I. Hiring

A. At-Will v. Just Cause

South Dakota remains an at-will employment state. SDCL §60-4-4. This means, absent a contract to the contrary, and unless the employee can successfully assert a common law or statutory claim, the employer is free to terminate an employee's employment on whatever basis it deems appropriate, without legal recourse.

An employer and employee may enter into a contract that changes the at-will status. Larson v. Kreiser's, Inc., 427 NW2d 833, (SD 1988). Furthermore, various common law exceptions to the employment at-will doctrine have arisen in South Dakota. Under certain circumstances, an employer may be deemed to have agreed to terminate employment only in the event of "just cause" by operation of the provisions of an employee handbook. Osterkamp v. Alkota Mfg., Inc., 332 N.W.2d 275 (1983).

1. Common Law Claims

An employee cannot be discharged for the following conduct:

• Refusing to commit a criminal act - Johnson v. Kreisers Inc., 433 N.W.2d 225 (S.D. 1988).
• Filing of a workers' compensation claim - Nissent v. Homestake Mining Co., 505 N.W.2d 781 (S.D. 1993) (see also SDCL §62-1-16).
• Whistleblowing - Dahl v. Combined Life Ins. Co., 2001 S.D. 12, 621 N.W.2d 163.

2. Statutory Claims

Also, consistent with federal labor laws, state law prohibits an employer from discharging an employee because of an individual's race, color, creed, religion, sex, ancestry, disability, or national origin. SDCL §20-13-10. Please note that age is not a protected category under state law.

B. Discrimination

The South Dakota legislature has created the Division of Human Rights to investigate the existence, causes, and extent of discrimination by employers and labor unions, as well as other societal institutions. SDCL §20-13-7. The Division's main purpose is to eliminate discrimination through education and conciliation. Id. The Division has a work-sharing agreement with the EEOC. According to SDCL Chapter 20-13, it is an unfair or discriminatory practice for an employer, because of race, color, creed, religion sex, ancestry, disability or national origin to fail or refuse to hire, to discharge an employee, or to accord adverse or unequal treatment to any employee with regard to application, hiring, training, promotion, compensation, layoff, or any term of employment. SDCL §20-13-10. Please note age is not a protected category under state law. Chapter 20-13 prohibits similar types of discrimination by labor unions. See Section XI, Labor Unions, below. Employment agencies also fall within the scope of Chapter 20-13. It is an unfair or discriminatory practice for any employment agency, because of race, color, creed, religion, sex, ancestry, disability or national origin, to accord adverse or unequal treatment to any person in connection with an application for employment, referral or request for assistance in procuring employment. SDCL §20-13-11.

In addition, SDCL §20-13-26 makes it unlawful to retaliate against a person for filing a charge of discrimination.

The Division of Human Rights has the authority to receive, investigate and pass upon charges of employment discrimination based on the protected classes enumerated above. SDCL §20-13-28. A charge of discrimination must be filed with the Division of Human Rights within 180 days after the alleged discriminatory or unfair practice occurred. SDCL §20-13-31. A verified written charge shall state the name and address of the entity or person alleged to have committed the discriminatory acts, as well as the facts upon which the charge is based. SDCL §20-13-29. An employer against whom a charge of discrimination has been filed will be given the opportunity to respond to the charge during the course of the investigation.

After the investigation, the Division must make a finding as to whether there is "probable cause" to believe that discrimination occurred. For purposes of Chapter 20-13, probable cause is defined as a determination that "it is more probable than not" that the charging party was discriminated against. SDCL §20-13-1.1. The probable cause determination is based on evidence that establishes a prima facie case of discrimination; evidence of viable employer defenses; and any evidence of pretext. Id. If the Division issues a finding of no probable cause, the matter is dismissed. The employee may appeal this finding to the circuit court under the state's administrative procedures act. SDCL §20-13-28.1. A state law claim cannot be pursued absent a finding of probable cause by the Division.

