As an employer, you may be able to shorten the
length of time in which you can be sued, and it's as simple as
amending your employment application. (Results may vary, depending
on your jurisdiction.)
The U.S. Court of Appeals for the 6th Circuit
(Kentucky, Michigan, Ohio, and Tennessee) recently held that a
six-month limitations period in an employment application barred a
lawsuit by an employee who had filed suit within the statutory
limitations period but more than six months after her claims
accrued.
In effect, the employer in this case managed to
shorten the statute of limitations from three years to six months.
Thurman v. DaimlerChrysler
Connie Thurman began working for DaimlerChrysler (then Chrysler
Corp.) in 1994 at a facility in Michigan. Before beginning her
employment, she signed an application that contained a clause
waiving the statute of limitations and agreeing to an abbreviated
limitations period in which to file suit against the employer. The
clause stated as follows:
"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."
In October 1999, Thurman alleged she was sexually harassed by a
co-worker. Thurman was given a transfer to another shift in January
2000. She took a leave of absence in February 2000 and never
returned to work.
On June 1, 2000, Thurman and her husband sued DaimlerChrysler,
asserting claims of sex and race discrimination under state and
federal law and negligent hiring/retention, negligent supervision,
assault and battery, and loss of consortium. On Dec. 15, 2000, the
first lawsuit was dismissed because the Thurmans' counsel repeatedly
failed to appear and participate in court-ordered conferences. In
August 2001, about 22 months after the last incident of sexual
harassment had allegedly occurred, the Thurmans filed a second
lawsuit containing the same claims.
The district court enforced the six-month limitations period in
the employment application, dismissing the second lawsuit as
untimely. The 6th Circuit upheld the district court.
The Thurmans claimed the employment application was unenforceable
because it was an unconscionable contract of adhesion (in other
words, they argued that Thurman really had no choice but to sign the
application). However, under Michigan law, contracts with terms that
are reasonable are not considered contracts of adhesion. The 6th
Circuit found that the six-month limitations clause was reasonable
and therefore enforceable.
As already stated, your results may vary. Courts in some states -
including California - have upheld clauses like the one used by
DaimlerChrysler. In other states, such a clause might be found to be
an unconscionable contract of adhesion. Determining whether you can
shorten your limitations periods will require an analysis of the law
in the states in which you have employees.
But a state-by-state look might be a good investment. Some
statutes of limitations are quite long. For example, the limitations
period for race discrimination claims under 42 U.S.C. § 1981 is four
years.
Most state wrongful discharge claims have three-year statutes of
limitations. Shortening those periods to six months - if possible -
could be well worth an employer's while.
