United States: Minnesota Supreme Court Kills Employment At Will

Last Updated: October 31 2017
Article by Bruce J. Douglas

On October 11, 2017, the Minnesota Supreme Court issued a decision in Burt v. Rackner, Inc., No. A15-2045 (October 11, 2017), that may have effectively abrogated the long-standing rule of "employment at will" in Minnesota. By creating a claim for retaliation under the Minnesota Fair Labor Standards Act (MFLSA)—a statute which does not contain an express retaliation provision—a 5-2 majority of the court held that other provisions of the MFLSA could be read to permit a restaurant employee who refused to share tips in apparent violation of the law (and who was later discharged) to sue for wrongful discharge under the statute. The court's majority articulated a new and expansive principle for finding legislative intent to allow a claim based on a statute.


Todd Burt was a bartender at Bunny's Bar & Grill, where the employer had directed that tips be shared with bussers. The employer told him that "there would be consequences if that did not happen." Burt refused and was discharged because, his employers informed him, he "was not properly sharing his tips with other staff." The MFLSA prohibits mandatory tip-pooling or tip-sharing arrangements, although employees may voluntarily and without the involvement of their employers agree to share tips amongst themselves.

After he was discharged, Burt sued claiming that the employer had wrongfully terminated his employment in violation of the MFLSA. He had not shared any tips, so he had not lost any pay. Burt sought damages, however, for the income he lost due to his becoming unemployed when his employer wrongfully terminated his employment. The state district court granted the employer's motion for judgment on the pleadings, ruling that the MFLSA "does not contemplate an action for wrongful discharge." The district court reasoned that "if the Legislature had intended for employees [to] be able to sue for wrongful discharge, it would have included that language explicitly in the MFLSA, as it has done in numerous other statutes." Burt appealed the district court's decision.

Minnesota Court of Appeals Decision

A three-judge panel of the Minnesota Court of Appeals reversed. In an opinion authored by Judge Rodenberg, the Court of Appeals held that Burt had stated a viable claim upon which relief could be granted. Based on a reading of the MFLSA's "employer liability" provision, section 177.27, subdivision 7, the court focused on the statute's inclusion of the term "back pay," which the court called "an item of damages that typically flows from a wrongful termination." The Court of Appeals held that where "an employee claims to have been discharged in violation of the MFLSA, resulting in lost wages by reason of the employee's resulting unemployment, the remedies available for violation of the MFLSA include the ordinary wrongful-discharge money damages."

The Minnesota Supreme Court's Decision

Affirming the Court of Appeals, the Minnesota Supreme Court went further: It held that while the MFLSA does not contain an express provision for a "wrongful discharge" claim, its language nevertheless could be read to expressly provide for such a claim. To better understand the court's analysis, here are the relevant portions of sections of the MFLSA upon which the opinion relied:

Section 177.24, Subdivision 3. Sharing of gratuities

For purposes of this chapter, any gratuity received by an employee or deposited in or about a place of business for personal services rendered by an employee is the sole property of the employee. No employer may require an employee to contribute or share a gratuity received by the employee with the employer or other employees or to contribute any or all of the gratuity to a fund or pool operated for the benefit of the employer or employees. This section does not prevent an employee from voluntarily sharing gratuities with other employees.

Other sections of the MFLSA authorize the Commissioner of the Minnesota Department of Labor and Industry to commence an administrative proceeding to recover unpaid wages, liquidated damages, and certain costs of the proceeding, and authorize private parties to commence court actions seeking the same types of relief. One such section of the statute, Minn. Stat. section 177.27, subdivision 8, provides, "In addition, in an action under this subdivision the employee may seek damages and other appropriate relief provided by [another section] and otherwise provided by law."

Based on its reading of these provisions of the MFLSA, the Minnesota Supreme Court majority concluded that the legislature had intended to provide for a claim of wrongful discharge for an employee's refusal to work in violation of the statute and that the employee could seek a wide range of damages. Agreeing with Burt's position, and affirming the Court of Appeals, the majority held that "the language of the MFLSA expressly provides a cause of action for an employee who is terminated for failing to share tips."

The majority rejected the major argument put forward by Rackner, namely, that while the MFLSA prohibits an employer from requiring employees to share tips, it does not provide a remedy for an employee who was fired for refusing to do so. Notably, the Minnesota Supreme Court had already found a common law cause of action for wrongful discharge for refusing to perform an unlawful act in Phipps v. Clark Oil & Refining Corp., 408 N.W.2d 569 (Minn. 1987). Moreover, in 1987, the Minnesota Legislature enacted a whistleblower statute, Minn. Stat. section 181.932. The court found it unnecessary to rely on either of these possible alternatives.

