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Appeals Court OK’s Applying MPLS Paid Sick Leave to Non-MPLS Employers

Yesterday, the Minnesota Court of Appeals affirmed a district court decision finding that the Minneapolis Sick and Safe Leave (SST) Ordinance was not preempted by state law.  The court also reversed a lower court decision that precluded the City of Minneapolis from enforcing its SST Ordinance against “non-resident” employers – or, employers that did not rent or own property in Minneapolis.

As a result, all employers (regardless of location) must permit employees to accrue SST if they perform at least 80 hours of work in Minneapolis.

Background

The Minnesota Chamber of Commerce challenged the Minneapolis ordinance in October 2016.  A Hennepin County Judge rejected the facial challenge to the law, but issued an injunction preventing the city from enforcing its ordinance “against any resident outside the geographic boundaries of the City.”

In 2018, the City amended the ordinance to address the court’s concerns about its geographic reach.  As amended, the ordinance provides that SST accrues only for hours an employee works “within the geographic boundaries of the city.”  Further, as amended, the ordinance provides that SST may only be used “when the employee is scheduled to perform work within the geographic boundaries of the city.”

Then, as we reported last year in Judge Says Mpls. Sick Leave Ordinance Cannot Be Enforced Against Non-Resident Employers, Hennepin County District Judge Mel Dickstein issued a final order finding that the Minneapolis ordinance was not preempted by state law, but permanently enjoining the city from enforcing its SST ordinance against “non-resident employers.”  Both parties appealed.

Court Finds Ordinance Valid, Even Against Non-Resident Employers 

On appeal, the court affirmed Judge Dickstein’s finding that the Minneapolis SST ordinance was not preempted by  state law.   The three key elements of this decision are:

⇒ First, the court concluded that the Minneapolis SST ordinance did not conflict with state law, including the Minnesota Sick Leave Statute, which requires employers to permit employees to use their sick-leave benefits to care for relatives who are ill or injured, an to use such benefits for “safety leave,” even if the employer’s policy does not permit such use.  The court noted that the Sick Leave Statute does not “mandate that sick leave be provided, much less require a certain number of leave days or that any part of that leave be paid.”

⇒ In addition, the court concluded that the ordinance was not impliedly preempted because it found that “the legislature did not intend to exclusively control the field of private-employer-provided sick-and-safe leave.”  The court found the Chamber’s concern about a “patchwork” of municipal SST ordinances “speculative, at best.”

⇒ Finally, the court reversed the district court’s decision finding that the Minneapolis SST ordinance had an impermissible extraterritorial effect.  That is, that it inappropriately regulated conduct outside the geographic boundaries of Minneapolis.  The court concluded that, as amended in 2018, the City’s ordinance did not have an impermissible effect: “Because the ordinance permits leave to accrue only when an employee works in the city and permits an employee to use her leave when scheduled to work in the city, the ordinance operates solely within the city.”

As a result, the court vacated the permanent injunction against the city enforcing the ordinance against employers located outside of the city.  This means that any employer (regardless of location) with employees performing work in Minneapolis for more than 80 hours will be required to comply with the ordinance.

Bottom Line

It was not surprising that the appeals court affirmed the validity of the Minneapolis SST ordinance since previous decisions had affirmed the City’s authority to issue such an ordinance.

The dissolution of the injunction, however, is noteworthy and very well could be appealed to the Minnesota Supreme Court.  We will keep track of that appeal if it happens, and of the possibility that the dissolution of the injunction might be stayed pending such appeal.  This may not be over just yet.

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