded that the arbitrator was at least arguably acting within the scope of his authority when he considered the previous policy, so that his decision must be upheld.

Takeaway:  The Eighth Circuit’s decision concerning Adrian Peterson is a reminder that courts are very deferential to arbitration decisions and that it is generally difficult to vacate an arbitration decision in federal court.

Can Minneapolis Voters Raise The Minimum Wage By Ballot Initiative?

No – the Minneapolis City Attorney recently published a legal opinion stating that a ballot initiative cannot be used to enact a new minimum wage in the City of Minneapolis.

In June of 2016, a group called 15 Now Minnesota submitted a petition with 20,000 signatures to the City of Minneapolis.  The petition sought to include a ballot initiative in the upcoming November election, which would amend the Minneapolis City Charter to increase the minimum wage.  The proposed amendment would have gradually raised the minimum wage in Minneapolis over time so that it would reach $15.00 per hour by August of 2022.

On July 28, 2016, the Minneapolis City Attorney issued a legal opinion that concluded that the proposed amendment to the city charter was not a proper subject for a ballot initiative.  The City Attorney reasoned that, under Minnesota law, city charters may only be used for the “establishment, administration or regulation of city government.”  See Minn. Stat. § 410.07.  In contrast to a charter amendment governing the administration of city government, a legislative ordinance may only be implemented through ballot initiative if specifically authorized by the city charter.  See Minn. Stat. § 410.20.

The City Attorney concluded that the proposed minimum-wage amendment was “legislative in nature” and did not relate to the establishment, administration or regulation of city government.  Because the Minneapolis City Charter does not specifically authorize the implementation of legislative ordinances through the ballot initiative process, the City Attorney further concluded that “the proposed amendment is not a proper subject for a charter amendment and the Council should decline to place the provision on the ballot.”

Takeaway:  The 20,000 signature petition seeking to amend the Minneapolis City Charter to increase the minimum wage is likely not a valid means of enacting a higher minimum wage within the City of Minneapolis.

Five Examples of What Not to Do in the Workplace from the Gretchen Carlson v. Roger Ailes Case

Yesterday, former Fox News TV host, Gretchen Carlson, filed a sexual harassment lawsuit against Roger Ailes, the CEO of Fox News.  The allegations in the lawsuit serve as a roadmap of the kinds of behavior to avoid in the workplace.  Here are five lessons about what not to do in the workplace that can be learned from the case:

  1. Don’t tell subordinate employees that “I think you and I should have had a sexual relationship a long time ago” and that “sometimes problems are easier to solve” that way.
  2. When an employee reports sexual harassment, don’t call her a “man hater” and say that she needs to learn to “get along with the boys.”
  3. Don’t ask a female (or male) employee to turn around so that you can ogle her posterior.
  4. Don’t comment that certain outfits enhance an employee’s figure and urge her to wear those outfits every day.
  5. Don’t boast to others that you always stay seated when a woman walks over so that she has to “bend over” to say hello.

Takeaway:  Whether these allegations are true are not, they are good examples of the kinds of behavior that employers, managers, and employees should avoid in the workplace to reduce the risk of liability.

St. Paul Area Chamber of Commerce Opposes New Sick Leave Ordinance

Last week, the President of the St. Paul Area Chamber of Commerce, Matt Kramer, published a public letter in opposition to the proposed “earned sick and safe time ordinance” under consideration by the St. Paul City Council.  The ordinance currently under consideration in St. Paul is similar in many respects to the ordinance recently passed in Minneapolis.

The letter asserts that the proposed ordinance is based on “little data,” “driven by emotion,” and will likely be implemented “with little calculation as to the multi-million dollar impact this will have on the business community.”  The letter strongly questions the asserted public health benefits of the proposed ordinance.  It notes that there is no available data that shows a correlation between paid sick leave and public health.  The letter also discusses the negative impact that the ordinance will likely have on small employers and raises various other concerns with the proposed ordinance.  A copy of the letter is available here.

Takeaway:  Despite opposition from the business community, the St. Paul City Council is expected to pass a paid sick leave ordinance similar to the one recently adopted in Minneapolis in the near future.

Chambers Ranks Briggs and Morgan as a Top Labor and Employment Law Firm In Minnesota For 2016

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.