Employment & Labor Blog

Best Practices

Online Ad Targeting Presents Risks for Employers and Landlords Alike

Last fall ProPublica revealed that the U.S. Equal Employment Opportunity Commission has cited employers for discriminatory targeting of job ads on Facebook. The ads in question excluded women and older workers through use of the micro-targeting tools provided by Facebook’s advertising platform. Early in 2019, a similar practice came under fire by the Department of Housing and Urban Development in the context of housing ads and just this past December, Facebook began expanding its efforts to prevent advertisers from discriminating and announced that it will include housing ads in its searchable public database Ad Library. The move is seen as an effort to fend off criticism that its ads could be used to target audiences based on certain characteristics. For those unfamiliar with online advertising, many platforms, including Facebook, allow ad buyers to select groups of users to be shown the ads. This practice is perfectly appropriate when used for many goods and services, such as targeting certain video game advertisements at younger users. However, where it is used to prevent a protected class from becoming aware of job openings or available housing, it runs the risk of being classified as illegal discrimination. Employers may have considered the ad targeting to be an efficient way to use limited marketing funds to reach out to those most likely to apply. Unfortunately, government regulatory agencies do not see it that way, and cost-savings are unlikely to be viewed as a legitimate defense to allegations of intentional or unintentional discrimination. For its part, Facebook reports that it has made changes to its platform to limit the ability of users to target advertisements for certain products in ways that might run afoul of anti-discrimination laws. Facebook removed the ability to target by age, gender, or zip code for housing, employment, and credit offers. While Facebook has some of the most accurate and granular demographic details about its users, it is not the only company to offer similar advertising targeting functions. Any company advertising for a product or service, particularly those in highly regulated areas such as employment or housing, should take care to ensure that it is not inadvertently creating a discrimination claim when it decides how it will target the users who will be shown ads.

February 5, 2020

Labor Law

Tick Tock: A New Year’s Resolution for All Employers with Employees Who Work in Minneapolis

With the coming New Year, it is a perfect time for Minnesota employers to ensure that they are complying with the new laws and ordinances that affect employment in the state. This post is intended to highlight a few areas that deserve particular focus as 2019 comes to a close. Minneapolis Wage Theft Prevention Ordinance We have written extensively about the Minneapolis Wage Theft Ordinance, and the requirements it imposes on employers. See one such post here. In brief, the ordinance requires employers to provide all employees with specific information about the terms of employment, including: the start date of employment, the employer’s policy on tips, the employer’s overtime policy, and notice of the employee’s rights under the Minneapolis Sick and Safe Ordinance. The ordinance takes effect on January 1, 2020, and requires notices to be provided to all new employees at the time of hire, and for all current employees by the end of the first payroll period in 2020. Before the end of the year, make sure that your business has provided the required disclosures, or has a plan to do so in the first few weeks of January. State-Wide Wage Theft and Disclosure Requirements Employers who are not located in Minneapolis would also be wise to review their documentation, as the 2019 Minnesota Wage Theft Prevention Act imposes similar record keeping and disclosure requirements as the Minneapolis ordinance. A previous post on this topic can be found here. The state law took effect as of July 1, 2019. It requires employers to provide additional information on pay stubs, and imposes criminal penalties on individuals who engage in wage theft from employees. Other Recent Changes Other relatively recent changes that would be wise to review include: Sick and Safe Time Ordinances in Minneapolis, St. Paul, and Duluth Minimum wage increases in Minneapolis and St. Paul This is not a comprehensive list, and employment laws change quickly and subtly, with potentially significant consequences for noncompliance. If it has been more than a few years since you last spoke with an employment attorney about your business practices, doing so should be at the top of your list of New Year’s resolutions.

December 12, 2019

Exercise Caution When Terminating Employee-Owners

In closely-held businesses, it is common for owners to also work as employees. Often, their primary source of income is not from distributions of the business’ profit, but rather their regular salary. This is particularly true for service professions such as accountants, consultants, and medical professionals. The dual role of employee and owner can cause unexpected problems for a business when an owner-employee is terminated. In a typical at-will employment relationship, an employer can fire an employee for any legal reason, or no reason at all. However, where employees are also owners of a closely held business, Minnesota law may give them a reasonable expectation of continued employment solely by virtue of their status as an owner. Minnesota law can impose liability on companies and majority owners for actions which violate the reasonable expectations of the owner (shareholder, member, or partner) of a closely-held business. In these cases, an employer who terminates an employee-owner for poor performance or misconduct may face an unexpected lawsuit for breach of fiduciary duty and wrongful termination. These claims carry the risk of significant damages, are expensive to defend and are often (but not always) outside the scope of insurance coverage. The termination of an employee-owner also raises questions about their continued ownership interest. Many businesses assume that an employee-owner who is terminated from employment will automatically have his or her ownership interest terminated, and can be excluded from management of the business. In fact, absent an agreement to the contrary, an employee-owner who is terminated will usually still have the right to remain an owner of the company, along with an ongoing right to request information about the company and vote on matters that come before the owners. This can be particularly problematic if the terminated employee finds a new job and begins to compete with the business. The Importance of Clear Documentation There are solutions to this issue. Under Minnesota law, written agreements between owners are presumed to reflect the reasonable expectations of the owners concerning the matter they cover. Thus, the employee-owner and business can enter into contracts that clearly describe the circumstances in which an employee-owner can be terminated, what impact that termination will have on ownership or management rights and (if termination of employment results in termination of ownership as well) how the ownership interest will be redeemed. Most small businesses know that they should have these documents. They may have even exchanged drafts and participated in meetings to try to agree on terms. However, because they want to save money for growing the business, or simply don’t have time to focus on legal documentation, they leave the drafts incomplete and unsigned or fail to have the documents reviewed by an experienced attorney. Unfortunately, when the dispute ultimately comes up, an unsigned draft or an incomplete agreement may not be worth the paper it’s printed on. Experience tells us that employee-owners are rarely willing to sign legal documents that limit or waive rights once disputes are already brewing. The best time to reach an agreement about the terms of an employee-owner’s relationship with the business is at the outset of the business, or at least while all of the owners are getting along and working in the same direction.

October 4, 2018

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John A. Kvinge

Online Ad Targeting Presents Risks for Employers and Landlords Alike

Tick Tock: A New Year’s Resolution for All Employers with Employees Who Work in Minneapolis

Exercise Caution When Terminating Employee-Owners

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