Minnesota Supreme Court Holds Six-Year Statute of Limitations Applies to Reporting Claims under the Minnesota Whistleblower Act
On January 20, 2016, the Minnesota Supreme Court affirmed the Minnesota Court of Appeals’ decision in Ford v. Minneapolis Public Schools in a narrow holding that leaves unanswered some important questions regarding whistleblower liability.1
The Minnesota Whistleblower Act (“MWA”), Minn. Stat. § 181.932 (2012), prohibits retaliation against an employee who makes a good-faith report of a violation or suspected violation of law. Prior to the Ford decision, Minnesota courts had applied a two-year limitations period to these claims.2 With its decision in Ford, the Minnesota Supreme Court has held that the statute of limitations for a retaliation claim for reporting is six years for a cause of action arising under this law.
The question before the court in Ford was, based on its holding in Sipe v. STW Manufacturing, Inc.,3 whether the reporting subdivision arose out of the common law (and thus was subject to the two year limitations period) or was purely a creation of statute and thereby subject to a six year limitations period. According to the Minnesota Supreme Court, while refusal claims under the statute had a basis in common law,4 a claim for wrongful discharge based on a good-faith report of an illegality is purely a creature of statute and has no counterpart at common law.
Because Ford’s claim was only made under the reporting potion of the statute, the court did not reach the question of whether a refusal claim under the MWA is also subject to the six-year statute of limitations. A refusal claim, under subdivision 1(3) of the MWA, is based on an employee’s refusal to “perform an action that the employee has an objective basis in fact to believe violates” the law. The court acknowledged that Minnesota also recognizes a common law cause of action for a refusal claim, and the inclusion of subdivision 1(3) in the MWA appears to have codified this type of claim. As a result, unlike the reporting claim at issue in Ford, there is a Minnesota common law counterpart to a refusal claim. Generally under Minnesota law, for causes of action that originate at common law, a two-year statute of limitations applies. In the context of the MWA, it remains to be seen whether courts will continue apply the two-year statute of limitations to a refusal claim.
While highly unusual for there to be multiple statutes of limitations for different provisions of the same statute, the key takeaway of the Ford decision is that courts must now apply a six-year statute of limitations to claims under subdivision 1(1) of the MWA and all other non-refusal claims in the statute. Left for another day is whether the courts will continue to apply the two-year statute to refusal claims under subdivision 1(3). Regardless, employers must continue to remain vigilant in carefully investigating employee allegations of wrongdoing and document the steps taken in those investigations, particularly given the challenges of fading memories and employee turnover that can occur over the lengthy six-year period.
1 Ford v. Minneapolis Pub. Schs., A13-1072 (Minn. 2016).
2 See Larson v. New Richland Care Ctr., 538 N.W.2d 915, 921 n.5 (Minn. App. 1995), abrogated on other grounds by Gordon v. Microsoft Corp., 645 N.W.2d 393 (Minn. 2002).
3 Sipe, 834 N.W.2d at 686
4 See Phipps v. Clark Oil & Ref. Corp., 408 N.W.2d 569, 571 (Minn. 1987).