October 2017 – Vol. 19, No.10
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:
- Anti-Tip Sharing Statute Provides Wrongful Termination Claim, MN Supreme Court Decides
- Requirements If You Have a Hostile Work Environment
- Single Racial Slur Can Trigger Title VII
- OMB Halts Pay Data Collection Portion of EEO-1
- Tip Of The Month
Anti-Tip Sharing Statute Provides Wrongful Termination Claim, MN Supreme Court Decides
We all know that Minnesota is an “at-will” employment state, meaning that an employee or an employer may terminate the employment relationship for a good reason, bad reason or no reason at all. The oft-cited limitation on this doctrine is that employers cannot terminate an employee for a reason the legislature (by statute) has determined is unlawful (i.e. anti- discrimination statutes). In a recent case, the Minnesota Supreme Court concluded that the anti-tip sharing statute (177.24, subd. 3) and the statute providing the civil remedies available to an employee when an employer violates the tip-sharing statute (177.27, subd. 8) create a private case of action for wrongful termination when an employer terminates an employee for failing/refusing to share tips. The case involved a bartender who sued his employer for allegedly terminating his employment for refusing to share his tips with other staff. The employee argued that the employer violated Minn. Stat. 177.24, subd. 3, which prohibits employers from requiring employee to share tips. Citing case precedent, the district court dismissed the employee’s claim on the basis that the MN Fair Labor Standards Act, which includes the anti-tip sharing provision, does not contain specific language prohibiting an employer from terminating an employee for refusing to share tips, and thus does not authorize an action for wrongful termination. The Court of appeals reversed, stating that Minn. Stat. 177.27 permits claimants to bring a civil action for redress of a violation of the anti-tip sharing statute and seek wrongful termination-like damages (i.e. back pay). The MN Supreme Court upheld the Court of Appeals decision, finding that an employer’s threat to terminate an employee for failing to do something imposes a “requirement” to do that act, in this case sharing tips in contradiction to the statute. The Court also noted that finding otherwise would allow employers to circumvent the protections of the MFLSA by terminating employees who do not follow the employers’ illegal demands. This case is significant to the extent that it provides a rare exception to the “at-will” employment doctrine that is not explicitly stated in a statute. Restaurant employers should also be aware that an employee with a claim under the anti-tip sharing statute can seek redress for wrongful termination in addition to the other compensatory damages available under the statute.
Requirements If You Have a Hostile Work Environment
Plaintiff, a minority race employee, worked for the educational division of McGraw-Hill, and among other claims, stated that he had a hostile work environment. The Court noted that hostile work environment harassment occurs when “the workplace is permeated with discriminatory intimidation, ridicule and insult that is sufficiently severe or pervasive to alter the condition of the employee’s employment.” In this case there was a determination that there was no causal relationship between the alleged acts of harassment and his race. Part of his claim was that he was treated unlike the rest of the sales team, but it was noted that other sales team members had worked with the supervisor previously, and it was suggested that evidence showing interdepartmental politics and personality conflicts do not create a genuine case for harassment. Finally, there was one race-related comment that allegedly was overheard by the employee. In regard to this creating a hostile work environment, the Court suggested that cases required that a plaintiff show more than a few occurrences over a course of years in order to successfully argue hostile work environment. Micah Stone v. McGraw-Hill Financial (8th Cir. 2017).
Single Racial Slur Can Trigger Title VII
The U.S. 2nd Circuit Court of Appeals recently ruled that a single instance of a supervisor directing a racial epithet could create a hostile work environment. In the case, a supervisor referred to a black employee as a “N*****.” The 2nd Circuit did not rule that use of the N-word on its own in every instance could form the basis of a hostile work environment claim under Title VII, but did state that the lower court was incorrect in finding that the one-time use of the word could never support a claim. In addition, the 2ndCircuit indicated that the lower court misapplied its precedent and should have also taken into account additional evidence of a hostile work environment presented by the employee. The 2ndCircuit stated that hostile work environment claims are typically the result of multiple incidents, but that a single incident that is severe enough can serve as the basis for a claim. Daniel v. T&M Protection Resources LLC, Case No. 15-560 (2nd Cir. April 2017).
OMB Halts Pay Data Collection Portion of EEO-1
The Office of Management and Budget (OMB) recently issued a memorandum to the U.S. Equal Employment Opportunity Commission implementing an immediate stay of the new Component 2 to its Employer Information Report (EEO-1) Form. This revision to the EEO-1 Form would have required all employers with 100 or more employees who currently submit the EE0-1 Form to add summary compensation and hours worked data to their annual disclosure of data about employees’ gender, race, and ethnicity. The OMB has initiated a review of the pay data collection aspects of the revised EEO-1 Form to assess its effectiveness. At this time, it is unclear whether they will further revise the EEO-1 Form. In the meantime, affected employers are only required to submit Component 1 of the EEO-1 Form which collects data on race, ethnicity, and gender. The revised deadline for filing remains March 31, 2018.
TIP OF THE MONTH: Salaried employees in general must be paid for every day they perform any work. However, salaried employees on intermittent FMLA leave (1/2 days) may be on unpaid leave, assuming they chose not to use any available sick leave, vacation or personal leave.
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 2017 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.