If a probable cause finding is issued, the Department will engage in conciliatory negotiations with the parties. However, if the investigating official is satisfied that efforts at conciliation have become futile, the Division will order the responding employer to answer and a hearing will be set before the Commission on Human Rights. SDCL §20-13-35. No later than 20 days after the issuance of such a notice, the charging party or respondent may elect to have the charges decided in a civil action before the circuit court, rather than by the Commission. SDCL §20-13-35.1.

The relief available under state law claims is different depending upon whether the matter is heard by the Commission or in civil court. If a case is not removed to circuit court and is instead heard by the Commission of Human Rights, under SDCL §20-13-42 the Commission has the authority to award back pay, front pay, order reinstatement, require the employer to cease and desist from discriminatory practices, and award court costs. In employment discrimination cases, the Commission cannot award attorney fees, money for emotional distress or punitive damages.

If the state law claim is removed to civil court, under SDCL §20-13-35.1 the jury and/or judge can award back pay, front pay, emotional distress damages, order reinstatement, require the employer to cease and desist from discriminatory practices, award court costs (not attorney fees), and can also award punitive damages on retaliation claims and failure to accommodate a disability claims. Attorney fees are not available. SDCL §20-13-35.1. If either party so elects, the action must be filed within one year of the notice of such election. Id. There is no cap on compensatory/punitive damages as can be found under some federal laws.

C. Employment Applications

Currently, there are no laws specific to applications other than the employment laws prohibiting discrimination discussed above.

D. Use of Employment Contracts

An employer and employee may enter into a contract that changes the at-will status of employment. Larson v. Kreiser's, Inc., 427 N.W.2d 833 (S.D. 1988). An employment contract cannot be enforced against an employee beyond a term of two years. SDCL §60-2-6.

E. Advertising/Recruitment

An employer may not advertise in a manner indicating that individuals of any particular race, color, creed, religion, sex, ancestry, disability, or national origin are unwelcome or not solicited for employment. SDCL §20-13-13. The same is true for persons advertising public accommodations or services. SDCL §20-13-23.

Further, South Dakota recognizes a common law claim of tortious interference with a business relationship, including recruiting an employee of another company bound by a non‑compete agreement. St. Onge Livestock Co., Ltd. v. Curtis, 2002 S.D. 102, 650 N.W.2d 537 (S.D. 2002).

F. Employment References/Background Investigations

Currently, there are no specific state statutes concerning background investigations. An employer that gives a written reference concerning a current or former employee to a prospective employer is presumed to be acting in good faith and may not be held liable for the disclosure or its consequences, unless a lack of good faith is shown by clear and convincing evidence. This presumption of good faith is rebutted on a showing that the employer recklessly, knowingly, or with a malicious purpose, disclosed false or deliberately misleading information, or disclosed information that is confidential under any federal or state law. SDCL §60-4-12.

II. Compensation and Benefits

It is the duty of the SD Department of Labor to ensure compliance with the conditions set forth in SDCL Chapter 60-11 regarding wages, hours, and conditions of employment, and to investigate any violations of that chapter. SDCL §60-11-17. The Department may hold hearings to ascertain the merits of any claim and shall co-operate with any employee in the prosecution of a claim against his or her employer. Id.

A. Minimum Wage

Chapter 60-11 sets the minimum wage for the State. At the time of this publication, the minimum wage for the state of South Dakota is $5.15 per hour. SDCL §60-11-3. A different minimum wage rate might apply to employees under 20 years of age who qualify for an opportunity wage under the Fair Labor Standards Act or to babysitters or outside sales persons. Id. Additional exceptions to the minimum wage requirement are located at SDCL §60-11-5. Finally, the specific concerns involved with employing tipped employees are located at SDCL §60-11-3.1. Any agreement to work for less than the minimum wage is ineffective. SDCL §60-11-4.

