Minnesota Termination Laws

Firing someone or facing termination in Minnesota isn’t as simple as it might seem. Minnesota termination laws have specific rules that both employers and employees need to follow to avoid legal trouble. This guide breaks down the key points about at-will employment, legal reasons for firing, and how to handle wrongful termination claims. Stay informed to protect your rights and make sure everything is handled properly.

This Guide Covers

Legal Considerations for Termination in Minnesota
At-Will Employment in Minnesota
Lawful Termination in Minnesota
Legal Protections During Termination in Minnesota
Terminated Employee Benefits in Minnesota
Layoffs in Minnesota
Resignations in Minnesota
Legal Cases Related to Wrongful Termination in Minnesota

Legal Considerations for Termination in Minnesota

Terminating an employee in Minnesota comes with legal responsibilities. Employers need to understand and follow state and federal laws to avoid legal troubles and keep the process fair.

  • Discrimination Laws: Employers cannot fire someone based on protected characteristics like race, religion, national origin, color, sex, age, marital status, family status, sexual orientation, gender identity, or disability. The Minnesota Human Rights Act (MHRA) prohibits such discrimination. Rather, the decision to terminate should be based on justifiable business grounds. Employers must also comply with federal laws like Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), and the Genetic Information Nondiscrimination Act (GINA). These regulations restrict discrimination based on various protected characteristics. Violating them can result in serious consequences.
  • Protection Against Retaliation: Terminating an employee for engaging in protected activities is illegal. The Minnesota Whistleblower Act protects workers who report legal violations or improper conduct. Employers must not fire employees for filing discrimination complaints, participating in investigations, or whistleblowing. 
  • Severance Agreements: Employers offering severance packages must ensure that these agreements comply with state and federal laws. The agreements should include key elements like consideration and a release of claims, following statutes such as the Older Workers Benefit Protection Act (OWBPA). This guarantees both parties are protected and the severance agreement is lawful.
  • Obligations for Final Wages: Under the Minnesota Payment of Wages Act, employers must pay all earned wages and commissions immediately upon separation or within 24 hours after the employee requests payment. This includes unpaid wages and any accrued vacation or paid time off (PTO). If the employer doesn’t pay within this timeframe, the employee can claim a penalty equal to their average daily earnings for each day the payment is late, up to 15 days. 
  • Documentation and Recordkeeping: Employers are required to keep thorough and precise records. It’s important to clearly and impartially document the reasons for termination. In the event of a legal dispute, proper documentation strengthens the employer’s decision by showing the termination was for valid reasons.

At-Will Employment in Minnesota

What is At-Will Employment?

Minnesota follows the employment-at-will doctrine, allowing employers to terminate employees for any reason, or no reason at all, as long as it doesn’t violate laws or involve discrimination. However, there are limits to this freedom, including implied contracts or exceptions related to public policy that can restrict an employer’s ability to fire an employee without cause.

What are the Exceptions to At-Will Employment in Minnesota?

In Minnesota, there are several exceptions to “at-will” employment, including:

  • Public Policy Violation: Employers in Minnesota cannot terminate employees for reasons that violate established public policies, such as firing someone for refusing to engage in illegal activities or exercising their legal rights.
  • Implied Contract: While employment in Minnesota is generally at-will, exceptions can arise through implied contracts. For instance, if a company’s handbook suggests that employees can only be fired for specific reasons, this may be viewed as creating an implied contract. Terminating an employee in violation of such agreements can result in wrongful termination claims, where the employee may seek damages for lost wages and other benefits.
  • Discrimination: Minnesota state law and federal laws forbid firing employees based on protected characteristics outlined under anti-discrimination laws. Violations can lead to lawsuits and potential penalties for the employer.

Employment Under Contract in Minnesota

Employment contracts in Minnesota can be written or verbal. These contracts cover important details like job length, salary, benefits, and conditions for termination. These agreements are often used by employers to guarantee employee performance and safeguard confidential information.

Employment contracts may also include non-compete clauses and rules about intellectual property, helping employers protect their business. In unionized workplaces, collective bargaining agreements outline the terms of employment and the rights of both parties.

Employers in Minnesota oftentimes require confidentiality agreements to protect sensitive information during or after employment. To enforce these agreements, the employer usually offers something valuable, like a raise or promotion.

