Many employers struggled with the Sick and Safe Leave ordinances created by the cities of St. Paul and Minneapolis. At their most basic, the ordinances provide for sick and “safety” (for victims of abuse or stalking) leave to be accrued by employees working within the boundaries of St. Paul and Minneapolis. One problem encountered by employers was the difficulty of administration for employers with workers in multiple jurisdictions.
This was the problem experienced by ABM Industries in ABM Indus. Grps., LLC v. Serv. Emps. Int’l Union, Local 26. (D. Minn., 2019). When the ordinances were created, they had employees working in multiple locations, including St. Paul and Minneapolis. Benefit administrators and contract negotiators were tasked with first determining if employees were entitled to additional benefits, then determining when and where those employees would accrue the benefits. As ABM was unionized, this also included an analysis of its own collective bargaining agreement to determine if it was in compliance with the ordinance.
This analysis led to a negotiation of a collective bargaining agreement that the parties hoped would take the new legislation into consideration. This included allowing part-time employees with “three years or more service” to be eligible to use one sick day per year as well as the following language:
Employers will grant sick days mandated by ordinance or statute within the jurisdiction/application of such ordinance or statute. If the ordinance or statute provides for CBA exception, sick days will be granted per the ordinance or statute on the first of the following year.
However, the sick leave ordinance for both cities allowed employees to earn one hour of sick leave for every 30 hours worked, or over 69 hours of sick leave in regular full-time work year.
The parties also negotiated language that they hoped would help deal with any upcoming changes to the ordinances:
Should any of the provisions of this Contract . . . be held either administratively or judicially to be in violation of any applicable Federal, State or Local legislation, the Union and the Employer agree to meet to bargain any necessary changes or adjustments in this Agreement, including, but not limited to classifications and/or wage rates, so that compliance with such legislation shall be achieved. It is agreed, however, that such adjustments shall result in no (or minimum) overall financial cost to the Employer. It is provided, however, that such changes and/or readjustments must be lawful.
The parties never agreed that the employer was subject to the terms of the proposed Minneapolis and St. Paul Sick and Safe leave ordinances.
Prior to the date of imposition for the two ordinances, the parties met in accordance with the above language in effort to resolve any conflicts with the ordinances, but were unable to reach agreement. Two days before the ordinances went into effect, the Union filed a grievance, stating the employer failed to implement the Sick and Safe ordinances and was forcing employees to use vacation and floating holidays for sick leave rather than their intended uses.
The Employer defended itself by stating it was not subject to either the Minneapolis or St. Paul ordinance due to the fact the business did not “reside” within either City, but provided workers for business locations within those cities.
In his award, the arbitrator first found that ABM did not violate the collective bargaining agreement by forcing employees to use vacation and floating holiday for their unintended purposes (sick leave), but that it was subject to the Sick and Safe ordinances of both cities, and was required to allow employees to accrue sick leave at the rates required by the ordinances. In coming to that conclusion, the arbitrator found that as ABM had contracted with properties within Minneapolis and St. Paul and thus had a “substantial business presence” in both cities.
This resolution may come as a shock to many businesses within the Twin Cities metropolitan area. Most thought that as long as a business was located outside of the two major cities, they would be exempt from the requirements of the ordinances. The St. Paul ordinance’s rules state that the ordinance only applies if an employer “has a physical location within Saint Paul.” However, due to the language negotiated by the parties regarding new ordinances, the matter was put in the hands of the arbitrator, who made his decision based on the evidence that was available at the hearing.
While concerning, this decision was ripe for appeal to district court. Next week, we’ll detail the decision of the court, and talk about how these cases could apply to you. If you or your organization need assistance navigating the world of employee leave ordinances, contact the Wiley Law Office, for advice that works.