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HF 4184

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 03/28/2022 03:51pm

KEY: stricken = removed, old language.
underscored = added, new language.

Bill Text Versions

Engrossments
Introduction Posted on 03/10/2022
1st Engrossment Posted on 03/28/2022

Current Version - 1st Engrossment

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A bill for an act
relating to employment; prohibiting restrictive franchise agreements; amending
Minnesota Statutes 2020, section 177.27, subdivision 4; proposing coding for new
law in Minnesota Statutes, chapter 181.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2020, section 177.27, subdivision 4, is amended to read:


Subd. 4.

Compliance orders.

The commissioner may issue an order requiring an
employer to comply with sections 177.21 to 177.435, 181.02, 181.03, 181.031, 181.032,
181.101, 181.11, 181.13, 181.14, 181.145, 181.15, 181.172, paragraph (a) or (d), 181.275,
subdivision 2a
, 181.722, 181.79, deleted text beginanddeleted text end 181.939 to 181.943, deleted text beginordeleted text endnew text begin 181.991, andnew text end with any rule
promulgated under section 177.28. The commissioner shall issue an order requiring an
employer to comply with sections 177.41 to 177.435 if the violation is repeated. For purposes
of this subdivision only, a violation is repeated if at any time during the two years that
preceded the date of violation, the commissioner issued an order to the employer for violation
of sections 177.41 to 177.435 and the order is final or the commissioner and the employer
have entered into a settlement agreement that required the employer to pay back wages that
were required by sections 177.41 to 177.435. The department shall serve the order upon the
employer or the employer's authorized representative in person or by certified mail at the
employer's place of business. An employer who wishes to contest the order must file written
notice of objection to the order with the commissioner within 15 calendar days after being
served with the order. A contested case proceeding must then be held in accordance with
sections 14.57 to 14.69. If, within 15 calendar days after being served with the order, the
employer fails to file a written notice of objection with the commissioner, the order becomes
a final order of the commissioner.

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and
applies to franchise agreements entered into or amended on or after that date.
new text end

Sec. 2.

new text begin [181.991] RESTRICTIVE FRANCHISE AGREEMENTS PROHIBITED.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given them.
new text end

new text begin (b) "Employee" means an individual employed by an employer and includes independent
contractors.
new text end

new text begin (c) "Employer" has the meaning given in section 177.23, subdivision 6.
new text end

new text begin (d) "Franchise," "franchisee," and "franchisor" have the meanings given in section
80C.01, subdivisions 4 to 6.
new text end

new text begin Subd. 2. new text end

new text begin Prohibition on restrictive franchise agreements. new text end

new text begin (a) No franchisor may
restrict, restrain, or prohibit in any way a franchisee from soliciting or hiring an employee
of a franchisee of the same franchisor.
new text end

new text begin (b) No franchisor may restrict, restrain, or prohibit in any way a franchisee from soliciting
or hiring an employee of the franchisor.
new text end

new text begin Subd. 3. new text end

new text begin Franchise agreement amendment. new text end

new text begin Notwithstanding any law to the contrary,
no later than one year from the effective date of this section, franchisors shall amend existing
franchise agreements to remove any restrictive employment provision that violates
subdivision 2.
new text end

new text begin Subd. 4. new text end

new text begin Civil action; penalties. new text end

new text begin (a) An employee alleging a violation of this section
may bring a civil action for damages and injunctive relief against the employer.
new text end

new text begin (b) If the court finds that a franchisor has violated this section, the court shall enter
judgment, grant injunctive relief as deemed appropriate, and award the employee plaintiff
the greater of:
new text end

new text begin (1) the actual damages incurred by the plaintiff, plus any injunctive relief, costs, and
reasonable attorney fees; or
new text end

new text begin (2) a $5,000 penalty.
new text end

new text begin (c) If no civil action is commenced, the commissioner of labor and industry shall assess
a $5,000 per employee penalty for violations of this section. This assessment is in addition
to the commissioner's authority under section 177.27, subdivisions 4 and 7. Any penalty
assessed under this subdivision shall be awarded to the employee plaintiff and not to the
commissioner or the department.
new text end

new text begin Subd. 5. new text end

new text begin Severability. new text end

new text begin If any provision of this section is found to be unconstitutional
and void, the remaining provisions of this section are valid.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment and
applies to franchise agreements entered into or amended on or after that date.
new text end