Turner v. IDS Financial Services, Inc.

459 N.W.2d 143, 1990 WL 115199

• Court: Court of Appeals of Minnesota
• Decided: October 22, 1990
• Docket: C3-90-267
• Status: Published

Opinions

OPINION

RANDALL, Judge.

IDS Financial Services, Inc. (IDS) appeals from the denial of its motion for summary judgment on respondent C. Thomas Turner’s claim of discriminatory discharge from employment. The issue raised on appeal is whether the limitations period of Minn.Stat. § 363.06, subd. 3 begins to run on such a claim the date an employee receives notice of termination or the date of discharge. The trial court ruled that the limitations period starts running on the date of discharge and certified the issue as important and doubtful for purposes of appeal pursuant to Minn.R.Civ. App.P. 103.03(h).¹ We affirm.

FACTS

Respondent was employed by IDS for 22 years and managed the Minneapolis division of IDS for 19 of those years. On December 19, 1986, respondent was suspended from his duties pending an investigation into the perceived “religious atmosphere” in the Minneapolis office. On February 4, 1987, respondent was notified in writing that his employment would be terminated pursuant to the “without cause” provision of his contract on March 17,1987. Respondent did not return to work following his suspension. He was, however, paid through the effective date of termination.

Respondent subsequently commenced this action in Hennepin County District Court on January 8, 1988. He asserted five separate claims against IDS: (1) discrimination based on religious beliefs; (2) age discrimination; (3) breach of contract; (4) defamation; and (5) intentional infliction of emotional distress. IDS moved for summary judgment on all claims. The trial court granted summary judgment on the defamation, contract, and intentional infliction of emotional distress claims. The court denied the motion on the claims of religious and age discrimination under the Minnesota Human Rights Act (MHRA).

The grounds for the summary judgment motion on the MHRA claims were: (1) that respondent filed his claims more than 300 days after the discriminatory' practice occurred and the claims were therefore untimely; and (2) that no issues of fact were presented by respondent's discrimination claims and IDS was entitled to summary judgment as a matter of law. With regard to the limitations issue, IDS argued that the 300-day period started on February 4, 1987, the day respondent received “unequivocal notice” of termination. The trial court, relying on Fitzgerald v. Norwest Corp., 382 N.W.2d 290 (Minn.App.1986), pet. for rev. denied (Minn. Apr. 24, 1986), rejected this argument and concluded the limitations period started to run on March 17, 1987, the date of discharge. The court also determined that factual issues had to be resolved on both the age and religious discrimination claims. The trial court certified the limitations issue as important and doubtful for purposes of immediate appeal. IDS then petitioned the supreme court for accelerated review. The supreme court denied the petition on February 22, 1990.

ISSUE

Did the trial court err by concluding that, in a claim of discriminatory discharge from employment, the 300-day limitations period of Minn.Stat. § 363.06, subd. 3 begins to run on the date of discharge?

ANALYSIS

Minn.Stat. § 363.03, subd. 1 (1986) provides in relevant part:

Except when based on a bona fide occupational qualification, it is an unfair employment practice:

(2) for an employer, because of * * * religion, * * * or age,

(b) to discharge an employee[.]

Section 363.06, subd. 3 states:

A claim of unfair discriminatory practice must be brought as a civil action * * * within 300 days after the occurrence of the practice.

The supreme court has never interpreted the “occurrence of the practice” language in a situation identical to this one. But, as the trial court correctly noted, a panel of this court addressed the issue in Fitzgerald. Thus, we begin our analysis with a review of Fitzgerald.

The plaintiff in Fitzgerald was notified that her position was being eliminated two weeks prior to her actual discharge date. She subsequently filed an age discrimination claim under the MHRA against her former employer. The employer moved for summary judgment claiming plaintiffs action was time barred. The trial court granted the motion ruling that the “occurrence of the practice” language of section 363.06, subd. 3 referred to the date the employee received notice, citing Chardon v. Fernandez, 454 U.S. 6, 102 S.Ct. 28, 70 L.Ed.2d 6 (1981) (per curiam) as support for the ruling.

A panel of this court reversed, holding:

[T]he statute of limitations for Fitzgerald’s age discrimination claim did not begin to run until the date of her discharge. Therefore, her claim under the Minnesota Human Rights Act was not barred by the statute of limitations.

