TEKsystems Challenges Minnesota Affirmative Action Overreach

Workforce Certificate requirements at issue

In an unusual case, staffing giant TEKsystems is challenging how Minnesota grants Workforce Certificates. Companies with more than 40 employees in the state, or that are headquartered in the state, must obtain a Workforce Certificate to do business with the state, cities, counties, townships, and a host of agencies and divisions, such as airports and universities. The Workforce Certificate process is administered by the Minnesota Department of Human Rights ("DHR"). The DHR's website describes the purpose as follows: "Workforce Certificates require contractors to actively work to hire, train, promote, and retain people of color, Indigenous people, women, and/or people with disabilities to ensure that Minnesota’s workforce reflects Minnesota’s demographics."

Applicants for Workforce Certificates must produce an affirmative action plan "for people of color, women and individuals with disabilities," accompanied by a "workforce and utilization analysis" comparing their workforce with area demographics - the goal being the get them to match.

The issue here is that the DHR is requiring TEKsystems to include in the analysis the workforce in its Hanover, Maryland corporate office, rather than just its Minnesota workforce. This would seem to be an attempt to regulate out-of-state employment practices in a manner inconsistent with DHR's stated purpose of ensuring "that Minnesota’s workforce reflects Minnesota’s demographics." TEKsystems declined to include the home office statistics and was denied a Workforce Certificate. A hearing followed before a DHR administrative hearing officer, who granted summary judgement for the Department.

On October 17, 2024, TEKsystems filed an appeal (attached below) with the State of Minnesota Court of Appeals, stating:

MDHR improperly denied TEKsystems’ Workforce Certificate when TEKsystems would not provide MDHR with unfettered access to information about the regulation of TEKsystems employees who work out of its Hanover, Maryland location. It is undisputed that these employees do not work in Minnesota, reside in Minnesota, nor are they involved in contracts with Minnesota public entities.

The appeal argues that the ruling is inconsistent with the statutory definition of "employee" in the Minnesota Human Rights Act and violates the U.S Constitution by attempting to regulate out-of-state employment practices. It will likely take as long as a year before the Court of Appeals rules and Staffing Legal News will be there to report on the outcome.