• California Supreme Court Holds That Employees Who Use Internal Grievance Procedures Have Extra Time to File FEHA Claims
  • December 2, 2008 | Authors: Justin Johnson; Esra A. Hudson
  • Law Firm: Manatt, Phelps & Phillips, LLP - Los Angeles Office
  • On Monday, October 27, 2008, the California Supreme Court unanimously ruled that the statute of limitations to file a complaint under the California Fair Employment and Housing Act (the “FEHA”) is extended for employees who voluntarily pursue internal administrative remedies prior to filing the complaint. McDonald et al. v. Antelope Valley Comm. College Dist.

    The McDonald Case Impact on FEHA Claims

    Under the FEHA, an employee who believes he/she was discriminated against is required to file an administrative complaint with the Department of Fair Employment and Housing (“DFEH”) prior to bringing suit in court. The FEHA establishes a one-year statute of limitations period, meaning that the administrative complaint must be filed within one year from the date upon which the alleged discriminatory practice occurred.

    The McDonald opinion effectively stops this one-year period while an employee is pursuing a claim through internal grievance procedures established by the employer. In other words, the statute of limitations period does not run during the internal grievance process – effectively extending the statute of limitations.

    The McDonald Case Background

    In McDonald, the plaintiff alleged that in January 2001 her employer discriminated against her based on her race by not considering her for a job opening, despite the fact that she met the minimum qualifications. Pursuant to internal grievance procedures, the plaintiff filed a formal complaint of discrimination with her employer in October 2001. In May 2003, after numerous internal appeals, the internal grievance process ended with a determination that there was no discriminatory conduct.

    In October 2002 – prior to the internal grievance process ending, but more than one year after the alleged discriminatory conduct occurred – the plaintiff filed an administrative complaint with the DFEH.  After being issued a “right to sue letter” by the DFEH, an administrative prerequisite to filing a lawsuit, the plaintiff filed suit in superior court against her employer in October 2003.

    The trial court dismissed plaintiff’s claim, finding that it was barred by the statute of limitations, a decision later overruled by a California Court of Appeal. Following the reasoning of the appellate court, the California Supreme Court held that the doctrine of “equitable tolling” applies to the pursuit of internal administrative remedies prior to filing a FEHA claim. Equitable tolling is a judicially created doctrine that extends a statute of limitations when necessary to ensure practicality and fairness. Generally, it applies when an injured person has several legal remedies, and reasonably and in good faith, pursues one. In the McDonald case, the Court applied the doctrine, effectively “freezing” the statute of limitations clock during the entire time the plaintiff was pursuing the internal grievance procedures of her employer. Thus, the Court ruled that her claim was timely, despite the fact that she did not file a complaint with the DFEH until more than a year and a half after the alleged conduct occurred.

    What the McDonald Case Means for Employers

    FEHA claims that are initiated more than one year after the discriminatory conduct occurred – previously thought to be time barred – may still yet be ripe for a lawsuit if the employee pursued internal grievance procedures. If you have internal grievance procedures and are concerned about the impact the McDonald case may have on your company, we recommend that you contact counsel for guidance.