The Employer E-Letter: Labor and Employment Law News
from the Duluth, Minnesota law firm of
Hanft Fride, A Professional Association.
Co-Editors, Scott A. Witty, saw@hanftlaw.com and Richard R. Burns, rrb@hanftlaw.com, or 218.722.4766. Please feel free to forward this e-mail or share it with others. If there are other topics of interest to you or any other suggestions concerning this newsletter, please let us know.
This Month’s Topics:
- ROUND 2 OF PAYCHECK PROTECTION PROGRAM LOANS
- PTO POLICIES MAY CREATE CONTRACTUAL RIGHT, DESPITE DISCLAIMERS IN EMPLOYEE HANDBOOK
- RECESSION OF TRUMP-ERA NATIONAL LABOR RELATIONS BOARD (“NLRB”) MEMORANDA SIGNALS SHIFT TO BIDEN ADMINISTRATION’S APPROACH
- USE OF EMPLOYER EMAIL SYSTEM BY UNION STOPPED
- Tip Of The Month
ROUND 2 OF PAYCHECK PROTECTION PROGRAM LOANS
The Small Business Administration recently began accepting applications for a second round of Paycheck Protection Program (“PPP”) loans. Note that businesses can apply now even if they did not receive a previous PPP loan. Some of the criteria that businesses applying for a second time (first time applicants fall under different criteria) will need to demonstrate are 1) they have utilized all of the proceeds from their first PPP loan; 2) their company has less than 300 employees (note that there are affiliation rules and certain exceptions to consider for jointly owned or related companies); and 3) that the company had a 25% decrease or more in gross receipts in any 2020 quarter compared to that same quarter in 2019. This is a program that qualifying businesses should consider to seek assistance from the federal government because of the pandemic.
PTO POLICIES MAY CREATE CONTRACTUAL RIGHT, DESPITE DISCLAIMERS IN EMPLOYEE HANDBOOK
On February 3, 2021, in Hall v. City of Plainview, A19-0606, the Minnesota Supreme Court held that a general disclaimer stating that an employee handbook should not be construed as a contract may be not effective to prevent a paid time off (PTO) policy contained in the handbook from forming a contract.
In 2017, the City of Plainview terminated an employee who amassed 1,778.73 hours of PTO. The City’s Personnel Policies and Procedures Manual (the Handbook) contained a detailed PTO policy. The Handbook also included, however, disclaimers stating that the provisions in the Handbook “should not be construed as contract terms,” and that it was “not intended to create an express or implied contract of employment between the City of Plainview and an employee.” The employee sued the City for breach of contract, arguing that the PTO policy formed a contract requiring the City to pay him the accrued PTO. The trial court dismissed his case and the court of appeals upheld the trial court’s decision. The employee appealed to the Minnesota Supreme Court.
The Court, relying on its prior case law, determined the PTO policy at issue contained sufficiently definite terms to create a unilateral employment contract requiring the employer to payout accrued PTO upon certain employment terminations. The provisions in the PTO policy amounted to “more than general statements of policy; rather they provide[d] specific information and procedures by which employees [could] comprehend and take advantage of the City’s PTO program.”
The City, however, argued that the disclaimers included in the Handbook meant that none of the policy provisions, including the PTO provisions, created an enforceable contractual right. The Minnesota Supreme Court disagreed. The Court held that the general language in the Handbook’s disclaimer was not sufficiently clear to renounce the more specific terms of the PTO policy. As such, the Court remanded the case to the trial court to determine whether a contract existed and whether the City owed the employee PTO pursuant to the Handbook’s policy.
Though the Court held the PTO policy created a unilateral contract in this case, it also noted that “[e]mployers are not rendered helpless by our decision. As we have discussed, well-drafted, specific, disclaimers can prevent the formation of contractual rights stemming from employee handbook provisions, including provisions concerning PTO.”
In light of the Court’s decision in Hall v. City of Plainview, it is important that employers review their Employee Handbooks to determine whether it forms a unilateral contract. Employers should pay close attention to their policies and procedures in employee handbooks regarding any form of compensation. A well-drafted disclaimer can prevent an Employee Handbook from creating any contractual rights.
RECESSION OF TRUMP-ERA NATIONAL LABOR RELATIONS BOARD (“NLRB”) MEMORANDA SIGNALS SHIFT TO BIDEN ADMINISTRATION’S APPROACH
On February 1, 2021, the newly appointed Acting General Counsel of the NLRB, Peter Sung Ohr, rescinded ten of the Trump administration’s guidance memoranda relating to the National Labor Relations Act (“NLRA”). The prior memoranda were generally favorable to employers and those persons seeking to take action against a union for unfair labor practices. The recession of these memoranda signals that the Biden administration is committed to quickly and materially rolling back the statutory interpretation changes made during the Trump administration. Among other things, the now rescinded memoranda placed a higher burden on unions to justify their positions in fair representation and fee objector cases. The rescission of these memoranda signals the Biden administration’s pro-union stance, which likely impacts on employers. Therefore, employers will need to be extra vigilant to both keep up with the guidance that has been rescinded as well as the new and likely sweeping changes that will be made by the Biden administration. Employers should review their policies and procedures to ensure they are consistent with NLRB interpretations and decisions.
USE OF EMPLOYER EMAIL SYSTEM BY UNION STOPPED
An employee at a call center for T-Mobile sent a mass mailing to 600 employees advertising a union meeting over a weekend to learn about a union-organizing drive. The D.C. Circuit affirmed a prior district court ruling that there was no violation of the National Labor Relations Act (NLRA) when the employer reprimanded the employee. T-Mobile was able to show it had a rule against mass mailings, except by specific employees. This decision is consistent with the decision in Caesar Entertainment Corp., et al, Case 28-CA-060841 (2019), which recognized a presumptive right for workers to send union solicitations, but such solicitations could be blocked so long as the company barred other similar solicitations. Caesar Entertainment concluded there is no statutory right to use an employer’s email systems or other information technology. Communication Workers of America v. NLRB, Case No. 20-1112 (2021), D.C. Circuit (2021).
TIP OF THE MONTH: There can be no dispute that COVID-19 vaccinations are making workplaces safer than they have been in the past year. However, OSHA recently released guidance recommending that employees continue to wear face coverings and remain physically distant from co-workers even if the employee(s) has been vaccinated because it is not known at this time how vaccination affects transmissibility of the Corona Virus. Reduced transmission of COVID-19 means greater productivity from your workforce, so safety vigilance is recommended.
2021 EMPLOYMENT AND LABOR LAW SEMINAR:
Due to COVID-19, we will not be holding the Annual Employment and Labor Law Seminar in March 2021. We expect the seminar to resume in 2022.
Hanft Fride’s business and trial lawyers are located at 1000 U.S. Bank Place, in Duluth, Minnesota. Visit our website at www.hanftlaw.com for general information on the firm and our attorneys. Our employment lawyers include Tom Torgerson, Rob Merritt and Scott Witty. Richard Burns is now of Counsel.
The information provided in this E-letter is general in nature and should not be used as a substitute for professional services and advice. The communication and receipt of this information is not intended to create an attorney-client relationship. Readers should consult with their legal counsel before taking any action on matters covered in this E‑letter.
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Copyright 2020 by Hanft Fride, P.A. All rights reserved. Hanft Fride, A Professional Association, 1000 U.S. Bank Place, 130 W. Superior Street, Duluth, MN 55802. Phone 218.722.4766; Fax 218.529.2401.