b'Cannabis Legalization Creates New Alerts Challenges for Minnesota Employers4 Noncompete Agreements Banned in Minnesota: Action Items for Employers Craig A. Brandt612-877-5360|JCraig.Brandt@lawmoss.com passage of Minnesotas Drug and Alcohol Testing in the Workplace Minnesota legislators made sweeping changes to Minnesota law regarding the enforceability of employee covenantsLawMoss.com/people-craig-a-brandt Act (DATWA) in 1987. DATWA has detailed requirements for not to compete with the passage of Minnesota Session Laws 2023Chapter 53 that Governor Walz signed into law ontesting and is considered employee friendly.May 24, 2023. An employee covenant not to compete is broadly defined to include any agreement that restricts a MinnesotaCraig is a Minnesota State Bar Association Certified Specialist in employee from working in a specified geographic area or for a similar employer after termination of employment. Labor and Employment Law and is a member of Moss & BarnettsUnder DATWA, an employee has always had protection after Employment Law team. He advises businesses and individuals on employment and labor law matters. an initial positive drug test; the positive test could not be used This new law will make the following three major changes to Minnesota law that impact employers: as a basis for discharge unless the employee also subsequently 1.The law will prohibit post-employment employee covenants not to compete in any agreement entered into on orMinnesota employers face additional workforce challengestested positive a second time, refused the employers offer after July 1, 2023, other than in connection with the sale or shut-down of a business. This represents a major shiftwith the legalization of recreational cannabis for adults onto participate (at the individuals expense) in a drug or alcohol in Minnesota public policy, which had previously permitted the enforcement of an employee noncompete agreementAugust 1, 2023. Like employers in the 23 other states that havecounseling or rehabilitation program, or failed to successfully provided the agreement reasonably protected a legitimate interest of the employer. Consistent with existingnow legalized recreational cannabis, Minnesota employers willcomplete a counseling or rehabilitation program once started. Minnesota law, the new law clarifies that employers are not prohibited from entering into agreements with employeesneed to reevaluate their employment practices, polices, andThese employee protections continue to remain in place and have that include provisions that prohibit the employee from soliciting the employers customers or employees.procedures based on Minnesotas law change.always extended to cannabis.2.The prohibition against covenants not to compete also extends to non-employee independent contractors. EmployersUse of Cannabis Products The 2023 cannabis legislation amended DATWA\'s definition of who have employees or independent contractors who live or work in Minnesota should update both their employmentFor more than 30 years, it has been unlawful for Minnesotadrug to remove cannabis and made related changes, including agreement and independent contractor forms for use on and after July 1, 2023. The new law indicates that otheremployers to refuse to hire a job applicant or to discipline orto describe cannabis testing and when it is allowed, and to language in such an agreement that is not inconsistent with the new law may still be enforced.discharge an employee because of the individuals off-duty usespecify the circumstances under which an employer may take of lawful products. The 2023 cannabis legislation expresslydisciplinary action based on cannabis test results.3.Employers can no longer require Minnesota employees to litigate outside of Minnesota or apply the law of another state. Previously, "choice-of-law" and "choice-of-forum" provisions could have forced an employee to litigate inamended Minnesotas Lawful Consumable Products statute toEmployers with Minnesota employees that decide to pursue another state using the laws of another state. Any such contract provision put in place on or after July 1, 2023, isadd cannabis and related products to the definition of lawfultesting under the new law are now subject to what is effectively unenforceable against employees who primarily reside and work in Minnesota.consumable products. Accordingly, cannabis users are nowa two-tier system for drug and cannabis testing. Employers are afforded these same protections.now prohibited from using tests to screen most job applicants for July 1, 2023, is the effective date of the new law that will apply to "agreements entered into on or after that date."Cannabis use, however, is only protected if it occurs: cannabis (similar to the prohibition to test for pre-employment An open question for the future may be how willing Minnesota courts will be to enforce pre-July 1, 2023, employeealcohol use) and from randomly testing most employees for noncompete provisions after that date. 1) during non-work hours; andcannabis, other than for employees in safety-sensitive and certain Action Items for Minnesota Employers: 2) off the employer\'s premises.other listed positions, including but not limited to teachers Employers continue to retain the discretion to discipline orof children, health care employees involved in patient care, Minnesota employers may want to consider the following action items to prepare for the new law: truck drivers, and other employees subject to federal drug discharge employees who: testing standards.1.Remove post-employment noncompetition provisions from new employment agreements and new independent1) use, possess, transfer, or sell cannabis or related products while contractor agreements. Update non-solicitation, confidentiality, and non-interference clauses to limit any gaps thaton the job, on work premises, or while operating a companyAll employees are, however, subject to testing for cannabis if the may be left by the removal of the post-employment noncompetition provisions.vehicle or equipment; oremployer has reasonable suspicion that an employee:2.Reevaluate deferred compensation programs, including changes to language that may be required to programs and forms.2) report to work while impaired by cannabis. 1) is impaired on the job; 3.Revise forum selection clauses and "choice of law clauses" in contracts with employees that are inconsistent with theNow, the actual policing of cannabis impairment on the job may2) has sustained an injury or been involved in an accident; ornew law. Note that the drafting may require savings clause language because of multi-state conflicts of laws.be more difficult. Notably, edible forms are more difficult to detect3) has violated the employers work rules relating to drugs 4.Confirm with employment managers that the employer intends to continue to enforce post-employment noncompetitionthan alcohol or marijuana smoking and can have much longeror cannabis, provided such rules are in writing and have been agreements entered into prior to July 1, 2023. It could be important that managers avoid inadvertent waiver. release times. provided to the employee.Employee Drug TestingImplementing and using employer drug testing programs has 8 If you would like assistance assuring best practices in these areas, please contact your attorney at Moss & Barnett. continued to be challenging for Minnesota employers since the"Cannabis Legalization" Continued on Page 11 9#'