During the past legislative session, the legislature passed several significant changes to the Minnesota Veteran’s Preference Act, including reducing the 60 day notice period to 30 days, eliminating the three-person panel and replacing it with a single arbitrator, providing for the termination of a Veteran during probation without the protection of a Veteran’s hearing, and providing for the possibility the employer may be responsible for a discharged Veteran’s reasonable attorneys fees.

Minn. Stat. § 197.455 now allows, counties, cities, towns, school districts and other municipalities to require a veteran to complete an initial hiring probation period.  After the initial probation period is completed, a veteran may not be removed from a position except for incompetency or misconduct shown after a hearing.

The legislature also made changes to Minn. Stat. § 197.46.  After a veteran receives notice of the government’s intent to discharge him/her from employment, the veteran now has only 30 days to request a hearing, instead of the previously allowed 60 days.  The failure of the veteran to request a hearing within 30 days constitutes a waiver of the right to a hearing and all other legal remedies for reinstatement.  Additionally, the option to have the hearing before a “three-person panel” has now been changed to “an arbitrator.” In cases where the hearing will be before an arbitrator, the employer is to request a list of seven possible arbitrators from the Bureau of Mediation Services.  The legislature also stated the employer is required to strike first from the list of seven arbitrators, giving the Veteran the final selection.

The last significant change involves the costs associated with the hearing.  The statute will now read, “For disputes heard by a civil service board, commission or merit system authority, or an arbitrator, the governmental subdivisions shall bear all costs associated with the hearing, but not including attorney fees for attorneys representing the veteran.  If the veteran prevails in a dispute heard by a civil service board, commission or merit system authority, or an arbitrator and the hearing reverses the level of the alleged incompetency or misconduct requiring discharge, the governmental subdivision shall pay the veteran’s reasonable attorney fees.”

The most significant change for employers is the exposure to liability for the Veteran’s reasonable attorney’s fees in the event a discharge is reversed.

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.

In Minnesota, it is not uncommon for smaller municipalities, counties, townships or school districts to enter into joint powers agreements with another small entity for purposes of providing better services to its citizens.  A joint powers agreement establishes a board which has the power to receive and expend funds, enter contracts, and hire employees, creating a separate joint entity apart from the individual municipalities involved.   As an example many communities have entered into joint powers agreements for purposes of providing law enforcement services or fire protection.

In 2014, the Minnesota legislature adopted a new statute which provides certain employee protections in joint powers agreements.  The statute governs any joint powers entities established after January 15, 2015 and addresses unionizing, determination of an appropriate bargaining unit, transitioning to a new bargaining unit, interim collective bargaining agreements, as well as contract negotiations and administration.    

In addition to reviewing the new statute prior to entering into a joint powers agreement, I would also recommend you review the League of Minnesota Cities document “Ten Things To Watch For When Entering Into Joint Powers Agreements.”  By doing a little research upfront regarding the process, headaches could be avoided later. 


October 1, 2013 is the deadline set by the federal government for employers to provide written notice to current employees about the health insurance marketplaces which have been created to comply with the Patient Protection and Affordable Care Act (also known as “Obamacare”).

Under the Affordable Care Act (ACA), employers with 50 or fewer full-time employees are not required to offer health insurance coverage. However, that doesn’t mean they don’t have to comply with the notice requirement about the health insurance marketplaces. This notification requirement applies to any employer who is falls under the Fair Labor Standards Act (FLSA). There is no exception for small businesses. Employees who are hired after October 1, 2013, must also receive this notice within 14 days of starting employment.

The information required to be included in the notice is very specific, so the U.S. Department of Labor has provided model notices to be used by employers who offer insurance and employers who do not offer insurance.

Minnesota’s health insurance marketplace is found at www.MNsure.org. It has a lot of helpful information for both employees and employers, including a calculator to determine the cost of insurance. Model notices are also available on the www.MNsure.org website. Either the notices through the Department of Labor or MNSure meet the criteria under the ACA.

The October 1st deadline is fast approaching. Employers make sure to mail out these notices right away.

My good friend and fellow attorney, Susan Minsberg, just forwarded a legal alert about proposed legislation of interest to all business owners regarding non-compete agreements. Non-compete agreements are an important tool for many business owners. They limit employees from helping themselves to their employers’ trade-secrets, client lists, and confidential information.

A bill potentially impacting current and future non-compete agreements in Minnesota was introduced into Committee at the House of Representatives, which would change the way business owners view non-competes today.

House File No. 506 is short, but packs a punch. Instead of the present rule of reasonable restrictions on length of time and scope of a non-compete, the proposed legislation would likely void present non-competes, and limit them in the future to a “specified county, city, or part of one of them…”

Sponsors of the bill are Representative Joe Atkins, (DFL District 52 B) Chair of the House Commerce Committee, and Representative Alice Hausman, (DFL, District 66A) Chair of the Capital Investment Committee.

If you are a business owner, know a business owner, or one day hope to be a business owner, you should contact your Representative and weigh in on this important issue. Minnesota is not considered a business-friendly state in terms of regulation and taxation. Removing non-competes will do nothing to make Minnesota attractive to a business considering moving here.