Fitzgerald, 382 N.W.2d at 292. The panel recognized that the United States Supreme Court reached the opposite conclusion under federal law in Chardon, but concluded:

Under the particular circumstances of this case, * * * the Minnesota Supreme Court has chosen to depart from the principles used in Title VII cases.

Id.

The panel cited Richardson v. School Board of Independent School District No. 271, 297 Minn. 91, 210 N.W.2d 911 (1973), and Buchholz v. Capp Homes, Inc., 321 N.W.2d 893 (Minn.1982) as support for its decision. In both cases, our supreme court held that the date of discharge triggers the statutory limitations period of Minn.Stat. § 363.06, subd. 3. Richardson, 297 Minn. at 98, 210 N.W.2d at 916; Buchholz, 321 N.W.2d at 894.

In Richardson, the court interpreted the occurrence of the practice language of section 363.06, subd. 3 in connection with an allegation of sex discrimination against a school district based on the district’s policy of requiring all pregnant teachers to resign at the fifth month of pregnancy. The Commissioner of the Department of Human Rights filed a class action against the school district, and the limitations issue arose as the court defined the scope of the class. Richardson, 297 Minn. at 98, 210 N.W.2d at 916.

The court held:

We interpret the occurrence of the practice as set forth in this case to mean a discharge or required resignation, the date of which commences the statutory period of limitations. In addition, if a leave of absence were given, the statutory period would commence at the termination date of the leave of absence.

Id. Consequently, the court concluded that any person whose rights had been affected by the policy within six months of the date the Commissioner filed the action could be included in the class.

Nine years later, and one year after the Chardon case was decided by the United States Supreme Court, our supreme court reaffirmed the Richardson holding in Buchholz. There, the court stated:

We held in Richardson * * * that the date of the discharge commenced the running of the statutory period of limitations. We adhere to that decision, and find it dispositive.

Buchholz, 321 N.W.2d at 894. Although the factual circumstances of Buchholz differ from the facts of this case, the court’s statement is significant because it reveals continued allegiance to the date of discharge as the proper starting point for the statutory limitations period.

Notwithstanding the explicit holdings of these cases, IDS argues the Fitzgerald panel erroneously declined to follow Char-don because neither Richardson nor Buch-holz addressed the notice of discharge/discharge issue, and because our supreme court frequently looks to United States Supreme Court interpretations of Title VII for guidance when construing provisions of the MHRA. See, e.g., Sigurdson v. Isanti County, 448 N.W.2d 62, 67 (Minn.1989); Hubbard v. United Press International, Inc., 330 N.W.2d 428, 441 (Minn.1983); Danz v. Jones, 263 N.W.2d 395, 399 (Minn.1978). Therefore, IDS asks us to abandon Fitzgerald in favor of Chardon and Delaware State College v. Ricks, 449 U.S. 250, 101 S.Ct. 498, 66 L.Ed.2d 431 (1980).

To fully address IDS’s argument, we must examine the reasoning of Ricks and Chardon. Ricks was a claim of discriminatory denial of tenure by a black Liberian college professor under Title VII. The College’s Board of Trustees voted to deny Ricks tenure, and pursuant to its policy of offering junior faculty members one-year “terminal” contracts upon denial of tenure, offered Ricks a “terminal” contract on June 26, 1974. The contract expired on June 30, 1975. The issue before the Court was when the 180-day limitations period of Title VII started running on Ricks’s cause of action.

The Court held that the limitations period commenced when the final tenure decision was made and communicated to Ricks. Ricks, 449 U.S. at 259, 101 S.Ct. at 504. The Court rejected the claim that the limitations period started on the date the employment contract expired reasoning that the proper focus was on “the time of discriminatory acts, not upon the time at which the acts became most painful.” Id. at 258, 101 S.Ct. at 504 (quoting Abramson v. University of Hawaii, 594 F.2d 202, 209 (9th Cir.1979) (emphasis added)). Because “the only allegedly discriminatory act [was] the denial of tenure,” id. 449 U.S. at 258 n. 9, 101 S.Ct. at 504 n. 9, the Court held the limitations period started to run when Ricks was offered a “terminal” contract on June 26, 1974. At that point, Ricks had clearly been informed that he would be denied tenure. Therefore his Title VII claim was filed too late. Id. at 261-62, 101 S.Ct. at 505-06.

