Minnesota often follows federal guidance when it comes to wage and hour law. But not always. In Hagen v. Steven Scott Management, 963 N.W.2d 164 (Minn 2021), the Minnesota Supreme Court held that a former on-site property caretaker, Hagen, could proceed to trial with her claims that she should have been paid for all time while “on-call.”
Hagen’s job duties required her to work an on-call shift once a week, every fifth weekend, and two holidays a year. While on call, she was required to carry a company-owned cellphone and stay within a 20-minute radius of the apartment complex. She was not paid for all of her time on call, only for hours actually worked responding to calls from tenants or performing maintenance.
Hagen sued for failure to pay all time worked under the Minnesota Fair Labor Standards Act (“MFLSA”). The district court dismissed the claim on summary judgment and the Minnesota Court of Appeals affirmed. The Minnesota Supreme Court reversed and remanded to district court.
Both lower courts noted that under well-established federal case law interpreting the federal Fair Labor Standards Act (“FLSA”) Hagen’s claim would fail. FLSA rules provide that only “where the conditions placed on the employee’s activities are so restrictive that the employee cannot use the time effectively for personal pursuits, such time spent on call is compensable.” 29 C.F.R. § 553.221(d). The Minnesota Court of Appeals noted that “even more restrictive on-call requirements” were not found compensable under federal law, citing several examples where employees were found to have been able to use time for “personal pursuits.”
The Minnesota Rule states, “[a]n employee who is required to remain on the employer’s premises or so close to the premises that the employee cannot use the time effectively for the employee’s own purpose is working while on call.” Minn. R. 5200.0120, subp. 2. The Minnesota statute states that, for on-site employees, “hours worked” include time when the employee is performing “any duties of employment.” Minn. Stat. § 177.23, subd. 10.
The Minnesota Supreme Court held that whether Hagen was performing “any duties,” such as carrying a company cell phone, was a fact issue that could not be resolved on summary judgment under Minnesota law. Although state and federal wage and hour laws are similar, they are not identical. The Minnesota Supreme Court declined to follow federal guidance and declined to affirm summary judgment under these facts, whereas federal courts might be more inclined to rule on summary judgment.
This court decision is important for Minnesota employers with on-site employees or “on-call” employees because reliance on federal precedent may not be sufficient. Other claims and suits are starting to arise following Hagen, including class action complaints under Minnesota law in state courts. Employers should carefully review their “on-call” policies to avoid potential claims or class actions. If you have questions about this issues above or any other HR & Employment topics, please reach out to Attorney John Ella or any of our other HR & Employment Law team members.
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