Most staffing companies and temp agencies in Minnesota and around the country require customers to pay a penalty or fee if they hire the placed employee directly. This is a standard practice in the industry and a provision to the effect should be included in staffing company contracts with their customers. Supplemental nursing services agencies in Minnesota, however, are statutorily prohibited from imposing restrictions of this kind.
Minn. Stat. 144A.72, subd. 1 states, in part, as follows: “(3) the supplemental nursing services agency must not restrict in any manner the employment opportunities of its employees” and “(8) the supplemental nursing services agency must not, in any contract with any employee or health care facility, require the payment of liquidated damages, employment fees, or other compensation should the employee be hired as a permanent employee of a health care facility.” These restrictions on restrictions, presumably the result of targeted lobbying by industry groups, are extremely broad. Creative contract drafting is therefore necessary to avoid poaching of employees in this segment of the health care staffing industry.
“Supplemental nursing services agency” is defined by Minnesota statutes as “a person, firm, corporation, partnership, or association engaged for hire in the business of providing or procuring temporary employment in health care facilities for nurses, nursing assistants, nurse aides, and orderlies. Supplemental nursing services agency does not include an individual who only engages in providing the individual’s services on a temporary basis to health care facilities.” The term supplemental nursing services agency does not include a professional home care agency licensed under section 144A.471 that only provides staff to other home care providers.
Beware the restrictions on restrictions in section 144A.72!
Trepanier MacGillis Battina P.A. is a Minnesota business law firm that regularly represents staffing and recruiting companies with contract drafting, contract disputes and employment law compliance. Their business law attorneys can be reached at 612.455.0500.