Earlier this year, I wrote a blog about a new workplace benefit – student loan debt relief.  Now, it seems employers are again thinking outside the box with respect to employee benefits.  The latest workplace benefits employers are offering include onsite meditation, yoga and other programs that help workers de-stress.  Other unique benefits are cooking classes, standing desks, bringing a pet to work, and free snacks or meals.  All these benefits are in addition to the more traditional benefits of medical and dental insurance, paid vacation, sick time, and retirement accounts.

A recent news article discussed a research study conducted by Glassdoor.com which found 57% of people said benefits and perks were among their top considerations when accepting a job.  Also, four out of five employees indicated they would like additional benefits over a pay raise.

These new and unique job perks are structured to help employees with work/life balance.  A challenge for employers is finding benefits their employees are interested in.  Older workers or working parents are going to be interested in different benefits than  younger millennials.  As long as employers keep all employees in mind when deciding what benefits to offer, I think they will definitely increase employee job satisfaction.

Line of people taking notesEarlier this year the Court of Appeals overturned the district court’s dismissal of a case regarding the negligent retention of an employee.  In Hartfiel v. Allison, unpublished Court File # A15-1149 (Minn. Ct. App. 2016) Mr. Hartfiel, the plaintiff, drove truck for T.J. Potter Trucking Inc. as an independent owner-operator.  Mr. Allison drove truck for Potter Trucking as an employee.  In June 2010, Mr. Allison attacked Mr. Hartfiel at the workplace.  Mr. Hartfiel sued Potter Trucking for negligent hiring, negligent retention and negligent supervision of Mr. Allison.  The district court dismissed all of Mr. Hartfiel’s claims, and Mr. Hartfiel appealed.

The Court of Appeals reviewed the negligent hiring and negligent retention claims stating, “Negligent hiring is the failure of an employer to use reasonable care in hiring individuals who, through the employment, may pose a threat of injury to members of the public…. An employer will not be held liable for failure to discover information about the employee’s incompetence that could not have been discovered by reasonable investigation…”

Plaintiff Hartfiel claimed because Potter Trucking did not do a background check on Allison when it hired him, it did not conduct a reasonable investigation.  Mr. Allison had previously been arrested for assault on two occasions.  Generally, there is no legal duty that employers investigate an applicant’s criminal record.  Potter Trucking does check applicants’ driving records but does not conduct criminal background checks.  The Court of Appeals stated, “In determining whether an employer conducted a reasonable investigation, …is directly related to the severity of risk third parties are subjected to by an incompetent employee.”  The Court of Appeals found there was no evidence to suggest that Potter Trucking knew or should have known of Allison’s violent propensities when it hired him as a truck driver.  Therefore, the district court did not err when it granted summary judgment to Potter Trucking on the negligent hiring claim.

The argument of negligent retention has very different considerations.  The Court indicated, “The difference between negligent hiring and negligent retention focuses on when the employer was on notice that an employee posed a threat and failed to take steps to insure the safety of third parties.”

Plaintiff Hartfiel testified he had heard about Mr. Allison “working over” a subcontractor while off-duty out at a bar.  Mr. Allison admitted to smacking the subcontractor because he thought the subcontractor was going to hit him.  The incident was not reported to Potter Trucking because it was off-duty and off-site, but the owner of Potter Trucking acknowledged the altercation had been brought to his attention via the gossip mill.  He did not address the issue because it was not work related and he stated, “boys are boys”. The Court of Appeals held there were genuine issues of material fact regarding Mr. Hartfiel’s negligent retention claim, and overturned the district court’s granting of summary judgment.

My law partner has previously blogged about the importance of the hiring process.  Many employers many not realize that they can be sued for negligent hiring and/or negligent retention.  Take an opportunity to make sure you have a good hiring process in place.  Also, don’t ignore issues between employees just because they don’t occur at work.

In Minnesota the long-standing rule is that continuation of employment by itself, is insufficient consideration for a non-compete agreement entered into after employment has commenced.  Minnesota employers have always been able to require new employees to enter into non-compete agreements in exchange for starting a job.

The Wisconsin Supreme Court ruled the continuation of at-will employment is lawful consideration for a non-compete agreement entered into with existing employees.  No additional payments, training, promotions or other benefit is necessary.  In Runzheimer International, Ltd. v. Friedlen, 862 N.W.2d 879 (Wis. 2015), the Court only evaluated the existence of consideration, not the adequacy of it.

