What an Employer Can Ask?

The Guidance recommends that employers not ask about convictions on applications. When such questions are asked during other parts of the pre-employment process, they should be job-related.

The Guidance states in no uncertain terms that use of arrest records is not job related.  However, when an applicant or current employee is arrested, the underlying conduct that led to the arrest can be considered if it renders the individual unfit for a position and only if the conduct is verifiable and not based solely on the fact of an arrest.

What Factors Should Employers Consider?

The EEOC has long declared that decisions based on a criminal conviction must consider these factors: (1) the nature and gravity of the offense(s), (2) the time that has passed since the conviction and/or completion of the sentence, and (3) the nature of the job held or sought. The new Enforcement Guidance, adds substance to these declarations.

Considering the nature and gravity of the offense(s) requires evaluating the harm caused, the legal elements of the crime, and the classification (i.e, misdemeanor or felony). As to the amount of time that has passed, employers should evaluate each case individually and consider studies of the risk of recidivism. As to the nature of the job, the EEOC says to look beyond the mere job title to analyze the duties, essential functions, and work environment.

Is an Individual Assessment Required?

While stopping short of saying that an individualized assessment is needed, the EEOC makes clear that “the use of a screen that does not include individualized assessment is more likely to violate Title VII.” An individualized assessment generally means that an employer (a) informs the individual that he may be excluded because of past criminal conduct, (b) provides an opportunity to the individual to demonstrate that the exclusion does not properly apply to him, and (c) considers whether the individual’s additional information shows that the policy as applied is not job related and consistent with business necessity.

Employer Best Practices

The Guidance suggests several “Best Practices” for employers who are considering criminal record information when making employment decisions.

• Eliminate policies or practices that exclude people from employment based on any criminal record;


• Train managers, hiring officials, and decision-makers about Title VII and its prohibition on employment discrimination;


• Develop a narrowly tailored written policy and procedures for screening for criminal records;


• Identify essential job requirements and the actual circumstances under which the jobs are performed;


• Determine the specific offenses that may demonstrate unfitness for performing such jobs;


• Identify the criminal offenses based on all available evidence;


• Determine the duration of exclusions for criminal conduct based on all available evidence;


• Record the justification for the policy and procedures;


• Note and keep a record of consultations and research considered in crafting the policy and procedures;


• Train managers, hiring officials, and decision-makers on how to implement the policy and procedures consistent with Title VII;


• When asking questions about criminal records, limit inquiries to records for which exclusion would be job related for the position in question and consistent with business necessity; and


• Keep information about the criminal records of applicants and employees confidential.

Bottom Line

The use of criminal records in hiring or employment decision making is not illegal, but the EEOC has made it very clear that employers using them must demonstrate that such use is “job related and consistent with business necessity.” The practices outlined above would be a good start in meeting that standard.

Macy, a police detective with the Bureau of Alcohol, Tobacco, Firearms and Explosives Agency (ATF), sought a transfer from Arizona to California. In January 2011, while still identifying herself as a man, Macy spoke with the Director of a California ATF crime lab about an open position at the lab. The Director allegedly indicated to Macy the job was hers, subject to a background check.

Before her background check cleared, Macy notified the Director that she was in the process of transitioning from male to female. Within a few days of providing this notice, Macy was told that the position was no longer available due to budget reductions. When Macy pursued the issue with an ATF counselor, she learned that the position had actually been filled by another candidate.

Macy then filed a complaint of sex discrimination with the agency. Her complaint was initially dismissed on the basis that Title VII did not cover claims of “gender identity” and “sex stereotyping.” On appeal, the EEOC disagreed, reasoning that Macy’s complaints fit within the category of “sex discrimination.” According to the EEOC, sex discrimination “occurs any time an employer treats an employee differently for failing to conform to any gender-based expectations or norms.”

The EEOC went on to note, however, that it did not intend to create a new “protected class” for transgendered people by virtue of its holding. Rather, the agency explained that discrimination against an individual because he or she is transgender “is, by definition, discrimination based on sex” since Title VII “encompasses not only a person’s biological sex but also the cultural and social aspects associated with masculinity and femininity.”

Bottom Line

Employers should be mindful that civil rights laws prohibit them from treating applicants and employees differently not just based on biological gender, but also the characteristics and social norms associated with gender.

Under Pepsi’s former policy, job applicants who had been arrested pending prosecution were not hired for a permanent job even if they had never been convicted of any offense.  Pepsi’s former policy also denied employment to applicants who had been arrested or convicted of certain offenses that were relatively minor.  The EEOC claims that more than 300 African Americans were adversely affected when Pepsi applied their criminal background check policy that disproportionately excluded African American applicants from permanent employment.

It has long been recognized that a blanket policy of denying employment to any person having a criminal conviction violates Title VII as such policies have an adverse impact on minorities. Courts are particularly skeptical of adverse employment decisions based solely on arrest records because statistics show that minorities are arrested at a higher rate, and many arrests never lead to convictions.  Given Pepsi’s reliance on arrest records, they made a good decision to settle the case.

As part of the settlement, Pepsi agreed to amend its background check policy, offer employment opportunities to victims of the former criminal background check policy, provide Title VII training for its hiring personnel and all of its managers, and supply the EEOC with regular reports on its hiring practices under its new criminal background check policy.

Bottom Line

The first lesson of the Pepsi case is that employers must avoid the use of arrest records as part of a background check.  They don’t really tell you if the applicant committed the crime or is likely to do so in the future.  Since statistics still tell us that people of color are arrested on a disproportionate basis, using this non-job related criterion in hiring decisions will eventually result in a disparate impact.

The second lesson is that, rather than implementing a blanket policy, employers are better served by utilizing a more “tailored approach,” screening out only those candidates convicted of an offense that would render them particularly inappropriate for the position in question.  For instance, candidates with poor driving records may be barred from positions involving a great deal of driving.  Likewise, where the position requires an employee to handle money, a candidate convicted of theft or embezzlement could be excluded.

In its letter, the EEOC points out that “some individuals cannot obtain a high school diploma, and therefore cannot obtain jobs requiring a high school diploma, because their learning disabilities caused them to perform inadequately on the end-of-course assessment.”  As a result, a diploma requirement may have the effect of screening out individuals with learning disabilities.

Under the Americans with Disabilities Act (ADA), “a qualification standard, test, or other selection criterion, such as a high school diploma requirement, that screens out an individual or a class of individuals on the basis of a disability must be job related for the position in question and consistent with business necessity.”   A qualification standard is “job related and consistent with business necessity” if it accurately measures an applicant's ability to perform the fundamental responsibilities of the job in question.

But, that measure is simply the first of two steps.   Once it is determined that the qualification standard being used to screen out applicants is job related and consistent with business necessity, the employer also must show that an individual who does not meet that standard is unable to perform the essential functions of the job, even with a reasonable accommodation.

The EEOC suggests the following accommodations in its letter: (a) “considering relevant work history” and/or (b) “allowing the applicant to demonstrate an ability to do the job’s essential functions during the application process.”  But, in the end, the EEOC makes clear that the employer is by no means required to prefer a learning disabled applicant over other applicants who are better qualified.

Bottom Line

While this is not an official opinion letter from the EEOC, it should cause employers who automatically include a high school diploma as a baseline requirement for positions to reconsider the business necessity of this requirement.  Moreover, even where the diploma requirement is job related and consistent with business necessity, employers need to be prepared to accommodate learning disabled applicants who lack a diploma, but who are capable of performing the essential functions of the job.

The letter does not address whether the EEOC will go so far as to require employers to affirmatively notify applicants that the employer will accommodate applicants who lack a diploma. Otherwise, learning disabled applicants would likely not apply to a position where a diploma is required.   Further guidance is needed to clarify this issue.

Currently, certain federal contractors and subcontractors must maintain affirmative action and undertake outreach efforts to increase employment of disabled individuals, and allow disabled individuals to voluntarily identify themselves as disabled individuals after receiving a job offer.

The proposed regulations would add to these requirements and would create new obligations for federal contractors and subcontractors (“contractors”), such as:

• Requiring contractors to invite applicants to self-identify as individuals with disabilities before and after an offer of employment using language prescribed by the OFCCP;


• Requiring contractors to conduct annual employee surveys to give employees an opportunity to self-identify as an individual with a disability;


• Requiring contractors to list all employment opportunities with the closest Department of Labor One-Step Career Center, and to enter into agreements with three specified agencies to reach more disabled individuals with job opportunities;


• Requiring contractors with written affirmative action plans to conduct annual policy reviews that, in part, require the contractor to: (1) identify vacancies and training programs for which disabled individuals were considered, (2) provide written reasons for not selecting the disabled individual for the vacancies and training programs and a description of considered accommodations, and (3) describe the nature and type of accommodations made for disabled individuals who were selected for hire, promotion, or training programs;


• Requiring a numerical hiring goal for disabled individuals, which may, as presently proposed, be within the range of 4% to 10%; and


• Requiring certain contractors to develop and implement written procedures for processing requests for reasonable accommodation, and disclose them to all employees.

