Minnesota Legislature Moves Omnibus Jobs and Economic Development Bill Forward

On May 17, 2023, the Minnesota state legislature passed an omnibus jobs and economic development and labor funding bill that could have serious implications for employers in the state, including a ban on noncompete clauses, paid sick leave, pregnancy and nursing accommodations, and sweeping worker safety protections. The bill, SF 3035, passed both houses of the legislature after differences between versions of the bill were hashed out in conference. The bill is now on its way to Governor Tim Walz’s desk for his signature.  Here are some key provisions of the bill.

Quick Hits

• The Minnesota legislature passed a sweeping jobs and economic development bill.
• The bill would ban noncompete clauses in employment contracts and expand protections for lactating employees.
• The bill would implement a new statewide paid sick leave law starting January 1, 2024.
• The bill would implement new protections for workers in the warehouse industry, as well as, amend protections for workers at meatpacking and poultry processing facilities.

Ban on Noncompetes

A key part of the omnibus bill is a new provision that would make “any covenant not to compete contained in a contract or agreement … void and unenforceable.” However, such covenants would still be valid if they are “agreed upon during the sale of a business” or in the “anticipation of the dissolution of a business” in that the seller or former parties involved in a business may be restricted from forming a competing business “within a reasonable geographic area and for a reasonable length of time.”

Notably, employers would still have some protections as the bill would exclude nondisclosure agreements, agreements to protect trade secrets or confidential information, nonsolicitation agreements (including nonsolicitation of customers and employees), and agreements restricting the use of contact lists or to prohibit soliciting customers of the employer.

The article would be effective July 1, 2023.

Statewide Paid Sick Leave Amendments

The bill would create statewide paid sick and safe leave entitlements. Specifically, employers would be required to provide employees at least one hour of paid sick leave for every 30 hours worked, up to 48 hours per year. Similar to the Minneapolis and St. Paul sick and safe leave ordinances, the bill would require employers to permit employees to carry over up to 80 hours of accrued leave per year and would apply to employers with at least 1 or more employees. Stay tuned for a separate blog on this new law and its implications. This section would be effective on January 1, 2024.

Additionally, the bill would amend the retaliation provision included in the state’s sick leave law. Specifically, an employer would not be able to “discharge, discipline, penalize, interfere with, threaten, restrain, coerce, or otherwise retaliate or discriminate against” an employee who seeks to take a leave of absence under the law.

Nursing Mothers, Lactating Employees, and Pregnancy Accommodations

The bill contains amendments to strengthen protections for nursing mothers and “lactating employees.” The bill would remove language limiting reasonable paid breaks for expressing milk for infant children during the first twelve months following a birth. Further, the bill states that break times “may” run concurrently with other breaks already provided. It also would eliminate one of the protections currently available for employers whereby they are not required to provide breaks if doing so would “unduly disrupt the operations of the employer.” The bill also adds language that lactation rooms must be “clean, private, and secure.”

The law would specify that a “temporary leave of absence, modification in work schedule or job assignments” and “more” frequent “or longer” break periods are reasonable accommodations for pregnant employees. It also adds a provision requiring employers to provide notice to employees of their rights milk breaks and pregnancy accommodations.

The article would be effective July 1, 2023.

Worker Safety Requirements in the Warehouse Industry

The bill would adopt sweeping worker safety requirements for the warehouse industry, including requiring warehouse employers to provide employees with “written descriptions” regarding quotas, implementing protections for worker breaks, and providing employees with a right to request their work speed data and aggregated employee work speed data. Under the bill, workplaces with “high rates of injury” as defined by the bill may be subjected to investigation by the commissioner of labor and industry and may be required to hold “safety committee meeting” for two years. The bill would empower the commissioner to seek penalties against employers and provide employees with a civil cause of action for damages, injunctive relief, and other equitable relief, including reinstatement and back pay.

The new provisions would be effective on August 1, 2023.

Revisions to Packinghouse Workers Bill of Rights

SF 3035 would make several revisions to a Minnesota law titled “Packinghouse Workers Bill of Rights.” Among other revisions, the bill would add “poultry processing” to the definition of “employer” under the law and would require additional information be provided to employees “at the start of employment.” Notably, the bill would add a “cause of action for damages for the greater of $1,000 per violation or twice the employee’s actual damages, plus costs and reasonable attorney fees” and greater fines for “intentional” violations. It would further empower the commission or labor and industry to fine employers between $400 and $1,000 for each violation payable to the employees aggrieved.

Ogletree Deakins’ Minneapolis office will continue to report on developments with respect to the bill and will post updates on the Minnesota blog as additional information becomes available. Important information for employers is also available via the firm’s webinar and podcast programs.