In that case, the employee, Mr. Friedlen had worked for the company for more than 15 years without a non-compete agreement.  In 2009, as part of a corporate initiative all employees were required to sign agreements containing provisions against disclosure of confidential information, solicitation of customers or competing against Runzheimer after their employment ended for any reason.  Mr. Friedlen was given two weeks to review and consider the agreement.  He was told he would be fired if he didn’t sign it.  Mr. Friedlen eventually signed the agreement and continued working for Runzheimer for over 2 years.  Mr. Friedlen subsequently was hired by a competitor and Runzheimer sought to enforce the non-compete agreement.  The Wisconsin Supreme Court stated, “Runzheimer’s promise was that it would not fire Friedlen at that time and for that reason.  Thus, Runzheimer performed immediately when it forbore its legal right to fire Friedlen at that time.”

The courts in Minnesota have taken the opposite stance, instead ruling that a current employee lacks bargaining power when presented with a non-compete agreement and told to sign it or be terminated.  Under Minnesota law a current employee must receive a real benefit that is directly related to the signing of the non-compete agreement.

If you are a Minnesota-based employer who has employees who live or work in Wisconsin you may want to consider selecting Wisconsin as the governing law for employment agreements with non-compete provisions.    

A coalition of Minnesota DFL legislators is proposing a bill that would ensure all employees in Minnesota have paid family and sick leave.  The DFL proposal would establish a state insurance program which would offer employees in Minnesota up to 80% of their pay for up to 12 weeks a year for pregnancy or medical issues.  It would also apply to employees who need leave to care for a sick family member or newborn child.  Under the proposed plan, employers and employees would share the costs for the program.  The program would be mandatory for employers and employees, however, employers who currently have paid family and sick leave policies that match or surpass the proposed state insurance plan would be exempt from the new law.

According to a study conducted by the University of Minnesota almost 136,000 employees would benefit from the program.  It is estimated over $450 million in benefits would be paid out in one year.  The Minnesota Chamber of Commerce although understanding of the program’s goal, objects to the plan because it would take away the flexibility currently available to employers.

Governor Dayton has already proposed a similar program for Minnesota State employees.  California, New Jersey, and Rhode Island all have similar benefits.

This law would be a huge change for Minnesota employers.  For many small employers it could be a financial hardship to require them to contribute to this type of benefit.  I agree with the Minnesota Chamber of Commerce, it is a great idea in concept, but I’m not sure it is the best idea for Minnesota’s small entrepreneurial businesses.

Three Fire Chiefs in Crews v. Monarch Fire Protection District, 771 F.3d 1085 (8th Cir. 2014) challenged their terminations from employment, claiming procedural due process violations and defamation.  The three Fire Chiefs were terminated from their positions after the Missouri Court of Appeals upheld a jury verdict against the Monarch Fire Protection District for sexual discrimination, concerning the treatment of several female firefighters.  The Fire Chiefs had been given an opportunity to resign, but refused and were then terminated.

The Board for the fire protection district’s defended its decision to terminate, based on the Court of Appeals ruling.  Several members of the Board were alleged to have stated the Chiefs were discharged for promoting an environment of unacceptable discrimination. The Fire Chiefs claimed Monarch violated their fourteenth amendment rights without due process of law.

Missouri is an at-will state and the Fire Chiefs did not have express employment contracts.  The Court determined “In Missouri, an employee can be terminated at the will of his employer unless a valid employment contract – complete with ‘offer, acceptance and bargained for consideration – states otherwise.”  Nothing in this case established the elements of an enforceable contract, and therefore the Fire Chiefs were at-will employees and held no property interest in their continued employment.  Additionally, the Chiefs forfeited any loss-of-liberty claim when they failed to request a name clearing hearing; and the Chiefs did not clearly establish any constitutional violations.

Minnesota is also an at-will state, unless an employee is covered by a union contract, or has a contract with his/her employer.  Minnesota employers should be aware at-will employment can be negated through an employment contract.

Minnesota is known for its “Minnesota Nice” residents. But it isn’t always the citizens that are nice, sometimes it’s the businesses, or more accurately the business owners. Jon Tevlin (@jontevlin) with the Star Tribune had the opportunity to highlight a few of these “Minnesota Nice” businesses.

Last month Mr. Tevlin wrote about Bob Sullivan, a Wendy’s franchise owner in Duluth whose restaurant had a fire causing the restaurant to close while under construction. Mr. Sullivan is not only committed to rebuilding the restaurant, he is also committed to his employees. He told the employees they will continue to be paid while the restaurant was being rebuilt. Is he legally obligated to do this? No. So, why is he? Because he said, “[r]eplacing good people is hard to do.”