B. Minimum Age

Chapter 60-12 places specific restrictions on the employment of children. For instance, an unemancipated child under the age of 16 may not be employed for more than four hours in a single school day, 20 hours in a single school week, or after 10:00 p.m. in any day that precedes a school day. On any non-school day, an unemancipated child under the age of 16 may not work more than eight hours in a single non-school day and not more than 40 hours in a non-school week. SDCL §60-12-1. No child under the age of 14 shall be employed at any time in a factory, workshop or mine, nor be employed in any mercantile establishment except during the hours when school is not in session, and in no case after 7:00 p.m. SDCL §60-12-2.

C. Wage Payments

Unless some other time period is provided by law, employees must be paid all cash wages that are due at least once each calendar month. SDCL §60-11-9. In an action for the breach of an obligation to pay wages, where a private employer has been oppressive, fraudulent, or malicious in its refusal to pay wages due, an award of double the amount of wages due may be available. SDCL §60-11-7.

When an employee is terminated or resigns, an employer must pay any unpaid wages or compensation not later than the next regularly stated payday for which those hours would have normally been paid, or as soon thereafter as the employee returns all of the employer's property that is in the employee's possession. SDCL §§60-11-10 and 60-11-11. Under certain circumstances, the refusal to pay wages may be a Class 2 Misdemeanor. SDCL §60-11-15.

Employers may not discharge, discriminate against, or threaten reprisal against an employee because of his or her complaint about the employer's failure to comply with the provisions of Chapter 60-11. SDCL § 60-11-17.1.

1. Equal Pay

No employer shall discriminate between employees on the basis of sex by paying wages to one employee at a rate less than the rate at which it pays members of the opposite sex for comparable work on jobs that have comparable requirements. SDCL §60-12-15. However, wage differentials that are paid pursuant to an established seniority system, job description system, merit system, or executive training system do not constitute discrimination on the basis of sex and are not prohibited by the foregoing section. SDCL §60-12-16. State law specifically authorizes a civil action for violation of SDCL §60-12-15, and allows a court to grant the plaintiff reasonable attorney's fees for pursuing such an action. SDCL §60-12-18. An action under SDCL §60-12-15 may be commenced not later than two years after the cause of action occurs. SDCL §60-12-19. Chapter 60-12 includes a prohibition on employer retaliation for complaints based on sex-based wage discrimination. SDCL §60-12-21.

D. Child Labor

The South Dakota Legislature has directed the SD Department of Labor to enforce all child labor laws. All directors, inspectors, agents, and employees of the Department must assist in the enforcement of those laws and investigate potential violations. SDCL §§60-12-11 and 60-12-12. The Department is to file a criminal complaint against any violator of the Child Labor Laws. SDCL §60-12-12.

As discussed above, Chapter 60-12 places specific restrictions on the employment of children. For instance, an unemancipated child under the age of 16 years may not be employed for more than four hours in a single school day, 20 hours in a single school week, or after 10:00 p.m. in any day that precedes a school day. On any non-school day, an unemancipated child under the age of 16 years may not work more than eight hours in a single non-school day and not more than 40 hours in a non-school week. SDCL §60-12-1. No child under the age of 14 years shall be employed at any time in a factory, workshop or mine, nor be employed in any mercantile establishment except during the hours when school is not in session, and in no case after 7:00 p.m. SDCL §60-12-2.

In any factory, mill, or workshop where children are employed, an employer must ensure proper ventilation, maintain separate rest rooms for male and females, and maintain separate dressing rooms if a change of clothing is necessary. There are also cleanliness requirements that govern these types of facilities if children are employed therein. SDCL §60-12-8.

Children under the age of 16 years may not be employed in any occupation dangerous to life, health or morals. SDCL §60-12-3. An employer that violates any of these restrictions on child labor is subject to prosecution for a Class 2 misdemeanor.

Nevertheless, the prohibition on employment in dangerous occupations does not apply to minors employed by their parents, or to minors who have successfully completed a safety course and received a license, permit, or certificate from a state or federal agency to operate agricultural equipment or otherwise to be employed in an agricultural occupation within the scope of the license, permit, or certificate. SDCL §60-12-3. It is also permissible to employ a child over the age of 14 years to dispense gasoline, diesel fuel, and oil at a gasoline service establishment. Id.

