Minnesota Pending Employment-Related Legislation

The Minnesota Legislature, currently in regular session until mid- to late May 2022, has drafted various bills that may impact Minnesota employers and employees. Notably, some of the major bills under consideration (or already enacted) include a hair antidiscrimination bill, a measure extending the COVID-19 presumption of workers’ compensation eligibility for certain healthcare workers, and a proposal to restrict noncompete agreements. The below summary is not meant to be an exhaustive review of current legislation. As new and relevant bills arise that may impact Minnesota employers, we will provide updates.

Hair Antidiscrimination Bill

On February 28, 2022, the Minnesota House of Representatives passed House File (HF) 1315, which would add a definition of race to the Minnesota Human Rights Act to state: “‘Race’ is inclusive of traits associated with race, including but not limited to hair texture and hair styles such as braids, locks, and twists.” In other words, HF 1315 would ban discrimination based upon someone’s natural hair. This bill is similar to many others being passed around the United States (referred to as “Create a Respectful and Open World for Natural Hair” or “CROWN” acts), including H.R. 2116, which the United States House of Representatives passed on March 18, 2022.

The Minnesota Senate’s Civil Law and Data Practices Policy Committee is considering companion legislation, Senate File (SF) 1273.

Workers’ Compensation Presumption for Healthcare Workers

As detailed in our article on February 14, 2022, the Minnesota Legislature passed—and Governor Tim Walz signed into law—HF 1203, extending the presumption of workers’ compensation eligibility for certain healthcare workers who contract COVID-19.

Noncompete Agreements Bill

On February 24, 2022, the Minnesota House of Representatives referred HF 999 to the House Judiciary Finance and Civil Law Committee. Its companion, SF 1629, awaits action by the Senate Labor and Industry Policy Committee.

This proposed law seeks to limit the enforcement of noncompete agreements, particularly for “low-wage” occupations. The bill defines a “covenant not to compete” as an agreement that “restricts the employee, after termination of the employment, from performing”:

  • “work for another employer for a specified period of time”;
  • “work in a specified geographical area”; or
  • “work for another employer in a capacity that is similar to the employee’s work for the employer that is a party to the agreement.”

Specifically, if these bills are passed into law as drafted, noncompete agreements will be valid and enforceable only if:

  • “the employee earned an annual salary from the employer at least equal to the median family income for a four-person family in Minnesota, as determined by the United States Census Bureau, for the most recent year available at the time of the employee’s termination”; and
  • “the employer agrees to pay the employee on a pro rata basis during the entirety of the restricted period of the covenant not to compete at least 50 percent of the employee’s highest annualized base salary paid by the employer within the two years preceding the employee’s separation from employment.”

Additionally, the bills include a choice-of-law provision that would prevent employers from enforcing a different state’s laws to avoid enforcement of the law for those employees who primarily reside and work in Minnesota.

This proposed law would prohibit noncompetes except when an employee “earned a salary ‘at least equal to the median family income for a four-person family in Minnesota’” and the employer agrees to pay the former employee at least half of the employee’s highest annualized base salary in the last two years of employment during the duration of the noncompete period. Employees would be able to obtain injunctive relief and other available remedies, along with attorneys’ fees, for enforcing their rights under this proposed law.

Notably, these bills would not limit the enforcement of nondisclosure, nonsolicit, or trade-secret protection agreements. The proposed law would drastically change Minnesota’s current noncompete landscape. While HF 999 may pass the Minnesota House of Representatives, its Senate counterpart, SF 1629, will likely not pass, given the current makeup of the Senate.

© 2022, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.
National Law Review, Volume XII, Number 97