Recently, the Minnesota Court of Appeals, in Peterson v. City of Minneapolis, ruled that a complaint process in an employer’s anti-discrimination policy may toll the statute of limitations under the Minnesota Human Rights Act (MHRA).  At issue was a section of the MHRA stating that the Act’s one-year statute of limitations is “suspended during the time period a potential charging party and respondent are voluntarily engaged in a dispute resolution process involving a claim of unlawful discrimination under this chapter.”  Minn. Stat. § 363A.28, subd. 3.  The court of appeals held that the phrase “voluntarily engaged in a dispute resolution process” may include the process of investigating an employee’s internal complaint of discrimination under an employer’s anti-discrimination policy.  This ruling, if not overturned on appeal, significantly expands the scope of what most employers would view as a proper tolling of the statute of limitations.

Discrimination Complaint and Lawsuit

Peterson was a Minneapolis police officer who filed a complaint of discrimination with the City of Minneapolis’ Human Rights Department in November 2011.  The City, however, did not complete an investigation of Peterson’s complaint until January 2013, some 14 months later.  Peterson then filed a charge of discrimination and, thereafter, a lawsuit alleging discrimination based on the allegations contained in the internal complaint.

At the district court level, the City moved for summary judgment asserting that Peterson’s claim was time-barred because he had not filed it within one year of the alleged discriminatory act.  In response, Peterson argued that his claim was timely because the statute of limitations was tolled during the time the City was investigating his complaint under its anti-discrimination policy.  The district court rejected this argument and granted the City summary judgment on Peterson’s claim.

Peterson’s Appeal

On appeal, the Minnesota Court of Appeals reversed the district court, holding that an employer’s complaint process under an anti-discrimination policy may be considered a “dispute resolution process” in which the employer and the employee were “voluntarily engaged.”  In reaching this conclusion, the court relied on several cannons of statutory construction involving the language of the statute, and rejected all of the employer’s arguments that a complaint process required by the MHRA cannot be a voluntary dispute resolution process.

The court of appeals’ analysis in Peterson is strained.  Relying on the concept that the MHRA is to be construed broadly, the court adopted what can only be viewed as a vastly overbroad view of “dispute resolution process.”  Indeed, a prior federal court decision with respect to this statute had ruled that it implied the presence of a third-party mediator. 

The court of appeals failed to recognize that employers, like the City, are required to have anti-discrimination policies in place for the purpose of seeking to timely and appropriately investigate discrimination complaints and take action, if required.  It is the employer’s obligation to determine if its policy was violated and properly discipline any employee at fault—not “resolve” a “dispute” between the employer and its employee.  Thus, the employer is not involved in a “dispute resolution process” between it and the employee; it is involved in an investigative process to determine whether the complaint is valid (e.g., “my co-worker discriminated against me”) and impose appropriate discipline.  This involves the employer as decision-maker, not as a participant in a “dispute resolution process.”  Indeed, in many instances, employees bring lawsuits asserting that the employer did not properly investigate the complaint or impose appropriate discipline.  Claims such as these by employees demonstrate that employers who investigate discrimination complaints are not involved in attempting to resolve a dispute with an employee, but instead are being asked to determine if the complaint is valid and, if so, what discipline is appropriate.

Further, the court failed to consider a competing legal interest—wanting employers to investigate discrimination claims and handle employee complaints in a timely fashion.  This interest may be adversely impacted by the court of appeals’ decision in Peterson. 

Finally, the court failed to consider what obligations a charging party, such as Peterson, has to timely bring a complaint of discrimination or be barred from doing so.  Indeed, what likely affected the court’s analysis is the fact that the City’s investigation of the internal complaint took 14 months—longer than the statute of limitations itself.  Nonetheless, there was nothing stopping Peterson from filing a complaint with the Minnesota Department of Human Rights despite the pendency of his internal complaint.  The court, however, ignored any obligations Peterson had in this instance.

Practical Impact for Employers in Minnesota

Despite the apparent concerns with the analysis adopted by the court of appeals, Minnesota employers are currently required to take the Peterson holding into account.  Practically speaking, employers should keep the following considerations in mind:

1.         Assure Timely Processing of Employee Complaints.  Based on Peterson, Minnesota employers will now need to ensure that employee complaints are processed as expeditiously as possible, keeping in mind the overarching consideration of assuring proper investigation and analysis of the complaint.  This may mean that employers will be required to pay closer attention to the timeframe within which a complaint is being processed.

2.         Modify an Anti-Discrimination Policy to Make Clear That it is Not a Dispute Resolution Process.  One option for employers, in addition to timely processing of complaints, is to modify the employer’s anti-discrimination policy to make clear that it does not involve a dispute resolution process, but rather a process by which the employer is investigating complaints and enforcing its policy.  While this modification has not been approved or indicated by the court of appeals, it may demonstrate in other cases that the policy at issue is not a dispute resolution process governed by the statute.

3.         Be Mindful of Statute of Limitations Issues.  Employers may now need to reconsider when the one-year MHRA statute of limitations will expire based on the length of the complaint process.  Employers, at least for now, may need to exclude the period of the complaint process when calculating the statute of limitations.  Employers would be wise to also formally “end” the complaint process by a written document sent to the complaining employee.

The Minnesota Supreme Court might consider the ruling in Peterson in the future.  If and until that occurs, however, employers should take the ruling in Peterson into account going forward.