MN Supreme Court Data Decision Impacts All Public Employers

In August of last year, I provided training to Minnesota public employers regarding an appeals court case to keep an eye on that held that a public employee could challenge his performance review in a hearing before the Minnesota Department of Administration. On August 6, 2014, the Minnesota Supreme Court ruled on the issue in a case that will surely impact how public employers conduct performance evaluations going forward.

Schwanke v. Minnesota Department of Administration, No. A12-2062, involved a Steele County sheriff sergeant’s data practice challenge to portions of his performance review. Minn. Stat. 13.04, subdiv. 4(a) has long provided a procedure for Minnesota citizens to file for an administrative hearing to challenge the “accuracy or completeness” of data maintained on that individual by a government entity. The Schwanke case is unusual in that a government employee invoked the statute to challenge the accuracy of information in his performance review, a type of data that had not previously been challenged under the statute.

The Minnesota Department of Administration had dismissed the challenge without proceeding to the merits of Sergeant Schwanke’s claims. The Department noted that it did not have the resources to have hearings for performance review challenges and it did not feel the statute was written to provide hearings for challenges to performance reviews. The Minnesota Court of Appeals reversed, stressing that the plain language of the statute authorizes a hearing procedure under the circumstances.
The Minnesota Supreme Court affirmed, and held that the sergeant could challenge the accuracy and completeness of objective information in the performance review. The Court cited, for instance, that the employee claimed that the employer inaccurately stated that he was assigned to a project, which impacted his review. That sort of factual information can be challenged: “[The] opinions and judgments rest on facts that are objectively verifiable, and thus falsifiable.” An employee may challenge false information that is part of the basis for his or her performance review under Minn. Stat. 13.04, the Court held.

Importantly, in a footnote that could be rather significant, the Court also noted that if a subjective opinion or judgment in a supervisor’s evaluation lacks “completeness,” the employee may challenge the basis for the subjective judgments within a performance review. In my view, this part of the opinion is more troubling and could potentially lead to a multitude of performance review challenges. Employees and supervisors may often disagree about the importance of certain aspects of work the employee performed. This part of the opinion counsels that supervisors should have clearly defined goals and specified rubrics upon which an employee will be evaluated that are clearly communicated to the employee so the employee cannot manufacture other potential work tasks that he or she completed that the employee feels is important, but the supervisor does not.

The Court was careful, however, to note that the subjective decisions of a supervisor (so long as those decisions are based on verifiable and complete facts) cannot be challenged. “[M]ere dissatisfaction with a subjective judgment or opinion cannot support a challenge under the Data Practices Act.” Of course, this is important limiting language. So long as the factual information is accurate, a supervisor’s review should remain intact after a hearing. Now more than ever, supervisors must be careful to conduct clear, accurate, and complete performance reviews, and ensure that their subjective evaluations of an employee’s work are thorough and based on actual and verifiable facts.

It is unclear how Minnesota public employees will use this interpretation of the Data Practices Act. What is clear, however, is that the case will likely lead to legislative clarification in the next session, as the Minnesota Department of Administration is not equipped (or funded) to handle a large volume of performance review challenge hearings. In the interim, public employers must beef up their performance review processes to curtail a flood of challenges, whether those be justified or manufactured.
Please contact me if you have further questions on this case or its impact on your organization.