Minnesota Makes the Employer Prove You Could Have Earned the Money — the Duty to Mitigate Is a Defense the Employer Carries, Not an Element You Have to Disprove

Who has to prove what

Back pay is the largest number in most employment cases, and the fight over it is usually not about the arithmetic. It is about whether the employee could have replaced the income and did not.

Minnesota decided who carries that question in 1961. Zeller v. Prior Lake Public Schools, 259 Minn. 487, 493 (1961), a teacher’s breach-of-contract case:

The burden of proof to establish that such an employee could have earned or did earn compensation in mitigation of damages rests upon the party whose wrongful actions caused the breach and who claims mitigation of damages as a defense in an action based upon such breach.

The court adopted the reasoning in the same paragraph, quoting an annotation that opens by stating the rule as the overwhelming weight of authority in the United States:

By the overwhelming weight of authority in the United States the burden of proving any benefit that flows to the discharged employee is on the employer in an action for lost wages. Another way of stating this rule is that prima facie a wrongfully discharged employee is entitled to full wages for the term of the contract.

Zeller, 259 Minn. at 494 (quoting Annotation, 17 A.L.R.2d 968, 978). The annotation’s next sentence, quoted by the court along with those two, states the same point as a burden: to reduce damages an employer must show affirmatively that the discharged employee could have had or did have other earnings after the discharge.

On the facts, the school district lost on that burden without much trouble. It argued that the teacher had not sought other work for the year in question, and the court answered that it “submitted no evidence that she had refused to accept or that she could have found other employment of a similar character in the locality.” Id. at 493. She testified that she had held herself available and nothing controverted it.

The offer rule, as Minnesota wrote it in 1934

Schisler is short and the whole rule is in two paragraphs. A salesman under a contract running to January 1 was discharged on December 5 and paid through December 15. The employer then wrote offering him reemployment to December 31 in the same capacity at the same salary. He refused and sued for the $150 he would have earned. At 161:

As a general rule, where, under an employment contract, the employer discharges the employe without cause, the employe is bound to accept an offer made in good faith by the employer to reemploy him in the same or a similar capacity at the same salary. Damages in consequence of the breach are mitigated by the employe’s refusal to accept the offer, and the burden upon defendant to show that plaintiff could have secured like employment at the same salary is sustained by proof of such good faith offer and its refusal.

Note the last clause. A good-faith offer of equivalent work, refused, is how the employer discharges its burden — not a separate rule that overrides it.

Then the exception, on the same page:

An exception to this rule is noted in 72 A. L. R. 1057. It is there stated, and we think correctly, that where further association between the parties would be offensive or degrading to the employe because of the wrongful act of the employer, the offer to reemploy is ineffectual to diminish damage.

Two case citations follow, and then a sentence that keeps the exception from swallowing the duty: being excused from the employer’s own offer does not excuse the employee from making a reasonable effort to find other similar employment. Schisler, 193 Minn. at 161. Schisler himself lost: the record showed no “wrong of the employer in discharging the employee … of such character that the parties could not be restored to their former relationship,” Schisler, 193 Minn. at 161 (quoting Price v. Davis, 187 Mo. App. 1, 15 (Mo. Ct. App. 1915)), and the court held the record “compels a finding of good faith” in the offer. Id.

What “similar capacity” looked like in a case that went the other way

Feges v. Perkins Restaurants, Inc., 483 N.W.2d 701 (Minn. 1992), applied Schisler to a general manager who was terminated and offered two other jobs at the same company. The supreme court restated the rule at 709 — “if the employer offers in good faith to reemploy the discharged employee in the same or similar capacity at the same salary, the employee’s failure to accept the offer mitigates the damages for which the employer is liable” — and then walked through why a jury was entitled to find that neither condition was met.

On equivalence, at 709:

The duties were significantly different. The two positions offered to Feges were of lower status in the Perkins’ hierarchy. The positions were at different restaurants. The kitchen manager position required physical labor not required of a general manager; the dining room manager position would have required Feges to work the evening shift whereas as general manager she usually worked days. While neither of the offered positions is inherently degrading, it is reasonable that Feges would not consider them similar to her current position, justifying her refusal to accept them, regardless of salary.

The last three words are the part employers do not expect: “regardless of salary.” Equivalence in Feges was about status, location, physical demands, and shift — not pay alone. And pay was not actually equal either, because “the salary range of the two alternative positions was lower than the range of the general manager and made long-term earnings potential not equivalent.” Id.

On good faith, at 709, the court pointed to one sentence of the employer’s own testimony: the manager who made the offers “testified that he did not expect Feges to accept either of the other two jobs when he offered them to her. This admission would permit the jury to question whether the offers were made in good faith.” The court also noted that salary was never discussed when the jobs were offered, so the employee “had no reason to know that the positions would pay the same.” Id.

The conclusion the court drew is worth reading as a description of how the question is decided rather than as a rule about restaurant jobs: “Based on this evidence, the jury could reasonably have found either that Perkins’ offer was not for a position in a ‘similar capacity’ or that the offer was not made in good faith, or both.” Id.

Mitigation is also what limits front pay

The same opinion holds that damages for breach of an employment contract are not capped at the trial date, and the first of the three limits it names to keep front pay from becoming guesswork is the mitigation duty. Feges, 483 N.W.2d at 710:

First, the plaintiff’s duty to mitigate damages limits front-pay awards to those cases where the plaintiff has been unable to find comparable employment after termination.

