Minnesota Supreme Court Rules Internal Complaint Tolls MHRA Statute of Limitations

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The Minnesota Supreme Court has held that an employee’s complaint to human resources, and his employer’s investigation, constituted a “voluntary dispute resolution process,” thus suspending the Minnesota Human Rights Act’s (MHRA) one year statute of limitations period. As a result, the employee’s lawsuit filed more than one year after the alleged discriminatory act was not time-barred under the statute. The April 12, 2017 decision in Peterson v. City of Minneapolis relied on a seldom-cited provision in the MHRA which suspends the limitation period “during the time a potential charging party and respondent are voluntarily engaged in a dispute resolution process involving a claim of unlawful discrimination under this chapter, including arbitration, conciliation, mediation or grievance procedures.” Minn. Stat. § 363A.28, subd. 3.

In November 2011, Peterson had filed a complaint with the City’s human resources department under the employer’s “Respect in the Workplace Policy.” The Workplace Policy provided procedures for filing a complaint and outlined the steps the City would take to resolve the issue, including investigation. The investigation into the complaint lasted more than one year (concluding in January 2013), and ultimately the City determined it could not substantiate Peterson’s claim.

Peterson then filed an age discrimination lawsuit under the MHRA. The City moved for summary judgment, arguing that Peterson’s claim was time-barred because he filed it outside the one-year statute of limitations. The district court agreed and dismissed the claim, however, the court of appeals reversed. The Minnesota Supreme Court affirmed the Court of Appeal’s decision.

Key questions in the Supreme Court’s consideration whether the internal complaint procedure tolled the limitations period included: (1) whether the parties “voluntarily engaged” in a process and (2) whether the process constituted a “dispute resolution process.”

(1) Noting that the MHRA does not define the words “voluntarily engage,” the Peterson Court cited to dictionary definitions and held a party “must act on its own free will to involve itself in the qualifying process.” Since Peterson was not required to file an internal complaint but voluntarily chose to do so, his decision was considered voluntary and in accordance with the statute.

(2) The Peterson Court next applied a very broad interpretation of the undefined term “dispute resolution process” to the City’s Workplace Policy and noted that the statutory provision says that the statute of limitations is suspended when the parties are “voluntarily engaged in a dispute resolution process…including arbitration, conciliation, mediation or grievance procedures.” The Court found that arbitration, conciliation, mediation, and grievance procedures contained elements of formality, were processes capable of providing relief to the complainant, and were often completed under written guidelines or rules. The Court said such processes have a clearly identifiable start and end date, and although not necessary, often included the use of a neutral third-party. Using these criteria, the Peterson Court analyzed the City’s internal complaint process and focused on the fact that it was a formal process with the capacity to resolve Peterson’s claim, was outlined in a written document, and involved individuals “somewhat analogous to third parties,” in the form of investigators assigned to investigate the internal allegations. For those reasons, the Court concluded that the Workplace Policy possessed the same traits as the examples listed in the statute and was a “dispute resolution process” under the MHRA.

The Peterson case leaves a number of issues unclear including its application to other cases and other internal complaint processes. In addition, it is unknown as to whether a court will always toll the statute of limitations for the length of time that it takes to give an employee a response to an internal complaint, thereby extending the statute of limitations by that same period of time. Another option would be that a court will only toll the statute of limitations when the length of time it takes to resolve an internal complaint extends beyond the limitations period, thus precluding an employee who waits for such resolution from timely filing an MHRA charge or lawsuit.

In light of this ruling, employers are encouraged to review the reporting and investigation provisions in their discrimination and harassment policies and be cognizant of the statute of limitations when an employee makes an internal complaint. It is advisable to have legal counsel assist in drafting such policies as well as provide advice and counsel when a complaint is made, especially because of the risk of tolling the statute of limitations in such cases. Internal investigations should be conducted as promptly as possible and employers must be careful to document the conclusion of the investigation to the employee filing the internal report. Some practitioners, including this writer, suggest employers add a disclaimer to any internal complaint process indicating that the company’s internal complaint process is not a “dispute resolution process” in an attempt to avoid bringing the matter within the scope of the MHRA and the Peterson decision.

 

This employment law update was written by Stacey DeKalb, chair of Lommen Abdo’s Employment Practice Group. Employers with questions are advised to contact the Lommen Abdo Employment Law Practice Group so we can assist in addressing the issues raised in this update. If you have questions about this topic, or any other aspect of your company’s employment obligations, please contact Stacey DeKalb at 612.336.9310 or stacey@lommen.com.

 

THESE MATERIALS ARE INTENDED TO PROVIDE AN OVERVIEW OF EMPLOYMENT ISSUES IN THE WORKPLACE AND ARE NOT INTENDED TO GIVE LEGAL ADVICE.  IF YOU HAVE QUESTIONS OR COMMENTS REGARDING EMPLOYMENT LAW ISSUES, PLEASE CONTACT STACEY DEKALB AT THE LOMMEN ABDO EMPLOYMENT LAW DEPARTMENT AT 612.336.9310, 715.386.8217 OR 800.752.4297.