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Be careful what you promise: You may extend employee’s time to sue

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in Discrimination and Harassment,HR Management,Human Resources

The Minnesota Human Rights Act (MHRA) protects employees from discrimination, but requires them to file their claims within one year of the discriminatory act. But an employee who believes she has a claim and waits to file may sometimes gain extra time—if the discriminating entity promises to investigate and resolve the complaint.

Here’s how it could happen. A company promises to look into a complaint and resolve it soon. The other party, relying on that promise to its detriment, decides to postpone filing a lawsuit. Then, when time has run out, the company says the other party waited too long. Under the right set of facts, the employee could establish a case of promissory estoppel—the legal claim arising from a situation in which someone alters his or her course of action based on another party’s promise, and the other party fails to follow through.

Recent case: Robin Gamradt owns Taxi Connection and had an oral contract with Dakota, Minnesota & Eastern Railroad Corp. (DM&E) to provide taxi services. When one of the female taxi drivers complained that she was constantly called a vulgar name by a DM&E employee, she complained to Gamradt, who in turn complained to DM&E’s HR department, alleging gender discrimination.

DM&E then terminated Gamradt’s contract. She tried many times to resume the contract, but was rebuffed.

Meanwhile, the HR department had told Gamradt it would resolve the discrimination complaint within two weeks. More than a year passed, and Gamradt filed suit under the MHRA, alleging business reprisal and gender discrimination. DM&E said she had waited too long.

But Gamradt said she had relied on DM&E’s promise to resolve the gender discrimination claim, and therefore should be allowed to file the lawsuit late.

The 8th Circuit Court rejected her claim because the promise did not sufficiently harm Gamradt. At most, it would have given her an extra two weeks to sue. (Taxi Connection and Gamradt v. DM&E, No. 06-3510, 8th Cir., 2008)

Final note: Under Minnesota law, a party trying to use promissory estoppel must prove that:

  • The other party made a clear and definite promise
  • The other party intended to induce the first party to rely on the promise
  • The first party did rely on the promise to its detriment
  • Enforcing the promise is necessary to prevent injustice.

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