Minnesota Statute § 541.05 Applies to Whistleblower Actions

On December 15, 2014, the Minnesota Court of Appeals held that the six-year statute of limitations pursuant to Minn. Stat. § 541.05, subd. 1(2) a>applies whistleblower actions. This ruling came from Ford v. Minnesota Public Schools, — N.W.2d —, (Minn. Ct. App. 2014).

In Ford, Yvette Ford was an employee of Minneapolis Public Schools in 2007. In the summer of that year, Ford told the school district superintendent and another staff person that she had found “financial improprieties and budget discrepancies” in the school’s budget. A few months later, on April 22, 2008, Ford was told that her job was to be eliminated and her last day of work would be June 30, 2008. Ford brought a cause of action on June 29, 2010, asserting, among other things, that Minnesota Public Schools had violated Minnesota Statute §181.932, which provides whistleblower protection.

The statute states, in relevant part,

An employer shall not discharge, discipline, threaten, otherwise discriminate against, or penalize an employee regarding the employee’s compensation, terms, conditions, location, or privileges of employment because:

(1) the employee, or a person acting on behalf of an employee, in good faith, reports a violation, suspected violation, or planned violation of any federal or state law or common law or rule adopted pursuant to law to an employer or to any governmental body or law enforcement official.

Minn. Stat. § 181.932. After Ford’s federal claims were dismissed in the case was moved to state District Court, the District Court granted summary judgment in favor of the school holding that two-year statute of limitations applied to Ford’s whistleblower claim, and therefore the whistleblower claims expired on April 21, 2008, when Ford found out her job was being eliminated. The Court of Appeals affirmed. However, the Supreme Court’s reversed and remanded the case to the Court of Appeals “solely for the purpose of reconsideration of the statute of limitations.”

On remand, the Court of Appeals examined Minn. Stat. § 541.05, subd. 1(2) which gives a six-year statute of limitations for actions “upon a liability created by statute, other than those arising upon a penalty or forfeiture or where a shorter period is provided by section 541.07.” The question then for the Court of Appeals was whether Ford’s claim “existed at common law and was later recognized by statute [then] the two-year limitations period applies….[or] if liability was created by statute, the six-year limitations period applies.” After an analysis of the history of § 181.932 and the case Phipps v. Clark Oil & Ref. Corp., 408 N.W.2d 569, the Court of Appeals concluded that prior to a recognition of whistleblower claims at common law, the claim was in fact created by statute. Thus, the six-year statute of limitations applies.