Minnesota Appeals Court Upholds Minneapolis Paid Sick Leave Partial Injunction

On Monday, September 18, 2017, the Minnesota Court of Appeals upheld the district court’s temporary injunction banning the enforcement of the Minneapolis Paid Sick Leave ordinance against non-resident employers. The Court of Appeals declined to extend the temporary injunction to the entire ordinance, and thus, employers located in the City of Minneapolis must still comply with the ordinance.

The ordinance, which went into effect on July 1, 2017, requires employers to provide paid sick leave to employees working within Minneapolis. In October 2016, the Minnesota Chamber of Commerce, along with other employers and business associations, challenged the ordinance. The Chamber alleged Minneapolis lacked the authority to enact it, the ordinance conflicts with state law, and the ordinance “extends the City’s power beyond its boundaries.” The district court declined to issue a temporary injunction prohibiting the entire ordinance as the court determined the Chamber was unlikely to be successful regarding its arguments related to Minneapolis’ authority to enact the ordinance and the conflicts with state law. However, the district court did issue a temporary injunction with respect to non-resident employers. The district court determined the balance of harms favored the Chamber and a temporary injunction was reasonable because businesses would be harmed by spending “substantial time and resources in advance of the Ordinance’s effective date in order to comply with its mandates” but Minneapolis was “unlikely to be subjected to substantial harm from a temporary injunction”.

In the unpublished decision issued today, a three judge panel determined the district court did not abuse its discretion when it did not issue a temporary injunction banning the ordinance in its entirety. The Court of Appeals noted that the district court weighed all applicable factors in their decision. Similarly, in regards to the temporary injunction prohibiting enforcement against employers outside of Minneapolis, the Court of Appeals concluded that “the district court properly exercised its discretion by temporary enjoining enforcement of the ordinance against nonresident employers.” As a result, employers located outside Minneapolis still do not need to comply with the ordinance.

The legal dispute surrounding the ordinance is far from over. The Chamber indicated it planned to appeal the decision related to the full injunction to the Minnesota Supreme Court. Furthermore, this decision is solely based on the temporary injunction, and does not reflect a court decision on the merits of the Chamber’s challenges to the ordinance.

If you have any questions about anything in this article, please contact Caitlin Andersen at 952-921-4619 or candersen@seatonlaw.com or any of the Peters, Revnew, Kappenman & Anderson, P.A. attorneys.