E. Health Insurance

South Dakota employers are not required to provide health insurance to their employees.

F. Overtime Issues

Currently, there are no specific state statutes governing overtime issues.

G. Workday/Workweek/Work hours

Other than child labor laws discussed above, there currently are no specific state statutes regarding workdays, workweeks, and work hours.

III. Time Off/Leaves of Absence

A. Paid Vacation

Currently, there are no specific state statutes regarding vacation. In most circumstances, accrued but unused vacation must be paid to the employee unless specified otherwise in a handbook or employee contract.

B. Paid Sick Leave

There are no specific state statutes concerning sick leave.

C. Paid Time Off

There are no specific state statutes regarding paid time off.

D. Family and Other Medical Leave

There are no specific state statutes regarding family or medical leave.

E. Disability Leave

There are no specific state statutes regarding disability leave.

F. Pregnancy Leave/Paternal Leave

Other than anti-discrimination laws discussed above, there are no specific state statutes regarding pregnancy leave.

G. Workers' Compensation

See Section VII on Workers' Compensation.

IV. Termination Issues

A. Wrongful Termination Claims

See At-Will v. Just Cause in Section I.A above.

B. Discrimination and Harassment Claims

See Discrimination/Harassment in Section I.B above.

C. Severance Pay

There are no specific state statutes requiring severance pay.

D. Harassment

See Discrimination/Harassment in Section I.B above.

V. Layoffs/Work Force Reductions/Redundancies

A. Advance Notice

There are no specific state statutes in this regard.

B. Severance Pay

There are no specific state statutes requiring severance pay.

C. Use of Separation Agreements

There are no specific state statutes regarding separation agreements.

VI. Unfair Competition/Covenants Not to Compete

A. Trade Secrets

South Dakota has adopted a form of the Uniform Trade Secrets Act. SDCL 37-29-9.

B. Covenants Not to Compete

The general rule is that every contract restraining exercise of a lawful profession, trade, or business is void unless specifically exempted. An employee may agree with an employer at the time of employment, or at any time during his or her employment, not to engage directly or indirectly in the same business or profession as that of the employer for any period not exceeding two years from the date of termination of the agreement, and not to solicit existing customers of the employer within a specified county, city, or other area for any period not exceeding two years from the date of termination of the agreement if the employer continues to carry on a like business therein. SDCL §53-9-11. If a non-competition clause meets with the statutory requirements, there is no need for the Court to find the non-competition clause to be reasonable before it can be enforced. American Rim & Brake, Inc., v. Zoellner, 382 N.W.2d 421 (S.D. 1986). However, if the employee is fired for no cause of his or her own, the court will apply a balancing test to determine the reasonableness of a non-competition clause. Central Monitoring Serv. v. Zakinski, 1996 S.D. 116, 553 N.W.2d 513.

C. Non-Solicitation of Employees and Customers

South Dakota recognizes a common law claim of tortious interference with a business relationship, including recruiting an employee of another company bound by a non-competition agreement. St. Onge Livestock Co., Ltd. v. Curtis, 2002 S.D. 102, 650 N.W.2d 537.

VII. Employee Injuries/Workers' Compensation

Workers' compensation claims are governed by the law in effect at the time of the work-related injury. Since it is impossible to include all appropriate considerations for an employer or insurer, local counsel should be consulted in addressing any workers' compensation issue.

A. General Provisions and Definitions

The Department of Labor is charged with the duty to promulgate rules and regulations governing the procedures in workers' compensation hearings. SDCL §62-2-5. The Department also has the power to subpoena witnesses, administer oaths, and examine the books and records of the parties to a proceeding. SDCL §60-2-6.

The term, "employer," includes the state, any municipal corporation within the state, any political subdivision of the state, as well as any individual firm, association or corporation, or legal representative of a deceased employer. SDCL §60-1-2.

