Time for Bringing DFEH Claims Is Tolled When Employees Choose an Employer’s Internal Complaint Process First

Winter 2008Newsletters California Update - Employment Law

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A recent California Supreme Court decision gives employees more time to file a Fair Employment and Housing Act (FEHA) claim when the employee first elects to utilize a company's own internal complaint process. The employee in the case first filed a formal complaint letter with her employer in October 2001 claiming that she was the victim of racial discrimination. The employer informed the employee of her right to file a complaint with the California Department of Fair Employment and Housing (DFEH) at any time. After an internal investigation, the employer found no evidence of discrimination.The employee appealed the finding through the employer's internal appeals process, but her allegations were ultimately found to be unsubstantiated.

In October of 2002, almost two years after the alleged discrimination took place, but while the internal review process was still ongoing, the employee filed a claim with the DFEH. The DFEH issued the employee a right-to-sue letter, and one year later she brought a discrimination claim in state court.The employer argued that the employee's time to bring the case had expired. The case eventually reached the state Supreme Court. The Supreme Court applied the principle of "equitable tolling" to stop the clock on the one-year statute of limitations for filing a claim with the DFEH when an employee utilizes an employer's internal complaint process. Equitable tolling is a judicially created doctrine that prevents the statute of limitations from running. Equitable tolling is automatic when exhaustion of an administrative remedy is mandatory, but with this decision it will apply even when an employee is informed of his or her right to file a DFEH claim and voluntarily chooses to follow informal grievance procedures instead.

Employers are encouraged to accurately document all steps used to resolve internal complaints and to communicate the actions taken to the relevant employees. Despite the legislative intent to prohibit FEHA claims from popping up years after the fact, employers must now be aware that these types of claims can still be brought after extensive and long term in-house review.

McDonald v. Antelope Valley Cmty. Coll. Dist., Cal., No. S153964, 10/17.08