Minnesota Federal District Court Rules That the MHRA Does Not Apply to Workers Who Do Not Work in Minnesota at the Time of Termination

In Walton v. Medtronic USA, Inc., a federal district court in Minnesota recently found that the Minnesota Human Rights Act (“MHRA”) did not apply to an employee who did not live in Minnesota and previously traveled to Minnesota occasionally for work, even though the employee reported to supervisors based in Minnesota and the employee’s employment agreement contained a provision which stated it was to be governed by Minnesota law. In other words, the court held that the employer did not violate the MHRA because the MHRA does not protect a worker who does not live or work in Minnesota at the time of his termination.

The Case 

The case arose when a long-time employee was let go as a result of a business unit reorganization and replaced by a black woman. Subsequently, the employee sued his former employer under the MHRA.  During his employment, the employee reported to executives based in Minnesota. However, he lived and worked in Kansas. The employee had previously traveled to Minnesota about four times a year as part of his employment but began traveling less in 2017. His last business trip to Minnesota was in November 2019. The employee regularly traveled for work to places other than Minnesota in 2020 and 2021 prior to his termination.

Of relevance, the MHRA protects an “employee” from discrimination. The statute defines “employee” as “an individual who is employed by an employer and who resides or works in the state.” Therefore, to resolve the current dispute, the court needed to determine whether the employee “works in” Minnesota.  In doing so, the court relied on Kuklenski v. Medtronic USA, Inc., which considered the same question. In Kuklenski, the Court held that “to work in [Minnesota] . . . [workers] must perform duties of [their] jobs within the limits, bounds, or area of Minnesota,” and that the MHRA “requires at a minimum some physical presence within the geographic boundaries of the State of Minnesota.” Additionally, the court noted that a worker’s past presence in the state is not enough to warrant the MHRA’s protection. Here, because the employee had not been to Minnesota for twenty months immediately preceding his termination, the court determined he was not an employee covered by the MHRA and dismissed his MHRA claims. The employee’s past presence in Minnesota did not change this conclusion.

The court noted that this determination will ultimately occur on a spectrum. At one end is the case where the employee traveled to Minnesota on a single occasion 20 years ago – this worker is not protected by the statute. On the other end, is the employee who has worked in an office in Minnesota every single day for the past 20 years but happens to be on a business trip in New York when terminated – this worker is protected. There will be many situations that exist in the middle of the spectrum, and close calls will need to be determined by juries.

Finally, the court considered the implications of the choice-of-law clause in the employment agreement, which stated that Minnesota law governed. Although the employee argued that this clause allowed him to bring an action against under the MHRA irrespective of whether he was an employee, the court disagreed. It determined that choice-of-law clauses direct the courts to apply the requested state law when said laws are applicable. Stated differently, the choice-of-law clause in the employee’s employment agreement could not compel the court to apply the MHRA—an inapplicable state law—simply because the clause requests that that Minnesota state law be applied.

Bottom Line

Minnesota employers with remote workers living and working in other states should make note of two important takeaways. First, Walton indicates that the worker’s location—not the employer’s—is the relevant factor in determining whether a worker works in the state, and that past presence in the state might not be enough for the protections of the MHRA to extend to the employee. Second, employers should also make note of the limitations the court imposed on choice-of-law clauses in employment agreements.