The term, "employee," includes every person, including a minor, in the services of another, except: (1) one whose employment is not in the usual course of the trade, business or occupation, or profession of the employer; or (2) any official of the state or any subdivision of government elected or appointed for a regular term of office, or to complete the unexpired portion of any such term, provided that the governing bodies of the various subdivisions may elect to treat officials of the subdivisions as employees for purposes of this section. SDCL §62-1-3. Notwithstanding SDCL §62-1-3(2), county highway superintendents, deputy sheriffs, constables, marshals, policemen, and firemen are deemed employees. Additional categories of employees that are specifically included or excluded in the workers' compensation law are enumerated in Chapter 62-1.

No employer may discriminate in hiring any prospective employee due to a preexisting injury if the injury does not affect the prospective employee's ability to perform the work for which the employee would otherwise be hired. SDCL §62-1-17.

Generally speaking, if an employee, who has previously sustained an injury or suffers from a preexisting condition, sustains a subsequent compensable injury, the current employer shall pay all medical expenses and compensation afforded by the workers' compensation law. SDCL §62-1-18.

B. Scope of the Statutory Scheme

South Dakota workers' compensation law provides benefits only for injuries that arise out of and in the course of employment. SDCL §62-1-1(7). For example, an employee at the workplace for recreation reasons, and not working, generally will not be covered for an injury sustained on the premises. Rohlck v. J & L Rainbow, Inc., 553 N.W.2d 521 (S.D. 1996).

For purposes of the workers' compensation scheme, the term, "injury," does not include a disease in any form except as it arises from the injury. SDCL §62-1-1(7). The South Dakota Code has separate chapters that specifically govern occupational diseases and occupational hearing loss claims.

In accordance with the 1999 amendments to the workers' compensation scheme, an injury is compensable only if it is established by medical evidence and subject to certain conditions. Specifically, an injury is not compensable unless employment or employment-related activities are a major contributing cause of the condition complained of; or if the injury combines with a preexisting disease or condition to cause or prolong the disability or the need for treatment, unless employment or any employment-related activity remains a major contributing cause of the disability, impairment, or need for treatment. If the injury combines with a preexisting work-related compensable injury, disability, or impairment, the subsequent injury is compensable if the subsequent employment contributed independently to the disability, impairment, or need for treatment. SDCL §62-1-1. A mental injury is compensable only if a compensable physical injury is or remains a major contributing cause of the mental injury, as shown by clear and convincing evidence. Id.

The burden of proving facts essential to award is on the claimant and is not met when evidentiary probabilities are equal. King v. Johnson Bros. Constr. Co., 155 N.W.2d 183 (S.D. 1967). Furthermore, causation must be established by a reasonable medical probability, and not a mere possibility. Hanten v. Palace Builders, Inc., 558 N.W.2d 76 (S.D. 1997).

Where an employee claims an occupational illness, that illness must be unique to the particular occupation and not caused by a condition coincidentally present in the workplace. Zoss v. United Building Centers, Inc., 566 N.W.2d 840 (S.D. 1997).

C. Scope of the Employer's Liability

Under this statutory scheme, an employer's liability is limited to the benefits available under and provided by the workers' compensation provisions. SDCL §62-3-1. Conversely stated, the only rights and remedies available to an employee for personal injury and/or death arising out of and in the course of employment are the benefits provided by the workers' compensation law of South Dakota. SDCL §62-3-2. Except in case of injury or death arising from an intentional tort, the workers' compensation remedy is exclusive.

In order to avail itself to the limited remedies provided by South Dakota workers' compensation law, an employer must secure and ensure payment of compensation to injured employees by one of the methods specifically set forth in SDCL §§62-5-2, 62-5-3, or 62-5-4. If an employer fails to do so, it is deemed to operate outside the provisions of the title, and is not entitled to its limitation on employer liability. SDCL §62-5-7. In that event, the employee has the option of pursuing a personal injury claim against the employer (including a claim for compensatory damages), or the employee may elect to pursue workers' compensation remedies, with the amount of benefits (other than medical expenses) being doubled. SDCL §62-3-11.

