UPDATE: On September 18, 2017, the Minnesota Court of Appeals issued a ruling regarding the enforceability of the Minneapolis Sick and Safe leave ordinance that went into effect on July 1, 2017. The court reviewed a district court injunction that stayed enforcement of the ordinance against “non-resident” employers, i.e., employers that do not have a physical location within the city limits of Minneapolis. The court of appeals agreed with the district court that the ordinance should not be applied to employers who do not have a facility in Minneapolis, even if employees perform some work in Minneapolis.

The court also agreed with the district court that the remainder of the law was enforceable and not preempted by state law. As such, the ordinance remains in effect for all employers that have a physical location in Minneapolis, and that have employees who work 80 or more hours in a year. For employers with 6 or more employees, the law requires paid sick leave and protection from adverse employment action. Effective July 1, 2017, employers were required to have a compliant policy and provide notice of the law. Employers with collective bargaining agreements have until; July 1, 2018, to ensure their agreements provide compliant benefits.

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A Minnesota state district court recently issued a temporary injunction preventing Minneapolis from enforcing its Sick and Safe Time Ordinance (the “Ordinance”), which is scheduled to go into effect July 1, 2017, against any employer “resident outside the geographic boundaries” of Minneapolis until after a hearing on the merits or further court order. It is unclear from the court’s ruling which employers are “resident outside” of Minneapolis, although simply having an employee work some of his or her time within the city limits is likely not sufficient to subject an employer to the Ordinance. An appeal of the court’s order is expected, but for now, the other requirements of the Ordinance remain intact.

Minneapolis Sick and Safe Time Ordinance

On May 31, 2016, Minneapolis passed the Ordinance, which will require employers to allow employees to accrue up to 48 hours of sick and safe time leave each year beginning July 1, 2017. Employers with six or more employees must provide paid sick and safe time, while smaller employers must provide unpaid leave. Click here and here for more detailed information on the requirements of the Ordinance. 

With limited exceptions, the Ordinance, as written, applies to all employees, including full-time, part-time and temporary employees, who work within Minneapolis for at least 80 hours in a “calendar” year, or approximately 1.5 hours per week. As a result, the Ordinance would have applied to many employers with a limited connection to Minneapolis, including employers based in other cities and with no brick-and-mortar offices or other facilities within Minneapolis city limits.    

Legal Challenge to the Ordinance

The Minnesota Chamber of Commerce (“the Chamber”) joined other business groups and individual employers to challenge the Ordinance in Minnesota state court, moving for a temporary injunction to stop the Ordinance from going into effect on July 1, 2017. Specifically, the plaintiffs argued that the Ordinance was pre-empted by and conflicted with state law, and that Minneapolis did not have the authority to enforce the Ordinance because it inappropriately extended beyond the geographic borders of Minneapolis.    

On January 19, 2017, Hennepin County Judge Mel Dickstein issued an order rejecting the Chamber’s preemption and conflict arguments. The court, however, granted the motion to enjoin Minneapolis from enforcing the Ordinance against companies “resident outside” of the city.

The court recognized that Minneapolis wanted to prevent “employees who, for lack of available leave time, feel compelled to go to work within the City of Minneapolis even when ill,” and noted that that policy “may be a good one.” Yet, the court held that “the city is not free to impose its public policy initiative on companies beyond its territorial jurisdiction,” because there was not a “sufficient nexus” between the city’s goals and applying the Ordinance to “companies located outside Minneapolis’ borders.”

Questions Remain After the Ruling

Unfortunately, the court provided little guidance regarding the permissible territorial reach of the Ordinance and did not identify the scope of employers to which the Ordinance may apply. The court did, however, hint that the city may still be able to enforce the Ordinance against employers located outside the city. To do so, Minneapolis would have to create a sufficient nexus between the harm the Ordinance is intended to prevent and its reach beyond the city’s borders. The court criticized the Ordinance as currently written because it “does not attempt to regulate only those companies whose employees work in Minneapolis full time or substantially full time, or two-thirds time, or half time, or even on a regular part-time basis.” Thus, the order suggests that the Ordinance may become enforceable against companies based outside of Minneapolis if those companies have employees with a regular presence in the city.

Additional Developments Expected

Lawyers for the plaintiffs have said that they plan to appeal the parts of the decision that they lost.  Without further court order, that appeal and discovery on the merits of the case will proceed at the same time. The court noted that it will hold a hearing on the merits of the case before July 1, 2017, when the Ordinance becomes effective.

We will continue to provide updates on this matter as warranted, and employers with operations or employees working in Minneapolis should monitor city websites so they can implement changes if and when necessary.