Brace Yourselves, Employers, More Government is Coming!

Government at all levels has continued to grow relentlessly and will do so with a vengeance considering our federal and Minnesota election outcomes. Employers in particular consistently face the challenge of politicized government agencies issuing ideologically-driven decisions and regulations, often at the behest of labor unions and environmentalists, overreaching their authority and harming businesses and the jobs dependent on them. While employers generally recognize the need to fight back against such illegitimate government actions, many do not have the resources needed to defend themselves, and therefore are often compelled to capitulate to the demands of bureaucrats.

Small employers faced with unfounded or unjust agency actions should be aware that both Minnesota state law, and federal law, may not only provide legal remedies in case of bureaucratic overreach, but in some circumstances also allow the recovery of some or all of a business’s legal expenses in taking legal action to protect its rights.

The Federal Equal Access to Justice Act (EAJA) provides that certain businesses and individuals may recover attorney fees and expenses if they prevail in civil litigation with the United States government, including its bureaucratic agencies. To be eligible, those businesses must have a net worth of less than $7 million, and not more than 500 employees. Individuals must have a net worth of $2 million or less. If qualified, the business or individual can recover their legal fees and expenses if the court finds that the government’s position in the litigation was “not substantially justified.”

Minnesota’s own Equal Access to Justice Act (MEAJA) is similar, but applies when an individual or business prevails in a civil legal action (or contested case proceeding) with the state or a state agency. Unlike the federal statute, to be eligible to recover legal fees and expenses under MEAJA, a business must have less than $7 million in annual revenues, as opposed to net worth. MEAJA also requires that the government’s position in the case be found “not substantially justified.”

Employers facing government agency actions, including those by the State or Federal Department of Labor, the Occupational Safety & Health Administration (OSHA), the Equal Employment Opportunity Commission (EEOC), the Office of Federal Contract Compliance Programs (OFCCP), the National Labor Relations Board (NLRB), the Minnesota Department of Human Rights, the Environmental Protection Agency (EPA), or other state and federal agencies, which they believe are not justified, should remember that these statutes can help compensate for the cost of defending themselves. Two key takeaways for employers are to: (1) take preventive steps now, such as implementing lawful and defensible hiring, payroll, disciplinary, regulatory and employment policies; and (2) do not wait when facing notice of impending government action, but act quickly to assess potential liability and defenses, and move to either settle or defend yourself. We can help with advice born of experience in both areas.

Call the authors, or any Peters, Revnew, Kappenman & Anderson, P.A. attorney, at (952) 896-1700 whenever you receive notice of a regulatory charge, claim, audit, citation or other proposed adverse government action. We will give you a brief initial assessment of the steps you can take to assess your liability risk and your prospects of defending yourself, and also of the possibility of an EAJA or MEAJA recovery of your fees and costs if you do so successfully.