D. Scope of Benefits Available to the Employee

If a compensable work injury is established, an employer must provide necessary first aid, medical, surgical and hospital services, or other suitable and proper care, including medical and surgical supplies, apparatus or artificial members or aids necessary during disability or treatment. SDCL §62-4-1.

An employee has the right to the initial selection of a physician, surgeon, or hospital service at the employer's expense. SDCL §62-4-1. Once the physician has been selected or acquiesced to, the employer has no authority to approve or disapprove of suggested treatment. When a disagreement arises as to the treatment rendered or recommended by the physician, it is for the employer to show that the treatment was not necessary or suitable and proper. See Hanson v. Penrod Construction, Co., 425 N.W.2d 396, 399 (S.D. 1988).

The employer and insurer, however, retain the right to have the employee examined by a physician of their choosing at their own expense. SDCL §62-7-1. An employee's obstruction of, or failure to submit to, such examination may result in a temporary suspension of his or her right to compensation benefits. SDCL §62-7-3.

E. Indemnity Benefits

There are five types of indemnity benefits available under South Dakota Law: temporary total disability benefits, temporary partial disability benefits, permanent partial disability benefits, rehabilitation benefits, and permanent total disability benefits. See Chapter 62-4 for a more detailed explanation of each, including the extent of compensation to which the employee is entitled. All five require calculation of the employee's compensation rate, which is based on his or her average weekly wage. Generally speaking, the average weekly wage is calculated by taking the employee's total earnings in the 52 weeks prior to the injury and dividing it by 52. SDCL §62-4-24. If the employee has not been employed for 52 weeks prior to the injury, other calculation methods are provided in SDCL §§62-4-24 through 62-4-28.

F. Affirmative Defenses

1. Notice

Although most people view notice as an affirmative defense, it is actually the employee who bears the burden of establishing compliance with the notice provisions set forth in SDCL §62-7-10. An employee must "immediately, or as soon thereafter as practical, notify the employer of the occurrence of the injury. Written notice of the injury shall be provided to the employer not later than three business days after its occurrence." Id.

The employee's failure to give proper notice bars a claim for benefits unless the employee can show that the employer either had actual knowledge of the injury or was given written notice after the date of the injury, and the employee had "good cause" for failing to give written notice within three business days. SDCL §62-7-10. The issue of good cause is to be liberally construed in favor of the employee.

The time period for notice of claim begins when the employee/claimant, as a reasonable person, recognizes the nature, seriousness, and probable compensable character of the injury. Loewen v. Hyman Freightways, Inc., 577 N.W.2d 764 (S.D. 1997).

2. Intoxication, Willful Misconduct, or Intentional Injury

South Dakota law does not allow compensation for "any injury or death due to the employee's willful misconduct, including intentional self-inflicted injury, intoxication, illegal use of [controlled] drug[s], or willful failure or refusal to use a safety appliance furnished by the employer, or to perform a duty required by statute." SDCL §62-4-37. The employer has the burden of proof in asserting a defense of intoxication, willfulness or intentional conduct.

3. Unreasonable Refusal or Neglect of Treatment

An employee's entitlement to additional benefits may be barred by an unreasonable refusal of recommended medical treatment. See SDCL §62-4-43. The test for determining whether a refusal is reasonable includes inquiring "whether the refusal was reasonable based on the likelihood of success" of the treatment refused. Schlenker v. Boyd's Drug Mart, 458 N.W.2d 368 (S.D. 1990).

4. Falsification of Employment Applications

A false representation by an employee, regarding his or her physical condition or health when procuring employment, shall preclude an award of workers' compensation benefits for an otherwise compensable injury. SDCL §62-4-46. To avail itself of this defense, the employer or insurer must show that the employee intentionally and willfully made a false representation as to his or her physical condition; the employer substantially and justifiably relied on the false representation in hiring of the employee; and a causal connection exists between the false representation and the injury. Id.

5. Statute of Limitations

After July 1, 1999, the right to compensation is forever barred if no medical treatment has been obtained within seven years after the employee files a first report of injury. SDCL §62-7-35.3. However, if an injured worker experiences a change in condition after a release is signed, a claim may be reopened and reviewed, and additional compensation may be awarded. SDCL §62-7-33. See Sopko v. C & R Transfer Co., Inc., 1998 S.D. 8, ¶12, 575 N.W.2d 225.

D. Alternative Dispute Resolution

The Department of Labor provides, by administrative rule, for voluntary mediation of all disputes arising under the workers' compensation statutes. ARSD 47:03:01:17. The mediation is not binding upon the parties and can be conducted face to face, or by telephone upon request.

VIII. Personnel Administration

A. Employee Records

Employers in South Dakota are required to create and maintain employee records if they employ 25 or more employees. SDCL § 60-12-17. Any employer that employs a minor must keep employee records of said minors. SDCL § 60-12-6.

B. Required Postings

The South Dakota Division of Unemployment requires a poster to be posted on the job site regarding unemployment insurance. The Division of Unemployment provides this to employers for free. South Dakota workers' compensation laws require a posting of job safety information. No particular format is required. SDCL § 62-2-11.

C. Required Training

There are no specific state statutes that require employee training.

D. Meal and Rest Periods

There are no specific state statutes that mandate meal or rest breaks.

E. Payment Upon Discharge

1. Employee Voluntarily Quits

Employers must pay employees who voluntarily quit during the next regularly scheduled payday following the resignation. SDCL § 60-11-11. Employers can retain the paycheck until the employee returns all of the employer's property in his or her possession. Id.

2. Employee is Terminated by the Employer

Employers must pay employees who have been fired during the next regularly scheduled payday or as soon thereafter as the employee returns any property of the employer's that he or she may possess. SDCL § 60-11-10.

F. Employment References

A former employer may release information to any prospective employer regarding the work performance of a former employee and will not be held liable for its disclosure or consequences if that former employer has acted in good faith. The request must be made in writing from the prospective employer. The employee may request a copy of the former employer's response by making a written request. It is presumed that the former employer is acting in good faith under a clear and convincing standard which can be rebutted by showing the former employer acted: (1) recklessly, knowingly, or with a malicious purpose in revealing or disclosing false or misleading information, and (2) disclosing information that is subject to a nondisclosure agreement or disclosing any information that is confidential under any state or federal law. SDCL § 60-4-12.

IX. Privacy

A. Drug Testing

There are no specific state statutes that forbid drug testing in the workplace.

B. Personnel Records

Employers can share employee work performance records with prospective employers upon a written demand by the prospective employer. Employees may view the written response by the employer by making a demand in writing to see the response. SDCL § 60-4-12. Otherwise, there are no specific state statutes pertaining to the privacy of employee personnel records.

C. Off Duty Conduct of Employees

South Dakota is an employment-at-will state. The state does have a statute that forbids an employer from terminating an employee for his or her off duty use of tobacco products unless there is a bona fide occupational qualification that prevents the use of tobacco. SDCL § 60-4-11.

D. Medical Information/Records

It is illegal in South Dakota for an employer to use genetic information to restrict any right, discriminate against or deny employment of anybody on the basis of that information. SDCL § 60-2-20; SDCL § 60-2-21.

E. Employee Searches

There are no specific state statutes that forbid employee searches.

F. Lie Detector Testing

There are no specific state statutes that forbid lie detector testing of employees.

G. Fingerprint Testing

There are no specific state statutes that forbid fingerprinting of employees. South Dakota has several statutes requiring background checks of employees in certain sectors that require a fingerprint test and a criminal background test to be done by the Division of Criminal Investigation and the Federal Bureau of Investigation. Some of these sectors include attorneys, teachers, bail bondsmen, certain tribal positions, and people working in child welfare agencies. SDCL § 16-16-2.6; SDCL § 13-10-12; SDCL § 58-22-7; SDCL § 23-3-15.2; SDCL § 26-6-14.5.

H. Social Security Numbers

There are no specific state statutes that forbid the use of social security numbers as employee identification numbers.

I. Employee Surveillance and Monitoring

There are no specific state statutes that forbid the surveillance or monitoring of employees.

X. Unemployment

A. General Provisions

As in most states, unemployment insurance benefits in South Dakota are an aid to workers who have lost their jobs through no fault of their own. These benefits are not meant as a total replacement of wages, but as a protection against a total loss of wages. The unemployment compensation program in South Dakota is administered by the Unemployment Insurance Division of the South Dakota Department of Labor.

B. Calculating Benefits

The time period used to determine a claimant's eligibility for unemployment insurance benefits is the individual's base period. In South Dakota, the base period includes the first four of the last five completed calendar quarters immediately preceding the application for benefits. In general, the weekly benefit available to the claimant is equal to 1/26 of the wages paid to the claimant in the highest quarter of the base period. There is also a maximum weekly benefit amount, which, for the year 2003, was $241.00.

C. Probationary Period

Benefits paid to an employee are not charged against the employer's experience-rating account if the employee was "discharged or suspended for inability or incompetence to successfully complete a 90-day probationary period established between the employer and employee at the time of employment." SDCL 61-5-29(3). Note: this is why many employers have a 90-day probationary period outlined in the employee handbook.

D. Independent Contractor or Employee

A claimant is not entitled to unemployment benefits if he or she is an independent contractor, rather than an employee. With respect to this dichotomy, services performed by an individual for pay are considered covered employment, unless the following two conditions are shown:

• The worker is free from control or direction in the performance of the contract or services; and
• The worker is engaged in an independently established trade, occupation or business.

XI. Health & Safety and Unions - Industrial Relations

A. Health & Safety

There are no specific state statutes pertaining to health or safety measures in the workplace.

B. Unions

South Dakota's Labor Relation's Act can be found at SDCL Chapter 60-9A. Employees have the right of self-organization and the right to form, join, or assist labor organizations. They maintain the right to bargain collectively, through representatives of their own choosing, and may engage in lawful, concerted activities for the purposes of collective bargaining or other mutual aid or protection. Finally, employees have the right to refrain from participating in such activities. SDCL §60-9A-2. State law prohibits employers or labor unions from denying a prospective employee the right to work based on membership or non-membership in any labor union or organization. SDCL §60-8-3. Violation of this section is a Class 2 Misdemeanor. South Dakota also recognizes the existence of a civil action based on violations of this section. Dirks v. Sioux Valley Empire Elec. Ass'n, 450 N.W.2d 426 (S.D. 1990).

Labor organizations are specifically prohibited from denying membership or engaging in any unequal treatment of any person with respect to hiring, apprenticeship, training, tenure, compensation, upgrading, layoff or any other term or condition of employment because of race, color, creed, religion, sex, ancestry, disability, or national origin. SDCL §20-13-12.

If a collective bargaining agreement exists between an employer and a labor union, association, or organization, it is enforceable at law or equity. The same remedies are available for breach of a collective bargaining agreement as for breach of contract. SDCL §60-9-4.

The Department of Labor has jurisdiction over any labor dispute or grievance that is not subject to the provisions of the Federal Railway Labor Act, and over which the National Labor Relations Board lacks or has declined to assert jurisdiction. SDCL §60-9A-5. In case of a labor dispute or grievance, including but not limited to an impasse or failure to reach an agreement in negotiations, either party may request the Department to intervene. SDCL §60-9A-10.

Chapter 60-9A of the South Dakota Code also enumerates a number of forbidden employment practices by employers or collective bargaining units. These particular acts are deemed to be unfair labor practices. See SDCL §§60-9A-12 and 60-9A-13. Among the unfair practices listed is a refusal to negotiate collectively and in good faith.

For more information regarding labor and employment law in South Dakota, please contact:

Jon C. Sogn, Esq.
Lynn, Jackson, Shultz & Lebrun
U.S. Bank Building
141 N. Main Ave., Suite 800
P.O. Box 1920
Sioux Falls, SD 57101
T: (605) 332-5999
F: (605) 332-4249
jsogn@lynnjackson.com
www.lynnjackson.com