Minnesota Supreme Court Affirms Six-Year Statute of Limitations For Certain Whistleblower Claims
On January 20, 2016, the Minnesota Supreme Court issued a decision holding that a six-year statute of limitations applies to whistleblower claims brought under Subdivision 1(1) of the Minnesota Whistleblower Act (MWA). Ford v. Minneapolis Public Schools, A13-1072 (Minn. Jan. 20, 2016).
Subdivision 1(1) of the MWA creates a claim when an employee is discharged because she reports in good faith a suspected, planned, or actual violation of any federal or state law or common law or rule adopted pursuant to law to an employer or any governmental body or law enforcement official. Minn. Stat. § 181.932, subd. 1(1). Yvette Ford alleged that she was terminated after having had repeatedly reported to her employer purportedly unethical and illegal activities.
In December 2014, the Minnesota Court of Appeals determined that a six-year – rather than a two-year – statute of limitations applied to Ford’s claim. The Minnesota Supreme Court has now affirmed this application of the six-year period found in Minn. Stat. § 541.05, subd. 1(2) regarding “liability created by statute” to claims under Subdivision 1(1) of the MWA. In doing so, the Supreme Court concluded that the two-year period found in Minn. Stat. § 541.07(1) was inapplicable because claims under Subdivision 1(1) of the MWA were not based on common law causes of action not created by statute. See Sipe v. STS Manufacturing, Inc., 834 N.W.2d 683, 686 (Minn. 2013). As the so-called “reporting” claims under Subdivision 1(1) have no counterpart in Minnesota common law, the Supreme Court held that the longer statute of limitations applies.
Interestingly, the Supreme Court noted in Ford that it has, however, recognized a common law cause of action based on an employee’s discharge for refusing to violate the law. Phipps v. Clark Oil & Ref. Corp., 408 N.W.2d 569, 571 (Minn. 1987). The statutory counterpart to this common law “refusal” claim is found in Subdivision 1(3) of the MWA. While the Supreme Court did not decide in Ford the applicable limitations period for Subdivision 1(3) claims, based on the court’s analysis, it is possible that the two-year period could apply to such claims. In response to the defendant employer’s argument that such an anomaly could result from the court’s decision, the Supreme Court noted that this policy argument was instead one for the Legislature to consider.
Takeaway: The Minnesota Supreme Court has affirmed that MWA “reporting” claims under Subdivision 1(1) are subject to a six-year statute of limitations. It is uncertain, however, whether the same period applies to “refusal” claims under MWA Subdivision 1(3) or whether such claims are controlled by a shorter two-year period.