Thursday, September 26, 2019

6th Circuit holds that an employee cannot contractually shorten Title VII’s statute of limitations

In Thurman v. Daimler Chrysler, the 6th Circuit agreed that the following agreement between an employer and an employee shortening the time in which an employee has to file a lawsuit was lawful.

READ CAREFULLY BEFORE SIGNING I agree that any claim or lawsuit relating to my service with Chrysler Corporation or any of its subsidiaries must be filed no more than six (6) months after the date of the employment action that is the subject of the claim or lawsuit. I waive any statute of limitations to the contrary.

I’ve long argued that because of Thurman, employers should consider having all employees agree to a shortened statute of limitations to limit the duration of their potential exposure to employment claims. Yesterday, however, the same court punched big hole in this litigation avoidance strategy.

In Logan v. MGM Grand Detroit Casino, the 6th Circuit considered the following language to which Barbie Logan agreed when she applied for her job as a culinary utility worker at the casino.

I agree that any claim or lawsuit arising out of my employment with, or my application for employment with, MGM Grand or any of its subsidiaries must be filed no more than six (6) months after the date of the employment action that is the subject of the claim or lawsuit. While I understand that the statute of limitations for claims arising out of an employment action may be longer than six (6) months, I agree to be bound by the six (6) month period of limitations set forth herein, and I WAIVE ANY STATUTE OF LIMITATIONS TO THE CONTRARY.

After several years of employment, she resigned. 216 days post-resignation she filed a charge of discrimination with the EEOC.

The 6th Circuit concluded that the six-month statute of limitations to which Logan had agreed did not impact her right to file a charge of discrimination with the EEOC outside of that six-month period (but before the expiration of the EEOC’s own 300-day statute of limitations).

The 300-day limitation period to sue under Title VII is a substantive, rather than procedural, rule. And because it  is clear that there can be no prospective waiver of an employee’s rights under Title VII, it naturally follows that the limitation period of this statute is not prospectively waivable as it pertains to litigation. (internal citations and quotations omitted.)

Despite Logan, I do not think that employers should stop requiring that employees sign these type of agreements. Instead, employers should simply modify them to make clear that they do not apply to the filing of federal civil rights charges with the EEOC, and that the EEOC’s statute of limitations for charge filing, if longer, controls. These agreements still serve an important purpose, particularly in a state like Ohio, which has a six year statute of limitations for filing a private cause of action under the state’s employment discrimination statute.

Logan damages an employer on this issue, but the blow is nowhere near lethal.

* Photo by Estée Janssens on Unsplash