Minnesota Employment Law
In today’s economic environment, ex-employees may consider suing their former employer after losing their job. Employers often wonder:
- Do I need to state a reason to fire an employee?
- If a disgruntled ex-employee feels the termination was wrongful, can the employee sue?
The short answer is: It depends.
Minnesota, like most states, has at-will employment. What that essentially means is the employer can terminate employment at any time for any lawful reason—or for no reason at all. The only caveat is you cannot terminate your employees for a discriminatory reason like race or gender, nor can termination be retaliation against for reporting what the employee thinks is illegal activity or filing a worker’s compensation claim. Often employers mistakenly believe they are required to give two weeks notice before terminating an employee. That is just a courtesy, however, not a requirement, unless your employee handbook, policies, or procedures dictate otherwise.
Exceptions to At-Will Employment
There are some situations where at-will employment is not the standard. The most basic occurs when there is a contract to work for a certain period of time. If you agree in writing that work will last for three years, for example, the employee is no longer at-will. Both employer and employee are bound by the terms of the contract. There may be language in the contract that allows you or your employee to terminate employment early, but this contract employment, not at-will employment.
An employment contract may also state it is at-will, but at the same time provide a termination procedure. For example, a contract may provide that you, the employer, must provide the employee with certain written warnings about performance and an opportunity to remedy behavior before being terminated. Courts are divided about whether this actually changes the at-will relationship.
Independent contractors may also be subject to the at-will doctrine. Independent contractors perform services much like an employee, but are categorized differently for tax and other purposes. There are a variety of legal rules for distinguishing between an employee and independent contractor. The most basic test is who exercised control over the time, place, and manner of completing the work. Unless the contract provides otherwise, most independent contractors are at-will.
Even though your employer can fire you in an at-will relationship for virtually any reason, it cannot be a discriminatory reason. There are certain “protected classes” in the law that are protected from discrimination. Your employer cannot fire you because of your race, national origin, religion, gender, age, or disability. There are some exceptions when a person’s gender, religion, or national origin may be a bona fide occupational qualification. In those instances, it is not considered illegal discrimination to use one of those classifications for employment decisions. Perhaps the most famous example is that of the United States President: The Constitution requires the President to be a natural born citizen of the United States. His or her national origin is a bona fide occupational qualification.
So what constitutes wrongful termination if your employment is at-will? If an employee feels they were fired for a discriminatory reason, they may file a legal claim against their employer. If an employee believes their employer has engaged in illegal activity and reports it to government regulators, the employer cannot terminate the employee for that reason. It would be considered retaliation or a violation of “whistleblower” statutes. Employers cannot fire an employee for filing a legitimate worker’s compensation claim. These are narrow exceptions, however. Under at-will employment, an employee has to prove that the employer was more than just unreasonable or unfair to succeed with a wrongful termination claim.
If an employer has a contract with an employee for a specific term and the employee is fired before the end of that term, the employee may have a claim for wrongful termination. Employers sometimes set forth termination procedures in employment contracts or in employee handbooks. If an employer fails to follow the termination procedure it established, the employee may also have a claim for wrongful termination. Whether the employee may have a claim is very dependent on the specific facts of the situation.
How a Employment Attorney Can Help
By hiring an experienced employment attorney you can minimize your company’s liability of being involved in a wrongful termination lawsuit. An employment attorney can revise your company handbook to ensure that the procedures and policies are clear and abide by all applicable laws. It is highly recommended that companies update their company handbook on a yearly basis to ensure they remain compliant with all applicable laws. Employment attorneys can also draft separation agreements to protect your company from being sued by a former employee. As your company grows, it will become governed by different laws depending on the number of employees. An employment attorney can help your business conform to applicable laws. If your business is being sued by an past employee, an employment lawyer can defend your company in a timely and cost effective manner. As a CEO or executive, your focus should stay will growing and managing your business, not defending it from a stressful and possibly frivolous lawsuit.