One year later, in Chardon, the Court extended the holding of Ricks to an employment discharge case. The Court held that the limitations period on claims of illegal discharge from employment started to run when employees received notice “that a final decision had been made to terminate their appointments.” Chardon, 454 U.S. at 8, 102 S.Ct. at 29. The Court reasoned:

The fact of termination is not itself an illegal act. * * * Here, respondents allege that the decision to terminate was made for solely political reasons, viola-tive of First Amendment rights. There were no other allegations * * * of illegal acts subsequent to the date on which the decisions to terminate were made.

The dissents in both Ricks and Chardon argued that the date of discharge was the proper date on which the limitations period should begin to run. Justice Stevens wrote:

The most sensible rule would provide that the date of discharge establishes the time when a cause of action accrues and the statute of limitations begins to run. Prior to that date, the allegedly wrongful act is subject to change; more importantly, the effective discharge date is the date which can normally be identified with the least difficulty or dispute.

Ricks, 449 U.S. at 265, 101 S.Ct. at 508 (Stevens, J., dissenting). Justice Brennan’s dissent in Chardon criticized the majority’s decision to extend the holding of Ricks to a discharge case. He stated:

It is one thing to hold, as was held in Delaware State College v. Ricks, * * * that for the purpose of computing the limitations period, a cause of action for denial of a benefit such as tenure, and consequent damage, accrues when the plaintiff learns that he has been denied that benefit; it is quite another to hold, as the Court does here, that a cause of action for damages resulting from an' unconstitutional termination of employment accrues when the plaintiff learns that he will be terminated.

Chardon, 454 U.S. at 9, 102 S.Ct. at 29 (Brennan, J., dissenting). Brennan predicted that the likely effect of the ruling

will be to increase the number of unripe and anticipatory lawsuits * * * lawsuits that should not be filed until some concrete harm has been suffered * * *.

IDS points out that since Ricks and Chardon were decided, federal courts have uniformly applied the notice rule in both Title VII² and age discrimination cases.³ IDS strongly asserts that we should adopt the reasoning of Ricks and Chardon, while respondent contends we should follow the explicit holdings of Richardson, Buchholz, and Fitzgerald.

We decline to extend the reasoning of Ricks to an employment discharge case as the Court did in Chardon. We are not bound to follow United States Supreme Court interpretations of Title VII when construing and applying the MHRA. As our supreme court stated:

[R]eliance on federal Title VII decisions as a guide at times does not necessarily mean that adherence to positions advanced in those decisions constrain this court as binding precedent in the interpretation of our state statute.

Carlson v. Independent School District No. 623, 392 N.W.2d 216, 220 (Minn.1986). For the following reasons, we reject IDS’s claim that the statutory limitation’s period of Minn.Stat. § 363.06, subd. 3 should begin to run on the date an employee receives notice of a future termination.

First, the plain language of the MHRA states that it is an unfair employment practice to discharge an employee based on impermissible considerations such as age or religion. Minn.Stat. § 363.03, subd. l(2)(b). Thus, when a claim of discriminatory discharge from employment is made, the most logical date on which to start the limitations period is the date of discharge. Until that date, no unfair employment practice within the meaning of Minn.Stat. § 363.03, subd. l(2)(b) has taken place. This situation is plainly distinguishable from an allegedly discriminatory denial of tenure, as in Ricks, or of some other employment benefit such as sick leave benefits. See Biltz v. Northwest Airlines, Inc., 363 N.W.2d 94 (Minn.App.1985).⁴ Once tenure or some other employment benefit has been discriminatorily withheld, the unfair employment practice is complete. See Minn. Stat. § 363.03, subd. l(2)(c). Although we acknowledge there may be overlap at times, it seems to us the cleanest way to handle a discharge situation is to find that for computing the time limitation to sue, the unfair practice is not simply the decision to terminate, but the implementation of that decision that results in an actual discharge. Therefore, we conclude that the occurrence of the practice language of Minn.Stat. § 363.06, subd. 3 refers to the actual discharge date not the date an employee receives notice of a future discharge. See Tuma v. Commissioner of Economic Security, 386 N.W.2d 702, 706 (Minn.1986) (court’s duty is to give effect to statute’s plain meaning where words are clear); see also Fitzgerald, 382 N.W.2d at 292 (declining to follow Chardon); Board of Education v. Ohio Civil Rights Commission, 66 Ohio St.2d 252, 421 N.E.2d 511 (1981) (Ohio Supreme Court refused to apply notice rule of Ricks in a claim of discriminatory nonrenewal of teaching contracts).