The other two limits, and the holding on jury instructions that goes with them, are worked through on your handbook is not a contract until it is, which is the guide about the underlying breach-of-contract claim. What matters here is the direction of the link: an employee who has found comparable work has, by that fact, ended the front-pay claim, and an employee who has not is the one for whom front pay exists.

Two different things are called “mitigation,” and only one of them is this

The word does a second job in Minnesota employment law and the two uses have nothing to do with each other.

In Henry v. Independent School District #625, No. A21-0004 (Minn. Feb. 8, 2023), the district court had granted summary judgment against an employee because she quit without giving the employer a chance to fix the conditions she quit over. The supreme court called that a “mitigation requirement” and refused to impose it, slip op. at 27:

We therefore decline to impose a mitigation requirement on plaintiffs claiming disparate-treatment-based constructive discharge.

That sentence is about what an employee must do before resigning in order to have a claim at all. It says nothing about what an employee must do after a discharge to preserve damages. Reading Henry as a statement about back pay would be reading a word rather than a holding.

The Human Rights Act does not use the word

Neither Minnesota remedy section for a chapter 363A employment case says anything about mitigation, interim earnings, or a duty to seek other work. A search of the posted text of Minn. Stat. § 363A.29 and Minn. Stat. § 363A.33 for “mitigat” returns nothing in either section. What the sections do instead is make the relief discretionary in the first instance. Section 363A.33, subd. 9(1):

In addition to the remedies in subdivision 8, where a case involves discrimination in: (1) employment, the court may order: (i) the hiring, reinstatement, or upgrading of an aggrieved party who has suffered discrimination, with or without back pay …

Section 363A.29, subd. 5(1), gives an administrative law judge the same option in the same words. The full remedial architecture of the Act — including the mandatory compensatory award in § 363A.33, subd. 8(a), which is not back pay — is on what the Human Rights Act can award.

The Whistleblower Act is drafted the same way. Minn. Stat. § 181.935(c) provides that on a finding of a violation “the court may order any appropriate relief, including but not limited to reinstatement, back pay, restoration of lost service credit, if appropriate, compensatory damages, and the expungement of any adverse records of an employee who was the subject of the alleged acts of misconduct.” Back pay sits inside a discretionary list there too. The Act’s remedies are on their own page.

Unemployment benefits and back pay are reconciled by statute, not by argument

An employee who draws unemployment and later recovers back pay for the same weeks has been paid twice for those weeks, and Minnesota resolves that in the unemployment chapter rather than in the damages calculation. Minn. Stat. § 268.085, subd. 6(a):

Back pay received by an applicant within 24 months of the establishment of the benefit account with respect to any week must be deducted from unemployment benefits paid for that week, and the applicant is overpaid the unemployment benefits under section 268.18, subdivision 1.

If the back pay is not paid with respect to a specific period, the back pay must be applied to the period immediately following the last day of employment.

Paragraph (b) then routes the money. If the back pay “is reduced by the amount of unemployment benefits that have been paid,” the withheld amount must be “paid by the taxpaying or reimbursing employer to the trust fund within 30 calendar days,” and when the fund receives it, an overpayment is created that clears the employer’s account and “the back pay must then be applied to the unemployment benefit overpayment, eliminating any effect on the applicant.”

Paragraph (c) states the two results the mechanism is built to produce: an employer “neither overpays nor underpays the employer’s proper portion of the unemployment benefit costs,” and the applicant “is placed in the same position as never having been paid the unemployment benefits.”

Two details in that subdivision are easy to miss and both are load-bearing. The 24-month clock runs from the establishment of the benefit account, not from the discharge and not from the judgment. And paragraph (d) reaches past back pay by name:

This subdivision applies to payments labeled front pay, settlement pay, and other terms describing or dealing with wage loss.

The label on the payment does not control. What the unemployment side of a separation looks like in the first place is on the unemployment hearing that decides the case.

What this page does not do

It sets out who has to prove mitigation in Minnesota, what the supreme court has found sufficient and insufficient on the question of an equivalent job, and where the statutes are silent. It does not evaluate a job search. Whether a particular replacement position was in a “similar capacity,” whether a particular offer was made in good faith, and what a reasonable effort looked like in a particular labor market are questions decided on a record — pay stubs, applications, rejections, and the employer’s own testimony about what it expected the employee to do — and building that record is not what a description of the rule accomplishes.

Whether the discharge was unlawful at all is the prior question, and it is the one that has to be answered before any of this matters.

Currency

The Revisor currently publishes the 2025 edition of Minnesota Statutes. History lines read on the sections cited here: § 363A.33 ends “2024 c 105 s 16-19”; § 363A.29 ends “2024 c 105 s 14,15”; § 181.935 reads “1987 c 76 s 5; 2007 c 135 art 3 s 17”; § 268.085 ends “2023 c 55 art 1 s 30.” The Revisor’s table of Minnesota Statutes affected by session laws was queried one exact section at a time. The only 2026 row returned for any of them is a 2026 Regular Session, chapter 97, article 13, section 1 amendment to § 363A.29, subdivision 1, which is the hearing-conduct provision and is not quoted here. Section 268.085, subdivision 6, was last amended by 2017 Regular Session, chapter 35, article 3, section 9. Zeller, Schisler, and Feges are Minnesota Supreme Court decisions. None of the statutes cited on this page speaks to the mitigation rule those decisions state. This page makes no representation about their later treatment in other cases; a citator pass is not part of the verification behind it.