These proposed changes will dramatically increase contractors’ obligations regarding disabled individuals.  Although it is possible that public comment will persuade the OFCCP to lessen the burden, drastic revisions to the proposed regulations is highly unlikely. 

We will provide an update as soon as these regulations are finalized.

When Ruble’s grandmother took a turn for the worse, he immediately informed the captain and arrangements were made bring in a replacement.  However, when the replacement was unable to arrive as scheduled, Ruble still left the vessel and followed his travel itinerary to get to his grandmother’s bed side.  He stayed with her almost constantly over the next few weeks until she finally passed away.

Meanwhile, the company terminated Ruble’s employment, so he sued in Federal Court claiming that his rights under the Family and Medical Leave Act (FMLA) were breached.  The company filed a motion to dismiss claiming:

1. Ruble did not provide adequate notice that he was requesting FMLA leave since he did not request time off to care for a parent, spouse or child; and


2. Ruble’s request for time off did not alert them to the fact that he was needed to “care for” his grandmother.

An employee need not cite FMLA specifically in the request; there need only be sufficient information to let the employer know that FMLA may apply to the leave.  Here, Ruble testified that he “said something about, you know, I need to get home to my grandma; my grandma took care of me, you know . . . I want to see her before she goes.”  From this, the judge concluded that the company had enough notice to know that the grandmother stood in an “in loco parentis” relationship to Ruble and that the request met FMLA’s threshold.

Then, the judge noted that while FMLA does not protect “mere visitation" of family members, Ruble’s statement could be enough convince a jury that it was a request to “care for” the grandmother.

Since there was enough evidence that the company should have known that Ruble’s grandmother had been like a parent to him, and since they could have known he wanted to care for her, the judge denied the motion to dismiss and sent the case on for a jury trial.  Ruble v. American River Transportation Co., No. 10-CV-00024 (E.D. Mo. June 29, 2011).

Bottom Line

Although this case was decided by a federal judge in Missouri, it may be reviewed by the Eighth Circuit Court of Appeals, whose decisions apply to Minnesota as well.   Therefore, it makes sense to decide that whenever an employee seeks leave for reasons that may even remotely touch upon FMLA, it is a good idea to conduct some additional inquiries and make sure you know, one way or the other, whether FMLA’s protections will apply.

Hosea Harrell was one of seven full time letter carriers for the United States Postal Service (“USPS”) station in Warrensburg, MO.  With the exception of the most senior employee, all of them were required under the office seniority system to work a rotating schedules that included every sixth Saturday.

Harrell asked not to work on Saturdays because his religion (Seventh-day Adventist) prohibits working on that day.  USPS offered to shorten the Saturday shift to let him attend worship services (which he declined) and asked the other carriers (without success) to give up their non-scheduled Saturdays to accommodate him.  Harrell also turned down an offer to transfer him laterally to another position or another office..

Ultimately, Harrell was fired after failing to report for a number of his Saturday shifts.  He then sued under Title VII for religious discrimination and failure to accommodate his religious beliefs. After the trial court dismissed his claims, he appealed to the Eighth Circuit Court of Appeals.

The appeals court explained in Harrell v. U.S. Postal Service, No. 10-1694 (8th Cir. March 31, 2011) that where an employee’s religious beliefs conflict with an employment requirement, the employer must show either (1) an offer of reasonable accommodation or (2) that such an accommodation would cause the employer to suffer an “undue hardship.” The Eighth Circuit ruled that the USPS had shown both because:

• Well-established law protects employers from having to provide an accommodation that violates a CBA.  Giving Harrell every Saturday off would essentially require USPS to unilaterally change his job to one with a fixed, weekday schedule.   CBA’s typically require, as this one did, employers to bargain with the union about creating new jobs.


• Harrel’s request would require the other five letter carriers to give up some of their Saturdays off.  Title VII does not require a religious-based accommodation with more than a minimal burden on co-workers.  Requiring the other staff to relinquish free Saturdays was more than just a minimal burden, according to the Court.


• Finally, Harrell’s accommodation would essentially put him at the top of the seniority list, contrary to the terms of the Warrensburg office seniority system.  Harrell argued that only seniority systems in CBA’s are protected, but the appeals court ruled that a religious accommodation is not reasonable if it violates any sort of bona fide seniority system.

