Across State Lines

Employees in Minnesota have long had the legal right to review their own personnel files. Under a new state law that went into effect January 1, however, employers now are obligated to inform employees of that right, explicitly, at the time they are hired. To play it safe, “we’re recommending that companies amend their [employee] handbooks so that current employees are informed, too,” says employment attorney Shannon McDonough of Fafinski Mark & Johnson, PA, in Eden Prairie.

You knew that already? Or at least your company’s human resources people did? Good. Now, how about the Oregon legislation that also took effect at the start of this year? One provision requires that if a new hire in Oregon is required to sign a mandatory-arbitration agreement, the requirement must be put into a written employment offer given to the job applicant two weeks before the person’s first day of work, McDonough says. A similar provision applies to new hires who are required to sign noncompete agreements.

Why should a Minnesota company care about the peculiarities of Oregon employment law? No reason—unless the Minnesota firm employs someone in Oregon. Or even, perhaps, a regional sales rep whose territory includes Oregon.

Relations between employers and employees are governed not only by federal law but by the legislatures and courts of 50 states. The new laws in Minnesota and Oregon do not represent major shifts in either state’s approach to the employment relationship, McDonough says. “But they’re examples of things that can trip up somebody who isn’t careful.”

These quirks can come as a complete surprise not only to employers but to out-of-state lawyers. Minneapolis employment attorney Marshall Tanick, of Mansfield Tanick & Cohen, PA, calls them “gotchas!” Every state has some, Minnesota included (see “Minnesota’s ‘Gotchas’” at end). “Gotchas” can involve almost any facet of the employment relationship: overtime pay, commission-based pay, drug testing, required training, noncompete agreements, groups covered by anti-discrimination laws, and many more. And missteps in employment law can be very expensive.

Large national and multinational corporations know this. A company like General Mills, accustomed to operating in many states, “has teams of HR people and in-house lawyers and firms like ours” to keep track of it all, says attorney V. John Ella in the Minneapolis office of national employment-law firm Jackson Lewis, LLP. The employer most likely to get an ugly surprise, Ella says, is one just beginning to expand into other states: “You hire a sales rep or a specialist in Wisconsin or Des Moines or Los Angeles, assuming you can treat people the same way. Then at some point, you realize you’re no longer operating under Minnesota law.”