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.
- VALENTINE’S GIFTS TO EMPLOYERS
- COURT RULES “PREPONDERANCE OF THE EVIDENCE” IS APPLICABLE FLSA STANDARD OF PROOF
- NLRB RE-INSTATES EMPLOYEE-FRIENDLY STANDARD FOR EMPLOYEE STATEMENTS ABOUT UNION ORGANIZING
- BLUNT CRITICISM INSUFFICIENT TO PROVE CONSTRUCTIVE DISCHARGE
- TIP OF THE MONTH
VALENTINE’S GIFTS TO EMPLOYERS
On Valentine’s Day, the National Labor Relations Board Acting General Counsel issued a memorandum rescinding nearly 20 policy memos issued by his predecessor. Many of the rescinded memoranda had been criticized for going beyond existing law. General Counsel memoranda are nonbinding guidance issued directly by the Board’s General Counsel often to instruct and inform staff about the General Counsel’s priorities or opinions on various issues. It is guidance that in addition to informing staff, informs employers, unions and workers how issues should be considered. The stated motivation for rescinding was that there was an unsustainable backlog of cases and various issues that he planned to publish new guidance to replace some of the rescinded memos, although others will be abandoned. Most important for a significant number of employers is the rescission of the prohibition on non-competes and “stay or pay” agreements. GC 23-05 and GC 23-08. In addition, GC 23-05 involved the McLaren Macomb Decision and rescinded the restriction of offering employee severance agreements that prohibited the employee from making disparaging remarks about the employer and from disclosing the terms of the agreement itself. This Board decision had reversed a prior decision abandoning a prior precedent in finding that offering similar agreements to employees was not unlawful by itself. Another rescinded memo was GC 22-04, which addressed attendance at mandatory work meetings to discuss labor issues; a determination that was later accepted by the Board in Amazon.com LLC, 373 NLRB No. 136 (2024). Therefore, one should not assume that these meetings are proper or improper. In a related action, a Texas District Court enjoined enforcement of the FTC action to prohibit non-competes and “stay or pay” provisions. It is unlikely that an appeal will be pursued by the current administration. One must recall, however, that there are various State restrictions on non-competes, particularly in Minnesota, and they need to be reviewed in order to determine whether or not a non-compete or related provisions are enforceable. Finally, a Texas District Court enjoined the enforcement of a revised FLSA exemption salary level implemented by the Biden administration. Again, it is unlikely that an appeal will be pursued as the old rule was one that was promulgated by the first Trump administration.
COURT RULES “PREPONDERANCE OF THE EVIDENCE” IS APPLICABLE FLSA STANDARD OF PROOF
In E.M.D. Sales, Inc. v. Carrera, sales representatives employed by an international food distributor brought a lawsuit against their employer alleging the distributor failed to pay them overtime wages required under the Fair Labor Standards Act (FLSA). The distributor argued that the employees were “outside salesman,” a category exempt from FLSA overtime requirements. Under the FLSA, the burden falls on the employer to prove that an employee falls into one of the categories of employment exempted from the Act’s overtime requirements. A trial court ruled that the distributor failed to prove that the employees fell under an exempted category of the FLSA. On appeal, the Supreme Court reversed the ruling. The trial court had required the employer to prove the employees were exempt through “clear and convincing evidence.” However, the Supreme Court held that the employer only needed to prove as such by a “preponderance of the evidence,” which is a lower standard of proof than the “clear and convincing” standard.
This case represents a win for employers, as the applicable lower standard means it will be easier to prove an employee is not covered by the FLSA if an exempt category is applicable. However, employers should be wary – the burden still lies with employers to prove employee FLSA status. Employers should carefully consider, review and document their employees’ positions and job characteristics with an attorney before making any wage or overtime decisions that deviate from the FLSA’s wage and overtime requirements. E.M.D. Sales, Inc. v. Carrera, 145 S. Ct. 34 (2025)
NLRB RE-INSTATES EMPLOYEE-FRIENDLY STANDARD FOR EMPLOYEE STATEMENTS ABOUT UNION ORGANIZING
Recently, the National Labor Relations Board (“NLRB”) issued an opinion in Siren Retail Corp. d/b/a Starbucks, which modified the test for determining what an employer may say during an organizing campaign. Previously, employers could make statements to employees about the possible negative effects of unionization, such as employees losing the right to individually address workplace issues with management. In Siren Retail, the NLRB ruled that statements like this could reasonably be understood to threaten employees with the loss of an established workplace benefit. Now, such statements must be reviewed on a case-by-case basis and “must be carefully phrased on the basis of objective fact to convey an employer’s belief as to demonstrably probable consequences beyond his control.” This change to a more employee-friendly standard may not last long if revisited under Trump-appointed board members. Siren Retail Corp. d/b/a Starbucks, 373 NLRB No. 135 (2024).
BLUNT CRITICISM INSUFFICIENT TO PROVE CONSTRUCTIVE DISCHARGE
Earlier this year, a federal judge ruled that a former fire department employee had not been constructively discharged, despite the employer providing him with some “blunt” criticism of his work. The employee argued that he had been constructively discharged through the harsh criticism, removal from his supervisory duties, and reduced pay. The judge ruled that this did not make his working conditions objectively intolerable, as is typically required to establish a constructive discharge claim. The judge looked objectively at the situation to determine if a reasonable person in the same position would have found the conditions demeaning and intolerable. This ruling is in line with prior decisions that found that loss of supervisory responsibilities, a feeling of being unfairly criticized, dissatisfaction with work assignments, and loss of pay are insufficient to constitute constructive discharge. Pronk v. City of Rochester, CV 22-3090 (MJD/SGE), 2025 WL 253408 (D. Minn. Jan. 21, 2025).
Employers considering disciplinary action, demotion or termination of an employee that recently requested or returned from FMLA leave must not ignore the fact that timing matters. Courts will often look to see how much time has passed between the employee’s protected activity (under the Family and Medical Leave Act) and the employer’s adverse employment action. The closer these two events are in time, the greater risk of liability under a retaliation claim. How long is long enough? Unfortunately, there is no hard and fast answer. What we do know, however, is solid documentation supporting reasons for disciplinary action (i.e. performance, conduct etc.) favors the employer’s odds of successfully defeating such claims.
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 2025 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.