Gov. Tim Walz has signed or is expected to sign the Minnesota legislature’s Jobs and Economic Development and Labor Omnibus Budget Bill, bringing broad change to the Minnesota employment law landscape. Notably, the new law bans post-employment noncompete agreements in Minnesota, creates state-wide paid sick and safe time leave, prohibits restrictive franchise agreements, modifies wage disclosure protection law, provides additional protections for pregnant and nursing workers, prevents mandatory employer-sponsored meetings, and creates additional paystub requirements for construction workers, among other things. Gov. Walz signed the paid family and medical leave law, creating a new paid family and medical leave program funded by employer and employee payroll taxes and providing up to 12 weeks of paid leave in a single benefit year for an employee’s own serious health condition and up to 12 weeks of paid leave in a single benefit year for bonding, safety leave or family care, with a cap of no more than 20 weeks of total combined leave in any single benefit year. The Minnesota legislature also ended its 2023 session after passing a recreational cannabis law, amending the state’s drug and alcohol testing laws following the legalization of recreational marijuana, which is anticipated to be signed into law by Gov. Walz this week.
On May 11, 2023, the Minnesota Legislature agreed to a new law rendering void and unenforceable all future covenants not to compete, with limited exceptions for agreements entered into in connection with the sale or dissolution of a business. Following a final vote in the House and Senate, the law will be sent by Gov. Tim Walz for his signature. The law is written to take effect July 1, 2023, and to apply to contracts and agreements entered into on or after that date. With enactment, Minnesota will become the fourth state to impose a complete ban on employment-related noncompetes (joining California, Oklahoma and North Dakota).
The law prohibits any noncompete agreement with an employee or independent contractor that restricts the person from working for another business after termination of employment or independent contractor engagement regardless of a person’s income, with only two very limited carveouts for noncompetes agreed upon (1) during the sale of a business where the agreement prohibits the seller from carrying on a similar business within a reasonable geographical area for a reasonable period of time, or (2) in anticipation of the dissolution of a business where the dissolving partnership or entity agrees that all or any number of the partners, members, or shareholders will not carry on a similar business in a reasonable geographical area for a reasonable period of time. Subject to those limited exceptions, the law provides that any “covenant not to compete” contained in a contract is void and unenforceable. Importantly, a “covenant not to compete” does not include nondisclosure, confidentiality, trade secret, or non-solicitation agreements (including specifically those restricting the ability to use client or contact lists or restricting the solicitation of customers). Also, because “covenant not to compete” is defined in terms of prohibiting conduct “after termination of the employment,” the new law will not prohibit agreements that restrict an employee or independent contractor from working for another business while performing services for a business.
This past year, exculpatory waivers had their moment in the sun as businesses and educational institutions raced to put waivers in place to protect against claims stemming from the COVID-19 pandemic. A Minnesota Court of Appeals decision published this week, Carter Justice v. Marvel, LLC d/b/a Pump It Up Parties, provides clarity and confidence for the Minnesota businesses and educational institutions that utilize waivers for persons under 18. In an issue of first impression, the appellate court held that an exculpatory waiver signed by a parent on behalf of his or her minor child is binding on the child after the child becomes an adult. The court also reinforced the standard for determining whether a waiver is enforceable under Minnesota law and the effect of an overly broad waiver.
Today, after much anticipation and just in time for the Memorial Day holiday, the Equal Employment Opportunity Commission released updated guidance on COVID-19 vaccination issues raised under federal equal employment laws. We outline five things you need to know about the new guidance.
On March 12, 2021, nearly one year to the day after Minnesota declared a peacetime emergency in response to the COVID-19 pandemic, Governor Tim Walz issued Executive Order 21-11, which rolls back certain restrictive measures aimed at limiting the spread of the coronavirus.
Chief among the changes is a relaxation of the mandate that all employees who are able to work remotely must do so. Commencing on March 25, 2020, pursuant to Executive Order 20-20, Minnesota employees have been required to work remotely whenever they are able. This requirement will cease on April 14, 2021, at 11:59 p.m. Employers are now strongly encouraged to allow Minnesota-based employees to work from home when they are able to do so. Employers are also strongly encouraged to implement reasonable accommodations for those employees who are at-risk for infection or who reside with a household member with an underlying medical condition that has not yet become eligible for vaccination. This softens obligations previously set forth in Executive Orders 20-54 and 20-55 in light of the expanded access to COVID-19 vaccinations.
As COVID-19 vaccines become more widely accessible, and certain localities relax COVID-19 restrictions, employers hoping to ramp up on-site operations or reduce absenteeism face a new challenge: navigating employee vaccination. Employers are evaluating whether to mandate, strongly suggest or simply remain neutral regarding COVID-19 vaccinations and on-site work.
The considerations surrounding workplace vaccination programs are complex. Business justifications and accommodation issues, potential public relations and employee relations pitfalls, the impact of vaccination on workforce safety procedures, litigation risks on multiple fronts — these are just the beginning. To help piece together this business and regulatory puzzle, we have compiled a list of issues organizations should consider as they set policy and communication plans regarding on-site work and COVID-19 vaccines. We have also identified issues to consider with regard to the practical application of any such policy and the development of related communications to employees or others.