Thursday, May 17, 2012

6s wild! 6th Circuit affirms contractual 6 month limitation for employment claims

Between the following two options—a federal statute or a private employment agreement—which wins?

  • The federal statute (USERRA), which, at the time, provided for a four-year statute of limitations, and which states that it “supersedes any … contract, agreement, … or other matter that reduces, limits, or eliminates in any manner any right or benefit provided by this chapter.”


  • The employment agreement, which provides, “I … agree that any action, claim or suit against [Defendant] arising out of my application for employment, employment, or termination including, but not limited to, claims arising under State or Federal civil rights statutes must be brought within one hundred and eighty (180) days of the event giving rise to the claim or be forever barred. I waive any and all limitation periods to the contrary.”

In Oswald v. BAE Industries (5/16/12) [pdf], the 6th Circuit ruled that the contract trumped USERRA.

After returning from serving with the Marines in Iraq, Jerome Oswald claimed that BAE limited his duties and responsibilities compared to his pre-deployment work, failed to give him a raise, transferred him to a lesser position, and ultimately fired him.

Unfortunately for Oswald, he waited until almost three years after his termination to file suit against BAE. The 6th Circuit concluded that his feet-dragging doomed his lawsuit:

Plaintiff’s employment contract does not eliminate all procedural rights in that it only shortens the time frame that Plaintiff can raise a USERRA claim. Because the contractual period of limitations diminished a right under USERRA that was merely procedural, [it] does not override the contractual limitations period on that basis….

Because Plaintiff’s complaint was untimely under the 180-day period in the contract, the district court did not err in granting summary judgment to Defendant….

There are two key takeaways from this case:

  1. This case might no longer good law under USERRA. In 2008, the Veterans’ Benefits Improvement Act provided that there “shall be no limit on the period for filing the complaint or claim” under USERRA. If there cannot exist any “limit on the period for filing,” it is unlikely that a contract can impose such a bar.
  2. Even if employers no longer can shorten the statutory period to file a claim under USERRA, this case serves as a good reminder that employers can use contractual provisions to shorten the statutory period for host of other claims. In a state like Ohio, which has a six-year limitations period for all discrimination claims except age, the ability to significantly shorten the filing period is a powerful weapon that too few employers deploy.