Minnesota Awaiting Employment Legislation

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

Anti-hair discrimination bill

On February 28, 2022, the Minnesota House of Representatives passed Internal File (HF) 1315, which would add a definition of race to Minnesota human rights law to read: “‘Race’ includes traits associated with race, including but not limited to hair texture and hair styles such as braids, highlights and twists.In other words, HF 1315 would prohibit discrimination based on the natural hair of This bill is similar to many others passed in the United States (referred to as the “Creating a Respectful and Open World for Natural Hair” or “CROWN” acts), including HR 2116, which the House of Representatives United States adopted March 18, 2022.

Minnesota Senate Civil Law and Data Practices Policy Committee Considering Complementary Legislation, Senate File (SF) 1273.

Presumption of workers’ compensation for healthcare workers

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

Non-Competition 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 from the Senate Committee on Labor and Industry Policy.

This bill aims to limit the application of non-competition agreements, in particular for “low-wage” professions. The bill defines a “non-competition clause” as an agreement that “prevents the employee, after termination of employment, from performing”:

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

Specifically, if these bills are passed as written, the non-competition agreements will only be valid and enforceable if:

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

Additionally, the bills include a choice of law provision that would prevent employers from applying the laws of another state to avoid application of the law for employees who reside and work primarily in Minnesota.

This proposed law would prohibit non-competitions except where an employee “earned a salary ‘at least equal to the median household income of a family of four in Minnesota'” and the employer agrees to pay the former employee at least half of the employee’s highest annualized base salary during the last two years of employment for the duration of the non-competition period. Employees may obtain injunctive and other available remedies, as well as attorneys’ fees, to enforce their rights under this proposed law.

In particular, these bills would not limit the application of non-disclosure, non-solicitation or trade secret protection agreements. The proposed law would dramatically change Minnesota’s current non-competition landscape. While HF 999 may pass the Minnesota House of Representatives, its Senate counterpart, SF 1629, is unlikely to pass, given the current makeup of the Senate.

© 2022, Ogletree, Deakins, Nash, Smoak & Stewart, PC, All rights reserved.National Law Review, Volume XII, Number 97

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