Under the Minnesota Human Rights Act (MHRA), an employee has one year to file a legal claim with the Minnesota Department of Human Rights or a court for alleged unlawful employment discrimination. That year, however, does not count the time the parties voluntarily engage in a dispute resolution process. See Minn. Stat. § 363A.28, subd. 3. Until recently, many believed that only formal dispute resolution processes, such as mediation or arbitration, qualified for tolling (suspending) the one-year statute of limitations (SOL) period. However, a recent Minnesota Court of Appeals case found that even an employer’s internal investigation can toll the running of the SOL if the underlying complaint involves alleged unlawful discrimination.

Overview of the Case

The case, Peterson v. City of Minneapolis, involved a police officer who filed an age discrimination complaint with the city’s human resources department, claiming that the city had transferred him based on his age in violation of the city’s “Respect in the Workplace Policy.” The human resources department investigated the complaint for over a year and determined that Peterson’s transfer had not been based on his age. Peterson later filed an MHRA age discrimination claim in state court, and the city asserted that the claim was time barred because it had not been filed within the one-year SOL. The district court agreed with the city and granted summary judgment in the city’s favor.

The Court of Appeals reversed, finding that the human resources investigation of Peterson’s internal complaint qualified as a dispute resolution process that tolled the SOL. Notably, the Court determined that a dispute resolution process does not need to involve a third-party neutral or be designed to resolve MHRA claims in order to qualify for tolling. Thus, a complaint and investigation simplyinvolving a MHRA discrimination claim tolls the MHRA SOL, even when the MHRA is not explicitly invoked or the primary focus.

Implications for Employers

This case means that the MHRA’s one-year SOL comes with an “asterisk” when an internal complaint and investigation include allegations that involve potential MHRA claims. Employers cannot assume that an MHRA legal action arising from allegations not subject to formal procedures will be barred after a year has passed and, depending on how long the internal investigation takes, employees may be able to file a charge or a lawsuit much more than a year after the alleged discrimination supposedly occurred. Also, an employer’s prolonged investigation will only prolong the deadline for the employee to file a legal claim. This result is not an excuse to rush or bypass a thorough investigation, but it does provide additional incentive for employers to treat employee complaints seriously and investigate them in a timely manner.