Second, the underlying purposes of the MHRA are best served by interpreting the “occurrence of the practice” language to refer to the date of discharge in this factual setting. One of the purposes of the MHRA is to prohibit employment discrimination. Minn.Stat. § 363.03, subd. 1. Individuals subjected to employment discrimination are entitled to bring civil actions for damages. The purpose of providing for such an action is “to place individuals discriminated against in the same position they would have been in had no discrimination occurred.” Brotherhood of Railway & Steamship Clerks, Freight Handlers, Express & Station Employees, Lodge 364 v. State, 303 Minn. 178, 195, 229 N.W.2d 3, 13 (1975). We must construe the provisions of the MHRA broadly to further its underlying purposes. Minn.Stat. § 363.11 (1986). The underlying purposes of the Act will be furthered if the statutory limitations period is construed in a manner that allows MHRA claimants, such as respondent, to have their actions determined on the merits. See Sorenson v. St. Paul Ramsey Medical Center, Inc., 457 N.W.2d 188, 192 n. 5 (Minn.1990) (recognizing importance of deciding cases on the merits). Adopting the date of discharge as the triggering event for the statute of limitations will have that result.

Third, the legislature has amended the MHRA since Fitzgerald held the limitations period of section 363.06, subd. 3 begins to run on the date of discharge without disturbing the Fitzgerald panel’s interpretation of the statute.⁵ IDS contends legislative inaction has no significance because the legislature always intended the “occurrence of the practice” language to be construed consistently with federal court interpretations of Title VIL We disagree. The legislature has not instructed state courts to adhere to federal court interpretations of Title VII when construing provisions of the MHRA even though the legislature has done so in other areas. Carlson, 392 N.W.2d at 220-21. Additionally, although the legislature has shown particular “sensitivity to judicial decisions that might affect application of the act,” id. at 221, the legislature has not demonstrated any disapproval of Fitzgerald.

Finally, adopting the date of discharge as the event which triggers the running of the statutory limitations period provides an easily discernable and logically defendable bright-line rule. Prior to the date of actual discharge, the impending allegedly wrongful act may, in fact, never take place and, because of any number of variables, there may be no damages. When the offending notice has merely been sent but nothing else has happened, you could have a change of mind by the employer, a satisfactory resolution between employee and employer over the problem, or possible negotiations between employer and employee leading to a mutually agreeable termination of employment.⁶ Adopting a notice rule will give rise to another substantial layer of litigation concerning “what constitutes notice.” Experienced litigators will sue over whether “the notice given” was clear and unequivocal, whether the person providing the notice had actual authority to discharge, whether it was merely a notice to terminate or a notice that “unless you make certain changes in your work practices you will then be terminated,” and so on ad infinitum. See Chardon, 454 U.S. at 9, 102 S.Ct. at 29 (Brennan, J., dissenting); Ricks, 449 U.S. at 265, 101 S.Ct. at 507 (Stevens, J., dissenting). Furthermore, the bright-line provided by adopting the date of discharge as the triggering event for the limitations period coincides with the express statutory language which makes it illegal to discharge an employee based on impermissible considerations. See Minn. Stat. § 363.03, subd. 1(2)(b).

IDS argues that our holding will undercut the protection the legislature provided employers by imposing a short limitations period on MHRA claims. The relatively brief limitations period is designed to “protect employers from the burden of defending claims arising from employment decisions that are long past.” Ricks, 449 U.S. at 256-57, 101 S.Ct. at 503. The legislature’s decision to impose a short limitations period reflects

a value judgment concerning the point at which the interests in favor of protecting valid claims are outweighed by the interests in prohibiting the prosecution of stale ones.

