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Statute of limitations halted during internal dispute resolution process, says Minnesota Supreme Court

The Minnesota Supreme Court ruled this week in Peterson v. City of Minneapolis that the one-year statute of limitations set by the Minnesota Human Rights Act ("MHRA") is suspended while the employer and employee voluntarily engage in an employer's internal dispute resolution process. As a result, employees will now in many cases have additional time to pursue claims under the MHRA.

Note: this is an update to my May 5, 2016 post regarding the decision by the Minnesota Court of Appeals in this case. The Supreme Court's ruling this week affirmed the Court of Appeals' decision.

The Peterson case started when two Minneapolis police officers claimed their October, 2011 transfers were the result of age discrimination. Using the city's "Respect in the Workplace" policy, the officers filed complaints with the city's human resources department a month later. The HR department investigated the complaints, and in January, 2013 the department concluded that the transfers were not based on age. The officers then filed age discrimination charges with the Minnesota Department of Human Rights. They later withdrew those charges, but in March, 2014 they filed a lawsuit against the city of Minneapolis.

The trial court dismissed the officers' case on the basis that it was started after the one year statute of limitations in the MHRA had expired.

Note: A "statute of limitations" is the legal time limit by which someone must take legal action to protect their claims. Typically, if a person misses the deadline, they are forever barred from pursuing their legal claims, no matter how meritorious they may be.

One of the officers appealed to the Minnesota Court of Appeals, which reversed the trial court's decision. The City of Minneapolis appealed to the Minnesota Supreme Court, which agreed with the Court of Appeals.

In reviewing the case, the Supreme Court noted that under the MHRA, the running of the one-year limitation period is suspended during the time an employee and employer are:

voluntarily engaged in a dispute resolution process involving a claim of unlawful discrimination under [the MHRA], including arbitration, conciliation, mediation or grievance procedures pursuant to a collective bargaining agreement or statutory, charter, ordinance provisions for a civil service or other employment system or a school board sexual harassment or sexual violence policy.

Thus, the issue before the court was whether filing an internal complaint with the city's HR department meant the parties were "voluntarily engaged in a dispute resolution process involving a claim of unlawful discrimination," so as to suspend (or "toll") the running of the MHRA's one-year statute of limitations. The court ruled that they were.

Specifically, the court held that an employee's decision to file an internal complaint satisfies the "voluntarily engaged" part of the tolling provision. The court also ruled that the city's "Respect in the Workplace" policy fit the statutory definition of a "dispute resolution process" under the MHRA. And, because the employee's complaint "involved" age discrimination, it was covered by the tolling provision.

Putting it all together, the court ruled that when the employee filed his internal age discrimination complaint, which then triggered the city's attempts to resolve it, the parties "voluntarily engaged in a dispute resolution process involving a claim of unlawful discrimination under [the MHRA]." This, the court said, suspended the statute of limitations. Consequently, the officers' MDHR charge, which was filed far more than a year after the alleged discrimination, was ruled to be timely.

With this ruling, the Minnesota Supreme Court has essentially given employees a tool for dragging out their deadline for filing MHRA charges or lawsuits well beyond the one-year time limit they would otherwise have. This is because for as long as they and the employer are engaged in an internal HR complaint process, the statute of limitations clock will likely not be ticking.

Taken to extremes, this means an employee could probably file an internal complaint 364 days after an alleged discriminatory act, thereby suspending the statute of limitations that would otherwise have expired the next day. And, because the court broadly interpreted what it means to "voluntarily engage in" such internal complaint processes, it appears an employee could extend the time limit almost indefinitely by repeatedly engaging the employer in ongoing discussions about the same problem or the process itself.

It is difficult to predict how this case will play out in practice. However, to minimize its impact, one option might be to revise HR complaint policies to address how such complaints are treated in light of the MHRA's statute of limitations.

Also, employers should promptly investigate and resolve internal complaints of unlawful discrimination and harassment. In addition to satisfying any legal obligation there may be to prevent and stop such conduct, this would also seem to end what could be perceived as "voluntary engagement" in a "dispute resolution process." And, once the process ends, it would appear that the MHRA's clock would starting ticking again.

For more information about these or other employment law issues, please contact me.

The comments posted in this article are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2017 Swenson Lervick Syverson Trosvig Jacobson Schultz Cass, PA.

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