Lawful Termination in Minnesota

Legal Grounds for Termination in Minnesota

Not all terminations need to feel fair, but they must be legal. Lawful reasons for termination in Minnesota include:

  • Misconduct: When an employee in Minnesota engages in misconduct or violates workplace standards or codes of conduct, the employer can justify termination. This includes actions like harassment, theft, insubordination, or dishonesty that deviate from company policies.
  • Poor Performance: Employers in Minnesota have the legal right to fire workers for performance-related reasons, such as persistent poor work, not meeting objectives or standards, or being unable to carry out necessary duties.
  • Violation of Company Policies: When an employee disregards the company’s regulations about professional conduct, technology use, or confidentiality, they may be fired legally. 

How Do I File a Wrongful Termination Claim in Minnesota?

A wrongful termination claim occurs when an employee is fired for illegal reasons, such as discrimination or retaliation. In Minnesota, wrongful termination may arise if an employer dismisses someone due to discrimination based on race, gender, religion, age, disability, or other protected characteristics. Further, terminating an employee in retaliation for reporting illegal activity or exercising legal rights, such as whistleblowing, can also lead to a wrongful termination claim.

To file a wrongful termination claim, the employee should contact the Minnesota Department of Human Rights to report discrimination or retaliation. This involves submitting a formal complaint and providing evidence that the termination violated state or federal laws. Employees who believe they were fired under whistleblower protection can also file claims under Minnesota Statutes 181.932, which safeguards employees who report unlawful practices.

For more information, check out our detailed guide to firing employees in Minnesota.

Legal Protections During Termination in Minnesota

Numerous state and federal laws provide protection for employees in order to guarantee fair treatment and prevent unlawful activities like discrimination and retaliation. In Minnesota, employee protections consist of:

  • Minnesota Human Rights Act: The Minnesota Human Rights Act (MHRA) prohibits employers from terminating employees based on protected characteristics such as race, color, religion, national origin, sex, marital status, disability, age, sexual orientation, or gender identity. Any termination based on these factors is illegal.
  • Minnesota Whistleblower Act: The Minnesota Whistleblower Act protects employees from acts of retaliation, including termination, if they report legal violations or misconduct within the workplace. It ensures that employees cannot be fired for raising concerns about illegal activities or unsafe practices.
  • Minnesota Payment of Wages Act: The Minnesota Payment of Wages Act requires employers to pay all earned wages and any unused vacation or paid time off to employees upon termination. This act ensures that terminated workers receive their final paycheck promptly, avoiding wage disputes.
  • Title VII of the Civil Rights Act of 1964: The federal Title VII of the Civil Rights Act requires employers with 15 or more employees to avoid discrimination based on race, color, religion, sex, or national origin. The law covers all aspects of employment, including hiring, firing, promotion, compensation, and working conditions.
  • Age Discrimination in Employment Act: The Age Discrimination in Employment Act (ADEA) protects workers in Minnesota aged 40 and older from age-based discrimination. 
  • Genetic Information Nondiscrimination Act: The Genetic Information Nondiscrimination Act (GINA) prohibits discrimination based on genetic information in all aspects of employment, including hiring, firing, pay, job assignments, promotions, layoffs, training, benefits, and any other terms or conditions of employment.
  • Americans with Disabilities Act: The Americans with Disabilities Act (ADA) prohibits workplace discrimination against individuals with disabilities. 
  • Family and Medical Leave Act: The Family and Medical Leave Act (FMLA) provides legal protection to employees in Minnesota during termination by ensuring that eligible workers can take up to 12 weeks of unpaid, job-protected leave for specific family and medical reasons without risking their jobs. This includes leave for the birth or adoption of a child and caring for a family member with a serious health condition. Employers with 50 or more employees must maintain health benefits during this leave and cannot terminate employees for using their FMLA rights.
  • Occupational Safety and Health Act: Minnesota OSHA (MNOSHA) is a state-run program approved by federal OSHA. By offering secure and healthy working environments, this program aims to protect employees in both the public and private sectors. 

Terminated Employee Benefits in Minnesota

Fired employees in Minnesota may qualify for various benefits based on the circumstances of their dismissal. Some of the benefits include:

  • COBRA Benefits: The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows employees who have been terminated to keep their group health insurance for a limited time after their employment ends, under certain conditions. Employers covered by COBRA are required to provide written notice to the employee and their dependents, outlining their rights to continue health coverage.
  • Unemployment Benefits: Terminated employees may be eligible for unemployment compensation through the Minnesota Unemployment Insurance Program, administered by the Department of Employment and Economic Development (DEED). To qualify, employees must meet specific requirements, including having worked a minimum period and actively seeking new employment.
  • Final Paycheck: Under Minnesota law, terminated employees are entitled to their final wages, including any accrued but unused vacation or paid time off (PTO). Employers must provide this payment promptly after dismissal or within 24 hours of the employee’s demand. The Minnesota Payment of Wages Act regulates how employers must handle the final payment of wages.
  • Severance Pay: Although not required by Minnesota law, some employers may offer severance packages based on company policy, employment contracts, or as part of a termination agreement.

