Extraterritorial Reach of Minneapolis Sick Time Ordinance Rejected, Yet Again

When we last left the Minneapolis PSL law, the Minnesota Court of Appeals had affirmed a district court decision temporarily enjoining Minneapolis from enforcing its Sick and Safe Time Ordinance against businesses outside the City limits.  The Supreme Court of Minnesota in December 2017 declined to review the Court of Appeals’ decision, which left the appeals decision in place.  The Ordinance went into effect on July 1, 2017 with regard to businesses within the City limits only.

Since those decisions dealt only with the request for a temporary injunction, the case continued on the plaintiff’s further request that the Minneapolis PSL law be permanently enjoined because it was preempted by state law and because its purported application to businesses outside the City whose employees work within the City exceeded the City’s legislative authority.

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To attempt to address the territorial issue, in March 2018, the City amended its ordinance in two respects. Under the Ordinance, an employee who works in Minneapolis at least 80 hours per year is entitled to accrue PSL time. The amendments added that employees accrue PSL time for hours worked “within the geographic boundaries of the city” and could use that time only when scheduled to work “within the geographic boundaries of the city.” Continue reading

From a Paid Sick Leave Fracas in Minneapolis to a Minnesota Melee

It began when Minneapolis and St. Paul passed PSL ordinances last year. Business interests sought to enjoin implementation of the Minneapolis ordinance. I wrote about that fracas in Minneapolis here.

In mid-January 2017, the court enjoined implementation of the Minneapolis ordinance with regard to employers located outside of the city’s geographical boundaries but denied the injunction with regard to employers within those boundaries.  My post about that decision is here. That case is on appeal.

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Less than two weeks following the court’s decision, Minnesota House Republicans introduced a bill, HF 600, to preempt political subdivisions from requiring employers to provide, among other things, paid leave. That bill, which would void the Minneapolis and St. Paul PSL ordinances, passed the House on March 2, 2017 and was sent to the Senate. Two business days later, a Senate Democrat introduced SF 1794, which would require Minnesota employers to provide PSL. Touché, as they say.

Where will this PSL Minnesota melee end?  Applying my simplistic political analysis described generally here, Republicans control both chambers of the legislature, but not in sufficient numbers to overrule a governor’s veto.  As a result, Democrats are not likely to muster the majorities in both chambers to pass the PSL bill; if the Senate approves the preemption law, Democratic Governor Mark Dayton is likely to veto it, a veto which the Republicans will be unable to overturn. If that speculation turns out to be correct, the Minnesota appellate courts will have the last word in deciding whether and to what extent the Minneapolis and St. Paul PSL ordinances survive, at least for now. All part of life’s rich PSL pageant, described here.

The Extraordinary Extraterritorial Reach of Paid Sick Leave Laws

The Hennepin County judge’s decision last week to enjoin enforcement of the Minneapolis Sick and Safe Time Ordinance against any employer outside the City’s geographic boundaries, i.e., an extraterritorial employer, prompts some further reflection. Just how does a PSL Ordinance give a political subdivision the right to grant PSL benefits to extraterritorial employees and impose obligations on extraterritorial employers?

It starts with the definitions of “employer” and “employee.” For example, the Minneapolis SST definition of “employer” does not include any geographic limitation. An “employee” is someone who works 80 hours a year in Minneapolis.  Put these two definitions together and the Ordinance requires an extraterritorial employer to comply with the Ordinance with regard to any employees it sends into Minneapolis for 80 hours a year.  The judge noted that plaintiffs in the litigation include some with employees who come from places “as far away as China” and work at least 80 hours annually in Minneapolis.globe-1339833_640

It seems impossible for any political subdivision to believe it has the right to dictate the PSL benefit for extraterritorial employees. Whenever I reach “impossible” in my analysis, I remind myself of the White Queen’s retort to Alice, in Alice in Wonderland, about believing the impossible: “Why, sometimes I’ve believed as many as six impossible things before breakfast,” she said. I suspect Minneapolis merely copied this extraterritorial concept from the long list of other PSL laws that have it.

The concept raises some questions.  Does the extraterritorial employee accrue PSL only while working in the PSL jurisdiction or everywhere that employee works? Can the extraterritorial employee use accrued PSL when working or scheduled to work somewhere other than the PSL jurisdiction? San Francisco and New York clarify that employees accrue PSL only for hours worked within the respective jurisdiction and can use that time only when scheduled to work in San Francisco or New York, as the case may be. Other PSL’s are silent on these issues. Continue reading

Business-Plaintiffs Win Some, Lose Some in Effort to Enjoin Minneapolis Paid Sick and Safe Time Law

A cadre of business interests which sought to enjoin enforcement of the Minneapolis Sick and Safe Time Ordinance won half a loaf last week. A Hennepin County District Court judge declined to enjoin the Ordinance with regard to businesses within the geographic boundaries of Minneapolis but enjoined its enforcement with regard to businesses outside those boundaries.

Judge Mel I. Dickstein’s decision deals only with the injunction request, not the merits of the claims. The judge said he will schedule a hearing on the merits before July 1, 2017, the effective date of the Ordinance.

The plaintiffs had argued that state law preempted the field which included employer-provided sick and safe leave and that, as a result, Minneapolis did not have the authority to enact the Ordinance. They also argued that the Ordinance conflicted with state law. The judge rejected both arguments.

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The plaintiffs had also argued that the Ordinance was invalid because of its extraterritorial reach. The Ordinance defines “employee” as one who works in Minneapolis for at least eight (80) hours in a year. Through this “long-arm” provision, any employer in the world who sends an employee to Minneapolis for as few as 80 hours per year must comply with the Ordinance. In enjoining enforcement with regard to these “extraterritorial” employers, Judge Dickstein noted that Minneapolis “is not free to impose its public policy initiative on companies beyond its territorial jurisdiction.”

This litigation, no doubt, is being watched closely by two other Minnesota cities. St. Paul’s sick and safe time ordinance has the same long-arm “employee” definition as Minneapolis. Duluth has a task force working on a recommendation concerning a safe and sick law.