Instead, the majority found that the MFLSA "expressly" provided for a cause of action that is nowhere mentioned in the text of the statute. The Minnesota Supreme Court acknowledged that its long-standing canons of statutory construction require that courts begin their analyses with the words of statutes. The Minnesota Supreme Court also recognized that employment at will is, and remains, the general rule in Minnesota, but that the legislature "can regulate and modify the common-law at-will doctrine and create statutory exceptions," which it has done previously. The court has found legislative intent to create exceptions to employment at will where a statute does so by either "express wording or necessary implication."

Responding to a critique in a dissenting opinion authored by Chief Justice Gildea, the majority boldly asserted that it was not relying on "necessary implication" to reach its decision. Instead, it held that the MFLSA "expressly provided" such a cause of action in section 177.27, subdivision 8:

"The MFLSA contains no language prohibiting an employee from suing an employer for wrongful discharge resulting from the employee's refusal to share tips," the majority wrote. "To the contrary, Minn. Stat. § 177.27, subd. 8, unambiguously allows an aggrieved employee to sue for any violation of the statute, which creates a broad, private right of action in favor of employees harmed by an employer's violation of the MFLSA." (Emphasis in the original.)

The majority found support for its conclusion in other Minnesota statutes, such as the polygraph statute, Minn. Stat. § 181.75, which it held provided a cause of action for wrongful discharge despite a similar absence of express language in the statute. It also found support in another provision of the MFLSA that prohibits displacing full-wage employees with new employees who can be hired for a brief period of time at a lower "training wage." Taking these disparate threads of the law and weaving them into a new quilt, the court concluded:

"Accordingly, we hold that the MFLSA, by express wording, provides a cause of action for an employee who is terminated for refusing to share tips, because Minn. Stat. § 177.27, subd. 8, offers an aggrieved employee a broad, private cause of action for any violation of the MFLSA and allows the employee to recover any damages or appropriate relief provided by law, including back pay." (Emphasis in the original.)

A Powerful Dissent

In a dissenting opinion, Chief Justice Gildea, joined by Justice Anderson, wrote that the majority had violated a basic principle of the separation of powers: Legislatures make policy, and courts interpret and apply the law. The legislature, the dissenters wrote, knows how to draft legislation that modifies or abrogates the employment-at-will doctrine—and it had not done so in drafting the MFLSA. In a pointed rejoinder to the majority opinion, the dissenting opinion stated:

"Unconstrained by the plain language of the statutes or by our precedent, the majority supports its desired outcome by concluding that because the MFLSA 'contains no language prohibiting an employee from suing an employer for wrongful discharge resulting from the employee's refusal to share tips,' the statute must permit an employee to sue. This conclusion—looking at whether there is specific language that expresses the Legislature's intention to retain the common law rather an intention to abrogate the common law—represents a drastic shift in 'express-wording' analysis." (Emphasis in the original.)

Implications for Minnesota Employers

The Minnesota Supreme Court's decision goes far along the path to an ultimate undermining and eventual elimination of Minnesota's general rule of employment at will. Employees may find in the MFLSA or other statutes arguable points of law upon which to ground a dispute and refuse to continue to work because an employer is arguably violating the law. Employers may need to choose between discharging an employee who makes such a claim or acceding to the employee's interpretation of the law. This is not far-fetched, and, indeed, Chief Justice Gildea alluded to this possibility:

"Even more alarmingly," Justice Gildea wrote, "the majority's rationale will result in the judicial creation of a cause of action for wrongful discharge for the violation of any MFLSA provision that imposes a requirement on an employer—and indeed, virtually any statutory provision that imposes a requirement on an employer—without the requisite showing of express wording or necessary implication to abrogate Minnesota's employment-at-will rule. In sum, the majority makes a drastic change to the common-law employment-at-will rule in Minnesota that undermines our precedent and exceeds our authority." (Footnote omitted.)

Employers in Minnesota should be prepared for a wide variety of disputes with employees asserting claims rooted in their own readings of statutes that pertain to the workplace, even in a tangential way, that can be used as bases to challenge employers' decisions. In addition, discharging an employee in Minnesota has now become a riskier proposition requiring a more searching analysis of the surrounding circumstances of a proposed discharge. Providing a reliable record will be critical to showing that a discharge is unrelated to a dispute over a particular provision of a statute that even arguably affords protections limiting an employer's employment-at-will right to discharge an employee for "a good reason, a bad reason, or for no reason at all."

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions