Minnesota Employers Should Call Their Attorney Immediately if They See One of these Red Flags

Minnesota laws impose many requirements on employers. Concerns about violating these laws can keep a business owner up at night. Without an audit by an experienced employment law attorney, employers are often operating in the dark and may fail to recognize a potential lawsuit from their employees until it is too late.

Some events, however, stand out as a clear warning of trouble on the horizon. These red flags provide business owners an opportunity to anticipate, and prepare for, the possibility of a lawsuit by one of their employees. Identifying these red flags as they arise, implementing sound response strategies, and avoiding disastrous mistakes before you are served with a lawsuit can reduce your risk and liability, and may even save you some sleep in the process.

“I AM THE LAW!”

Some employees feel it is their responsibility, regardless of their actual job duties, to ensure their employer complies with every statute, regulation, administrative guidance, and the legal advice they obtained from a non-lawyer friend or social media. Employees may even make reports with no merit if they believe their jobs are in jeopardy in order to complicate discipline and safeguard their positions. Sometimes, employee reports of a violation may help the business comply with the law. Other times, these reports may feel like a nuisance, especially if the employee’s report seems to have no merit.

Minnesota law prohibits whistleblower retaliation and severe consequences arise if an employer fires or otherwise disciplines an employee for reporting a legal violation, such as sexual harassment or failing to comply with OSHA regulations. The employer does not even need to have actually violated the law; instead, the report only needs to be made in “good faith.”

Regardless of the employee’s motivation, an employer should treat every report of a legal violation seriously. Employers should also have policies in place that provide a clear process for reporting suspected violations. If there is a legitimate need to discipline or terminate an employee who frequently reports legal issues, the employer should proceed cautiously and involve counsel before taking any steps that could give rise to a claim of whistleblower retaliation.

“Show Me Your Papers!”

Minnesota law requires employers to maintain certain items in an employee’s personnel record. The new wage theft law implemented in August 2019 (discussed here) added more items to that list. Many employees will never ask about their personnel record and, when they do, those requests may be entirely benign.

When employees send a written request for their personnel record, Minnesota employers with 20 or more employees must supply a copy within seven days if the personnel record is located within Minnesota. The employer has 14 days to supply this copy if the personnel record is located in another state. Given the prevalence of business computer networks and electronic files, employers should err on the side of caution and assume the seven-day deadline applies. As defined by Minnesota law, however, “personnel record” does not include every scrap of paper or document that mentions an employee, and an employer may even increase their legal risk if they turn over documents that fall outside this statutory definition. Because other requirements and limitations apply, you should speak to an employment law attorney if you have any questions about your responsibilities as an employer responding to such a request.

When the employment relationship has deteriorated, and especially if the employee was terminated, an employee’s request for the personnel record signals potential litigation. Wise employers do not respond to these requests without calling their attorney immediately in order to obtain advice on their obligations under Minnesota law, to assess potential liability related to the requesting employee, and to prepare for the possibility of a lawsuit.

“Tell Me the Truth, and Nothing but the Truth.”

If former employees ask in writing why they were fired, and this request is made within 15 days of their firing, Minnesota law requires an employer of any size to provide the truthful reason within 10 days after receiving the request. Because this requirement is somewhat obscure, this written request is a strong signal that the employee may be talking to a plaintiff-employee attorney and employers should treat these requests as if they had received a demand letter on law firm letterhead.

When handled properly, responding to these requests should pose little risk to the employer. When handled poorly, the employer’s response (or lack thereof) may become a significant piece of evidence in forthcoming litigation.

An employer receiving this request should discuss with counsel before replying. The cost of preparing a proper response is minimal compared to the cost of extended litigation. This request also gives an employer an opportunity to begin preparing for a potential lawsuit, well before they are served with one. Though there is no way to completely eliminate the risk of litigation, careful planning and early involvement by counsel may dramatically shift the odds in the employer’s favor.

Responding to Red Flags

It is impossible to predict with 100% accuracy whether any of the above red flags precede a lawsuit, but employers increase their legal risk if they react in anger and retaliate against an employee for exercising a legal right. Though this is sometimes easier said than done, especially if the employee-employer relationship is particularly hostile, “gut” reactions can lead to critical mistakes that a business owner may regret (for example, while sitting in a deposition). Even purely internal emails may come to light during formal discovery and Minnesota is a “one party consent” state in regard to recordings, meaning employees may secretly record their conversations with their bosses. Many do.

When employees report a legal violation, or when they make a written request for their personnel record or the reason for their termination, prudent business owners will avoid an immediate reaction and will instead proceed with caution. As a business owner, you are better off learning about your legal obligations from your lawyer before you are in litigation, as opposed to discovering what you did wrong when you are served with a lawsuit.