Bottom Line

Good faith dialogue is always beneficial in resolving conflicts between religious beliefs and work requirements.  However, if the employer can’t accommodate without burdening the rights of other employees, the accommodation is an undue hardship.  The Eighth Circuit apparently believes that an accommodation that violates a collective bargaining agreement or other bona fide seniority system is by definition just such an undue hardship.

Specifically, the regulations reflect the view that the courts became overly restrictive in determining whether an individual with an impairment actually is covered under the law.  The EEOC now endorses a more expansive view of the ADA’s reach and places the focus more on the employer’s compliance with their non-discrimination and accommodation obligations.  To that end, the regulations and the EEOC’s comments that accompany them provide various important “rules of construction.”   For example:

• The regulations provide that the definition of “disability” shall be interpreted broadly;


• In order to be “substantially limited”, the regulations state that an individual need not be “significantly” or “severely” restricted in a major life.  The individual need only be limited in a major life activity compared to most people in the general population.  The definition of “substantially limits” is not meant to be a demanding standard.


• The EEOC has offered an expanded definition of “major life activities” through two non-exhaustive lists;


• The regulations provide that mitigating measures other than “ordinary eyeglasses or contact lenses” shall not be considered in assessing whether an individual has a “disability”. For example, an impairment will still be a disability even if it is controlled with medication;


• An impairment that is episodic or in remission is now a disability if it would substantially limit a major life activity when active;


• The definition of “regarded as” now simply requires a showing that the employer perceived the individual to be substantially limited in a major life activity, that an applicant or employee who is subjected to an action prohibited by the ADA (e.g., failure to hire, denial of promotion, or termination) because of an actual or perceived impairment will meet the “regarded as” definition of disability, unless the impairment is both transitory and minor;


• Individuals covered only under the “regarded as” prong are not entitled to reasonable accommodation.

These new regulations do not represent a substantial departure in the way we interpret the amendments that Congress passed back in 2008.  However, they are a vivid reminder of just how much those amendments changed the landscape back then and how vigilant employers must be to make sure that they are meeting their obligations under the law.

In October, 2008, St. Martin again applied for a vacant district chief position.  He vaguely recalled that Butler said “something referring to my medical condition” during the interview.  Again, despite being recommended by the panel, St. Martin was not selected.  Chief Butler told St. Martin that he was at a “competitive disadvantage” because he was not “involved daily in the operations and administration of department programs” and offered some suggestions about how to improve his record, provided that the activities did not “adversely impact your medical condition or the status of your disability.”

In January 2009, Butler emailed the City’s human resource department stating, among other things, that St. Martin “cannot do the job” of captain, and that he “would not willingly promote him unless I was forced to.”  St. Martin ultimately sued the city of St. Paul under the Americans with Disabilities Act of 1990 ("ADA") and the Minnesota Human Rights Act ("MHRA"). 

On March 4, 2011, United States District Court Judge David Doty granted the City's Motion for summary judgment.  St. Martin v. City of St. Paul, Civil No. 09-2045 (DSD-JJK) (D. Minn. March 4, 2011).

Plaintiff Feels Burned

Judge Doty first ruled that St. Martin was not disabled because, at most, he was unable to work only one particular job, namely fire captain.  Since he did not prove that he was prevented from working a broader range of jobs as a result of his impairment, he was not covered under the ADA.

St. Martin then argued that the City regarded him as disabled as evidenced by:

• Butler’s question about St. Martin’s injury at the first interview. Judge Doty ruled that this too limited to be taken as proof of discriminatory intent, particularly since Butler also knew that St. Martin’s had been medically cleared to return to work. 


• Butler’s suggestion that St. Martin was at a competitive disadvantage. Judge Doty ruled that this simply reflected the reality of St. Martin’s circumstances and that “[m]ere use of the word ‘disability’ is not evidence of discrimination” on that basis. 


• Butler’s statement that he would not promote St. Martin. Judge Doty explained that this simply showed that Butler didn’t like St. Martin. Mere “[d]islike of an applicant is not unlawful. 

Plaintiff's Claim Flickers Out

Even if St. Martin could prove that he was disabled, Judge Doty explained that he would still lose.  In the first promotion, Butler’s decision also to bypass the highest ranked candidate undermined St. Martin’s claim that he was singled out unfairly.  The second promotion simply offered a more qualified candidate with seven years of post-secondary education who was trilingual and had military leadership experience.  Therefore, St. Martin’s discrimination claim failed.  

Bottom Line

Knowing about a medical condition and acting on it are two very different things.  While it is generally advisable to focus on other matters in the hiring or promotional process, the fact that you know about a candidate’s medical issues does not automatically translate into an improper motive when an adverse decision is made.

Early in January, the EEOC announced the settlement of a class action against Supervalu in the amount of $3.2 million.  That case involved allegations that the employer had a "policy and practice" of terminating employees with disabilities at the end of their medical leaves, instead of bringing them back to work with reasonable accommodation.  Supervalu denied the allegations, stating that it had an effective return to work program, but wanted to settle the matter.

More recently, the StarTribune featured the story of a woman with brain cancer who was not permitted to return to after even after her physician completed forms stating that she would be able to return with only occasional absences.  The EEOC is suing her employer, Maxim Healthcare Services, for more than $300,000 in damages on behalf of her estate.

Most employers understand their obligations under the FMLA, which requires employers of 50 or more employees within 75 miles to provide 12 weeks of job protected leave.  But it becomes difficult when employees stay out longer than 12 weeks or the employee was not eligible for the FMLA, for example because the employee was not employed for the required one year and/or did not work the required 1250 hours in the preceding year.  In these cases, managers may argue that there is no obligation to take an employee back, citing performance, attendance or other issues for failing to return the employee to work.  However, recent cases brought by the EEOC demonstrate that employers must have effective return to work programs or risk litigation.

Overall, statistics published by the EEOC show that there were a record number of EEOC charges brought in 2010, with the greatest increase in claims brought under the Americans with Disabilities Act.

GINA applies to all employers covered by Title VII (those having 15 or more employees) and prohibits the use of genetic information in making employment-related decisions.  While you might be tempted to think that this applies only specialized testing in specific kinds of jobs, the new regulations define “genetic information” to include “information about the manifestation of a disease or disorder in an individual’s family member.” In short, family medical history.  The regulations go on to define “family” as broadly as one can imagine, specifically incorporating such extended family members as great-great grandparents, half-siblings and first cousins once removed.

Family Medical History and Employment-Related Medical Exams

These new regulations very pointedly address an employer’s obligations regarding family medical histories in the context of employment-related medical exams.  When employers seek such exams to assess leave requests, potential accommodations or other legal compliance matters, the employer should assume that a medical history will be taken and must take necessary steps to prevent obtaining this information inadvertently or otherwise.

To do so, the employer must direct the health care practitioner conducting the exam not to provide any genetic information in submitting a report on the examination.  The regulations contain a sample of such a request that can be provided in writing to the person conducting the exam.

The regulations are even stricter in regard to medical examinations to determine the person’s ability to perform a job, either on a pre-employment or fitness for duty basis.  In this setting, simply telling the health care provider not to submit family medical histories in not sufficient – the employer must instruct the examiner not to collect any such information at all.

Bottom Line

Employers subject to GINA should review their practices regarding what information is to be obtained from an employment-related examination, as well as what the examining practitioner will be told to do.  Because it is quite common for doctors to request a family history in just about any type of examination, it is critical to make sure that they do not expose the employer to liability without knowing it.

The push is part of the EEOC’s E-RACE Initiative (Eradicating Racism and Colorism from Employment), which is designed to develop "investigative and litigation strategies" with respect to employers' use of criminal background checks and credit checks.

The EEOC has long taken the position that an employer’s policy or practice of excluding individuals from employment because they have criminal conviction records is unlawful under Title VII unless the policy or practice is justified by a business necessity.

In fact, last year the EEOC brought suit against Freeman Companies, EEOC v. Freeman Cos., No. 09-CV-02573 D. Md., alleging that its use of credit histories and criminal background checks unlawfully discriminates against "a class of black, Hispanic and male job applicants."

Current Law

Currently, there is no federal law directly addressing employment discrimination against those with criminal backgrounds. Nevertheless, the EEOC believes that, in general, the use of criminal background checks for screening applicants has a disparate impact on African-American and Hispanic applicants.

Because criminal background checks often have a disparate impact on African-Americans and Hispanics, using the results of a check could violate Title VII if the employer can not demonstrate that the criminal background check is job-related and consistent with business necessity. According to the EEOC, an employer making an employment decision based on a criminal conviction must consider the following three factors to meet this burden: (1) the nature and gravity of the offense(s), (2) the time that has passed since the conviction and/or completion of the sentence, and (3) the nature of the job held or sought.

