Minnesota Employment Law Updates

By Corie J. Anderson - Peters, Revnew, Kappenman & Anderson, P.A.

June 26, 2023

Minnesota Legalizes Recreational Cannabis (Marijuana)

Certainly this is one that everyone in Minnesota is talking about, so how can I not write about it? In the words of our very own Bob Dylan…the times, they are a-changin’! Effective August 1, 2023, cannabis (marijuana), will be a lawful consumable product for all (not just medical marijuana). You can find the law here. Notably, what many employers do not know, is that Minnesota has a Lawful Consumable Product Act that prohibits employers from disallowing employees to consume lawful products outside of work hours. While it was intended for alcohol and nicotine back in the day, it is now certainly inclusive of cannabis.

Under the new law, employers are prohibited from refusing to hire a job applicant or discharge or discipline an employee who uses cannabis outside of work. Employers can still prohibit the use, impairment, or possession of cannabis during work hours, while on-site, or when operating company vehicles, machinery, or equipment. Employers may establish written work rules regarding cannabis (i.e., add this to your zero-tolerance policy) and may take disciplinary action against employees who violate these policies.

The legalization of cannabis also impacts Minnesota’s Drug and Alcohol Testing in the Workplace Act (DATWA), which is already one of the most employee-friendly in the nation. Cannabis is no longer included in the definition of “drug” under DATWA, and drug and alcohol testing does not include cannabis testing, unless stated otherwise. Thus, if you test, you will need to update your drug and alcohol testing policy. When it comes to pre-employment drug testing, employers are prohibited from making cannabis testing a condition of employment, unless state or federal law mandates it. Additionally, employers cannot reject job applicants solely based on positive cannabis test results, unless such action is required by state or federal law.

However, employers with a state-compliant drug and alcohol testing policy (I say this because I’ve seen plenty in handbooks that are not compliant) can request cannabis testing if they have a reasonable suspicion that the employee is under the influence of drugs and alcohol, has violated the employer’s written work rules around cannabis, has injured themselves or another employee, or has caused a work-related accident or was operating or helping to operate vehicles, machinery, and equipment involved in a work-related accident.

What about random testing? Employers may require employees to undergo random cannabis testing if they are employed in safety-sensitive positions (defined as jobs where “impairment caused by cannabis usage would threaten the health and safety of any individual”).

In certain positions, cannabis and its metabolites are considered a drug and are subject to the drug and alcohol testing provisions in Minn. Stat. § 181.950 – 181.957. These positions include:

•  Safety-sensitive positions;
•  Peace officers;
•  Firefighters;
•  Positions requiring face-to-face care, training, education, supervision, counseling, consultation, or medical assistance to children, vulnerable adults, or patients receiving healthcare services;
•  Positions requiring a commercial driver’s license or operating a motor vehicle for which state or federal law mandates drug or alcohol testing;
•  Employment funded by a federal grant; or
•  Any other position for which state or federal law requires testing of a job applicant or employee for cannabis.

Parties involved in a collective bargaining agreement may agree upon a cannabis testing policy without specific limitations or restrictions, so long as it meets or exceeds the minimum standards and requirements for employee protection outlined in Minn. Stat. § 181.950 – 181.954. Existing collective bargaining agreements that already provide employee protections related to cannabis testing will remain in effect, as long as those protections exceed the minimum standards and requirements outlined in Minn. Stat. § 181.950 – 181.954.

Employee and job applicant protections provided under these new DATWA amendments do not apply to certain employees and job applicants. Exclusions apply when the nature of the work being performed requires those employees and job applicants to undergo cannabis testing due to specific circumstances where:

•  Federal regulations preempt state regulations regarding cannabis testing for those employees and job applicants;
•  Federal regulations or requirements are necessary for operating facilities under federal regulation;
•  Cannabis testing is conducted for security, safety, or protection of sensitive or proprietary data; or
•  State agency rules adopt federal regulations applicable to the interstate component of a federally regulated industry, and the adoption of those rules is for the purpose of conforming the non-federally regulated intrastate component of the industry to identical regulation.

What’s the end result? Employers who do not need to test for cannabis by law, may want to consider whether you wish to continue given the Minnesota Lawful Consumable Products Act, the potential for numerous positive tests for those otherwise not “impaired” based on testing that is not as reliable as say blood alcohol levels, and the fact that it will be hard to prove consumption at work unless actually observed. Recall, you can always discipline or terminate an employee for poor performance, for your reasonably believing they are under the influence, or attendance. None of those need to be supported by a drug test.