Layoffs in Minnesota

Employers in Minnesota with 100 or more full-time employees must give 60 days’ notice before mass layoffs or plant closures, in line with the Worker Adjustment and Retraining Notification (WARN) Act. They need to inform employees, DEED’s dislocated worker unit, and local government officials.

Minnesota law also directs employers to notify DEED with details of the affected workers. DEED actively helps workers through the Dislocated Worker Program, offering resources and alternatives like shared work plans to reduce layoffs.

Resignations in Minnesota

Resignations in Minnesota can occur under a variety of circumstances, with the decision to leave being either voluntary, made by the employee, or involuntary, influenced by conditions imposed by the employer.

Voluntary Resignations

In Minnesota, employees can resign from their jobs at any time, for any reason, with or without notice, unless an employment contract or collective bargaining agreement states otherwise. 

Common reasons for resignation include finding a new job, dissatisfaction with the current position, or retirement. Employees who resign voluntarily usually do not qualify for unemployment benefits unless they can prove that their resignation was due to good cause, such as unsafe working conditions or a substantial change in job terms.

Involuntary Resignations

On the other hand, involuntary resignations, also known as “constructive discharge,” happen when an employer makes working conditions so unbearable that an employee feels compelled to quit. Harassment, discrimination, or unjustified changes in job duties often lead to this situation. When tied to illegal actions like discrimination, constructive discharge may qualify as wrongful termination under Minnesota law.

Legal Cases Related to Wrongful Termination in Minnesota

1. White Way Cleaners Settles for $42,250 Over Pregnancy Discrimination and Wrongful Termination

In the case, EEOC v. White Way Cleaners, the EEOC charged White Way Cleaners with pregnancy discrimination under Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act (PDA). 

Michelle Johnson, who worked as a presser, was transferred to a store counter position after becoming pregnant. The EEOC alleged that Johnson was denied a raise in her new role as a result of her pregnancy and transfer. After Johnson became pregnant again and notified her employer, White Way terminated her within days.

The company maintained a policy of transferring pregnant employees from the plant to store positions, which the EEOC argued was discriminatory. White Way chose to settle the case through a consent decree, agreeing to pay Johnson $42,250 in damages. 

White Way Cleaners also provided anti-discrimination training for its managers and employees and had to report to the EEOC for two years to prove compliance with federal civil rights laws. The consent decree also prohibited White Way from engaging in any further pregnancy discrimination or retaliating against employees exercising their rights.

Key lessons learned from the case:

  • Employers must not discriminate against pregnant employees or impose policies that treat pregnant workers unfairly.
  • Federal law, under the PDA, prohibits transferring, denying benefits, or terminating employees due to pregnancy.
  • Wrongful termination based on pregnancy can lead to major legal and financial consequences for employers.

2. Baywood Home Care Agrees to $30,000 Settlement for Wrongful Termination of Disabled Employee

In EEOC v. Baywood Home Care, the EEOC filed a lawsuit against the Minnesota-based home health care provider for disability discrimination. Laurie Goodnough, an employee with fibromyalgia and osteoarthritis, was terminated after supervisors saw her using a cane. The EEOC argued that Baywood Home Care failed to provide a reasonable accommodation or engage in the interactive process required under the Americans with Disabilities Act (ADA).

The lawsuit concluded with a $30,000 settlement for Goodnough. As part of the consent decree, Baywood Home Care was also required to train its management and employees on the ADA, specifically on reasonable accommodations and the interactive process. The company also agreed to revise its performance evaluation criteria to hold managers accountable for disability-related complaints and report disability discrimination complaints to the EEOC for three years.

Key lessons learned from the case:

  • Employers must engage in an interactive process to assess reasonable accommodations before making termination decisions based on disability.
  • Failure to follow the ADA’s accommodation requirements can lead to costly lawsuits and consent decrees.
  • Training management on disability discrimination and accommodation obligations helps prevent future legal issues.

Discover more about Minnesota Labor Laws in our in-depth guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.