Mr. Sullivan isn’t the first Minnesota business owner to make headlines for doing a good thing for his employees. In December 2013, the owners of Punch Pizza made local and national news for voluntarily raising new employee wages to $10/hour.   It even got mentioned in President Obama’s State of the Union address  In 2012, a Bemidji grocery store owner retired and left his business to his employees, versus selling to a chain store.

None of these business owners were required by law to perform these acts of kindness. They realized their biggest asset is their workforce, and when you have good employees, you want to keep them happy. So often we only hear news about businesses with problem employees, it is a nice change of pace to hear a story about a business that is going the extra mile.

At-will employment is believed by many employers to allow them the ability to terminate an employee for any reason or no-reason at all, except for a discriminatory reason. We advise our clients to make “at-will” employment status very clear in job offers and in employee handbooks. This prevents an “at-will” employee from believing a contract has been established which guarantees continued employment.

The fallacy of “at-will” employment is that if employers do terminate an employee without notifying them of the legitimate reasons for termination, the employee is free to make-up a reason. This may be in the form of a discrimination claim, sexual harassment claim, wage and hour claim etc.

Truth and honesty with employees is always the best course of action for any employer. Additionally, using good business practices which include accurate performance evaluations, coaching, counseling, fair and reasonable discipline, and providing training opportunities to employees is important. Clear communication of employee expectations is also essential for every employer, as is documenting an employee’s work record. It has been my experience that employees who have been put on notice of work expectations, been treated fairly, and given an opportunity to make necessary changes, are less likely to challenge termination decisions.

The notion of at-will employment is really deceptive. A better course of action for employers is to follow the golden rule, “Treat others, like you want to be treated yourself.” It is one way to reduce legal bills, and avoid some of the costly challenges to employment termination decisions.

I have previously posted about the topic of “at-will” employees and cautioned employers that it is possible to create an expectation of job security in the documents issued to employees, thus negating the “at-will” status.

In the case Ellis v. BlueSky Charter School, A09-1205 (Minn. Ct. App. 2010) (pdf) the school director challenged his termination based on language in his employment agreement. Mr. Ellis was hired as school director for the 2008-2009 school year. An employment agreement was executed between Mr. Ellis and the school board stating, “[t]his is a general at will agreement.” It also set forth the work year as July 1, 2008 – June 30, 2009 and provided, “[p]ositions will automatically renew for one year after one year of service unless specific actions are taken by the board before April 15th of each year.” Mr. Ellis was terminated by the board on May 7, 2009.

In Minnesota, an employment contract for a fixed term is generally interpreted as terminable only for cause. The Minnesota Court of Appeals in an unpublished decision held in this case, “[t]he plain language of the “at-will” phrase overrides the general rule for construing a fixed-term contract, expressly replacing any implication that might have been drawn from the reference to start and end dates. The asserted tension between the at-will declaration and the stated dates of service does not create ambiguity.” Mr. Ellis’s position was determined to be at-will.

If you are hiring new employees, make sure their employment status is clear to them. If an employee is “at-will,” tell them so.

Many employers mistakenly think if they don’t have a written contract with employees or their employees don’t have a union, then the employees are “at-will.” “At-will” employment may be terminated by an employer or an employee at any time for basically any reason.  In Minnesota, employees are presumed to be employed “at-will.”

It is possible for an employer to unintentionally alter an employee’s “at-will” status and create an expectation of job security. Minnesota courts follow two major exceptions to “at-will” employment. One being an employer may not discharge an employee when the termination is against a well-established public policy, for example, firing an employee for filing a workers’ compensation claim after being injured at work. The second is the creation of an implied contract based on either policy statements made in an employee handbook or oral representations made by an employer to an employee.

If your employees are “at-will” employees, do not include the following in your employee handbook:

Probationary terms – “At-will” employees are “at-will” before, during, and after probationary periods. Having probationary language may be interpreted as providing a guaranteed term of employment.
Specific discipline procedures Minnesota courts (pdf) have decided when an employee handbook includes specific disciplinary steps to be taken prior to termination, an employee’s “at-will” status is modified and some job security is presumed.
“Just cause” for termination – Can create expectations of job security.
Defining employees as “permanent” – Can create expectations of job security.

If you have “at-will” employees, you should not make specific promises in your employee handbooks which could lead employees to believe they had a guarantee to continued employment, and you should include clear and prominent disclaimers to prevent the creation of unilateral contracts with employees.