Minnesota Bans Non-Compete Agreements

Effective July 1, 2023, Minnesota law prohibits non-compete agreements for both employees and independent contractors. This new law applies to agreements entered into on or after that date. Thus, it is not retroactive, so existing non-compete agreements should still be considered valid. I say “should” because there is an argument to be made (that will be made) before the courts that two people in the same position can’t be treated differently in this regard. Specifically, if a non-compete must only be only so broad as to protect a business’ legitimate business interests, a plaintiff’s attorney may argue that it is not necessary or legitimate as other people performing the same work are free to compete.

Of further note, the ban on non-compete agreements does not extend to non-solicitation, non-disclosure, or agreements designed to protect intellectual property or confidential information. What about non-solicitation of employees? Again, I think this is going to be litigated to the extent a non-solicitation is linked to prohibiting a former employee from hiring away a current employee to work for a competitor. A plaintiff may argue that is an end-run around the law.

Two specific types of non-compete agreements are exempt from the ban: agreements made during the sale of a business or in anticipation of the dissolution of a business. What about a shareholders’ sale of their shares? The law is silent, but there was a proposed amendment during the writing of the legislation that would have specifically added that it applies to the sale of shares as well and it was not included in the bill. Accordingly, the legislature seems to have indicated that this is intended to be related to the wholesale sale of a business and just individuals’ sale of membership interests/stock.

Coming January 2026 – Minnesota Paid Family Medical Leave

Effective January 1, 2026, all employers with employees in Minnesota will be required to participate in the state-run paid family and medical leave program which provides both paid and protected leave. A 0.7% payroll tax will be introduced to fund the program, of which employers may deduct up to half (.35%) from employees’ wages. Employees are eligible after 90 days of employment. Once paid leave is completed, employees are entitled to their prior jobs or an equivalent position.

Employees are entitled to 12 weeks of paid leave for their own serious health condition or pregnancy, and up to 12 weeks for bonding, family care, safety leave, or a qualifying exigency. If both apply, leave is limited to a maximum of 20 weeks (not 24) total in a single benefit year. For instance, if an employee takes 12 weeks for pregnancy leave, they only have 8 weeks of bonding leave to use. Claims for leave must be based on a single event lasting at least 7 consecutive days, except for bonding purposes where the 7 day requirement does not apply.

The definition of serious health condition is a physical or mental illness, injury, impairment, condition, or substance use disorder involving:

•  Inpatient care in a hospital, hospice, or residential medical care facility, including any period of incapacity; or
•  Continuing treatment or supervision by a health care provider, which includes:
      •  A period of incapacity lasting seven or more days, along with subsequent treatment or incapacity related to the same condition. This treatment should occur two or more times within 30 days of the first day of incapacity, unless circumstances beyond the individual’s control prevent follow-up visits. It also includes treatment by a health care provider that results in a continuing regimen of treatment under their supervision;
      •  A period of incapacity due to medical care related to pregnancy;
      •  A period of incapacity or treatment for a chronic health condition that requires periodic visits (at least twice a year) for treatment by a health care provider or under their orders or referral. This condition should continue over an extended period, including recurring episodes of the same underlying condition, with the possibility of episodic periods of incapacity;
      •  A permanent or long-term incapacity caused by a condition for which treatment may not be effective. The employee or family member must remain under the continuing supervision of a health care provider, even if active treatment is not required; or
      •  A period of absence to receive multiple treatments, including recovery periods, by a health care provider or under their orders or referral. This applies to restorative surgery following an accident or injury, or a condition that would likely result in incapacity for more than seven full calendar days without medical intervention.

Bonding means the time that an employee spends with their biological, adopted, or foster child alongside the child’s birth, adoption, or placement. When it comes to family care, it means that an employee is taking leave to provide care to a family member with a serious health condition or is a military member.

Here’s one very important thing to note – the term family member encompasses a broad range of relationships including individuals who expect and rely on the employee for care, regardless of whether they live together (need not be blood relatives).

Safety leave is a type of leave that will be granted to employees who are experiencing domestic abuse, sexual assault, or stalking. The purpose of safety leave may include seeking medical attention, obtaining counseling services, seeking relocation to a safer environment, or seeking legal advice or taking legal action.

As you can imagine, there is a lot of “how is this going to actually work” questions out there. At this point, I understand the state is looking to hire about 400 people to run this program, and so certainly it is going to take the next few years for this to all get worked out. I will continue to post about this as we get closer to implementation. For those of you thinking about short term disability policies – your question about why you’d have it with this program in place is well founded.

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