Court: Minneapolis sick leave regulation can move forward — but only for employers in the city

Minneapolis can move forward with plans to require companies to provide paid sick leave to employees, Hennepin County Judge Mel Dickstein ruled Thursday.

But he issued a temporary injunction to block Minneapolis from forcing companies based outside the city to comply in their Minneapolis operations.

The Minnesota Chamber of Commerce had requested an injunction to halt enforcement of the sick leave mandate, arguing that it conflicted with and was pre-empted by state law, and was an example of local government overreach. Dickstein agreed only with the third point.

"The public policy supporting the Minneapolis ordinance may be a good one, and the city is free to impose it on companies resident within its borders. But the city is not free to impose its public policy initiative on companies" outside the city limits, Dickstein wrote.

The sick leave ordinance — scheduled to take effect July 1 — says workers who spend at least 80 hours in the city per year should earn sick time, regardless of where their company is based.

Lawyers and city officials are trying to determine the scope of the ruling and pinpoint which companies must comply.

But Minneapolis officials said the judge validated the core tenets of the sick-leave ordinance.

"The court's ruling today confirms what I believed all along, that our earned sick and safe time ordinance does not conflict with and is not pre-empted by state law," Mayor Betsy Hodges said in a statement.

Christopher Larus, who represents the Chamber and other plaintiffs from the business community, said they plan to appeal the judge's decision on the requests that were denied.

"We hold firm to our view that the Minneapolis ordinance is contrary to state law and creates an unlawful and unworkable patchwork of employee compensation standards that's harmful to business and our state's economy as a whole," Larus said.

Larus said he was glad to see Dickstein's order that Minneapolis should not enforce the regulation on companies outside its boundaries until after a hearing on the case or a further court order.

The city will review the court's order and comply with it as the case moves forward, City Attorney Susan Segal said. A trial date has not been set.

Dickstein's concerns about the extent of Minneapolis' rule were evident at a hearing in December, where he questioned how it could apply to employees from other states or countries who spend a fraction of their workweek in the city.

Those concerns are premature, Segal said in December, as the city has not yet released its plan for enforcement.

"I have every confidence that they will be reasonable rules and they will be focusing on employers whose employees have a significant enough nexus with the city of Minneapolis in order to make it enforceable," she said at the hearing.

Larus and Segal submitted written arguments to the judge in December outlining their views on the ordinance.

The sick-leave rule clearly applies to any employee who works 80 hours per year in the city, Larus' argument says.

The judge's ruling Thursday could also have a significant impact on St. Paul workers and employers.

Both cities passed sick leave ordinances last year, and St. Paul leaders have been watching the Minneapolis case closely to see if they should expect a similar challenge. Duluth also is considering a sick time requirement.

Dickstein's ruling is "more or less consistent with our belief all along that we weren't pre-empted by state law," said St. Paul City Attorney Sammy Clark.

St. Paul's ordinance, like Minneapolis's, applies to anyone who works within the city 80 hours a year or more.

Larus, of the Chamber, said he expects "there will be scrutiny given to any other ordinance that tries to have these broad mandates. In our view they certainly would be susceptible to the same legal challenge."

But Clark said the interpretation of that language is key, and both cities are still developing their enforcement processes.

Meanwhile, state legislators are discussing who should control labor regulations like sick time and the minimum wage.

Some lawmakers would like to override the cities' sick leave ordinances, but they would face strong opposition from DFL Gov. Mark Dayton and other DFLers who back such workplace reforms.

Staff writers Adam Belz and Emma Nelson contributed to this report.

Jessie Van Berkel • 612-673-4649