State Law

Minnesota has no law prohibiting employment decisions based on criminal background checks. However, the Minnesota Department of Human Rights cautions that “an employer’s hiring policy may be held to be discriminatory when, absent a bona fide occupational qualification, a minority-group member’s criminal conviction record is an absolute bar to employment.”

Unlike Minnesota, Wisconsin has a law addressing an employer's use of criminal background checks.  Specifically, Wis. Stat. § 111.335 prohibits an employer from refusing to hire an individual on the basis of an arrest or conviction record, unless the charge is “substantially job-related.”

Bottom Line

For most employers, especially those in the health care industry, criminal background checks are a routine part of the application procedure.  Nevertheless, employers should adhere to the following guidelines:

• Adverse-employment decisions should be based only on recent, job-related convictions.


• The criminal background check policy should be "individualized" and not contain bright-line conviction rules.  A wide variety of factors should be considered, including the nature of the offense, the nature of the job for which the applicant has applied, and the length of time that has passed since the conviction.

Given the EEOC's position, employers should also consider reviewing their policy with respect to criminal background checks to determine whether it has an adverse impact on African-Americans and Hispanics, and if so, how to address it.

Imagine you have a white Human Resources ("HR") professional who insists that a minority employee is persistently underperforming and should be placed on a performance improvement plan (“PIP”).  You are hesitant to place the employee on a PIP because she has a "racially based history" with the organization and you want to avoid a discrimination lawsuit.

The HR professional is impervious, insisting that you are discriminating against non-minority employees by not placing the minority employee on a PIP.  Eventually, it is the HR professional's performance that is failing, and you terminate her.

Did you just hit into the legal equivalent of a double play: (1) retaliation against the white HR professional for "opposing" the discrimination and (2) reverse discrimination by refusing to place the minority employee on the PIP. 

Apparently not.  According to the Minnesota Supreme Court in Bahr v. Capella University, --- N.W.2d ----, 2010 WL 3502788 (Minn. Sept. 9, 2010), you committed neither retaliation nor discrimination under the Minnesota Human Rights Act.  The reason is because the minority employee did not experience an "adverse employment action," an element necessary to the discrimination claim, which serves as a basis for the retaliation claim.

Courts define an adverse employment action as "a tangible change in duties or working conditions."  Negative performance evaluations, unfair reprimands, and written warnings, while putative disciplinary measures, without more, do not constitute adverse employment actions.   

Like a negative performance review, the Minnesota Supreme Court observed that placing an employee on a PIP does not make a tangible change to the employee's duties or working conditions.  As a result, the minority employee's discrimination claim would have failed (although it was not asserted in this case) and, as a result, the HR professional's retaliation claim based on this supposed discrimination fails as well.

Bottom Line

The lesson of Bahr is not for employers to do nothing in the face of an underperforming  employee.  Rather, the employer should be confident that it can take steps to improve an underperforming employee's performance, including negative performance reviews and PIPs, without risking exposure to a discrimination or retaliation lawsuit. This is true regardless of whether the underperforming employee is in any sort of protected classification.

… to intentionally refuse to do business with, to refuse to contract with, or to discriminate in the basic terms, conditions, or performance of the contract because of a person's race, national origin, color, sex, sexual orientation, or disability, unless the alleged refusal or discrimination is because of a legitimate business purpose.

Recently, the Minnesota Supreme Court heard the case of Krueger v. Zeman Const. Co., --- N.W.2d ---- (Minn. April 29, 2010) to decide who actually gets to enforce this law – is it just the business itself or may the employees of the business sue if they are damaged in some way?.  In that case, Pamela Kreuger was the owner and sole employee of Diamond Dust, a drywall and sheetrock business.  Diamond Dust subcontracted with Zeman Construction to supply materials and labor for a construction project. Krueger personally worked on the project and alleged that Zeman’s managers sexually harassed her and discriminated against her because of her gender. Krueger sued Zeman under the contract discrimination provision as both the owner of Diamond Dust and as an individual employee.

There was no question that Diamond Dust could sue since they were actually the party to the contract.  However, could Kruger sue as an individual since she was the actual victim of harassment? No, said a slim majority of the Minnesota Supreme. Only the actual parties to a business contract can sue for business discrimination in the performance of a contract.  Otherwise, every employee of a business harmed by discrimination in a contract could sue and collect damages for lost potential wages and other opportunities.  The Supreme Court concluded that the legislature did not intend to create this remedy for the employees of contractors.

This case closes off opportunities for non-employees to come in through the back door to sue Minnesota employers for employment discrimination. Fewer lawsuits is always a welcome development.