Id. at 260, 101 S.Ct. at 505 (quoting Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 463-64, 95 S.Ct. 1716, 1722, 44 L.Ed.2d 295 (1975)).

We are not persuaded by this argument. The facts of this case demonstrate that IDS has not been required to defend against a stale claim due to the interpretation of section 363.06, subd. 3 adopted in Fitzgerald. IDS notified respondent of his impending discharge on February 4, 1987. The discharge took effect on March 17, 1987. Respondent filed his MHRA claims on January 8, 1988, less than one year after notification and less than 300 days from the actual discharge date. IDS’s proposed construction of the statute would insulate it from liability for what it considers a meritless claim. The construction we give the statute today is consistent with the legislature’s expressed desire to have provisions of the MHRA construed liberally to further its underlying purposes.

Based on the foregoing, we hold that the “occurrence of the practice” language of section 363.06, subd. 3 refers to the date of discharge when the allegedly unfair employment practice is a discriminatory discharge. This strikes a proper balance between the interests of employers to be free of “stale claims” resulting from “long past” employment practices and the rights of employees to seek redress for allegedly discriminatory employment practices under our state human rights act. Accordingly, the trial court’s decision to deny IDS’s motion for summary judgment is affirmed.

DECISION

The trial court did not err by denying IDS’s motion for summary judgment on respondent’s MHRA claim.

Affirmed.

1 . The trial court certified the following question as important and doubtful:

In an employment discharge case, does the statute of limitations period contained in Minn.Stat. § 363.06, subd. 3 commence to run on the date of termination or the date of notice of termination?

2 . See Nazaire v. Trans World Airlines, Inc., 807 F.2d 1372 (7th Cir.1986), cert. denied, 481 U.S. 1039, 107 S.Ct. 1979, 95 L.Ed.2d 819 (1987); Shockley v. Vermont State Colleges, 793 F.2d 478 (2d Cir.1986) (timeliness measured from date claimant receives notice); Davis v. Sears, Roebuck and Co., 708 F.2d 862 (1st Cir.1983) (time begins to run on date of notice of discriminatory dismissal).

3 . See Wilson v. Westinghouse Electric Corp., 838 F.2d 286, 288 (8th Cir.1988) (limitations period commences when the plaintiff receives notice of a termination decision); Mull v. Arco Durethene Plastics, Inc., 784 F.2d 284, 288 (7th Cir.1986) (unequivocal notice of termination is required to start the limitations period running); Miller v. International Telephone and Telegraph Corp., 755 F.2d 20, 23-24 (2d Cir.1985), cert. denied, 474 U.S. 851, 106 S.Ct. 148, 88 L.Ed.2d 122 (1985) (limitations period commences when plaintiff receives definite notice of the termination); Price v. Litton Business Systems, Inc., 694 F.2d 963, 965 (4th Cir.1982) (limitations period runs from date employee is informed of the allegedly discriminatory employment decision).

4 .IDS also contends that the holding of Fitzgerald conflicts with the holding of Biltz. We disagree. Biltz involved a claim of allegedly discriminatory denial of sick leave benefits. A panel of this court affirmed the trial court’s ruling that the limitations period started running when the benefits were denied not when the employee was terminated. Biltz, 363 N.W.2d at 96-97. We see no conflict between the holdings of Fitzgerald and Biltz, Both cases focus on the discriminatory act as the point at which the statutory limitations period commences. Fitzgerald simply concludes that the discriminatory act in a discharge case is the actual discharge; Biltz holds that the discriminatory act in a denial of benefits case is the date the benefit is denied.

5 . See 1988 Minn. Laws ch. 660, § 6 (amending section 363.06, subd. 3 to lengthen limitations period from 300 days to one year); 1990 Minn. Laws ch. 567, § 8 (adding subdivision 3a to Minn.Stat. § 363.06 providing that first application of unfair discriminatory practice establishes basis for filing claim).

6 . Our decision will not prevent an employee from commencing an action upon receiving notice of an allegedly discriminatory discharge. We merely hold that the statute of limitations does not begin to run on the employee’s claim until the date of discharge. Employees will be free to seek injunctive relief prior to the date of discharge if they can convince a court of jurisdiction that temporary or permanent injunctive relief is appropriate.