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Employers Cannot Shorten Title VII Statute of Limitation through Contract
Under new Sixth Circuit precedent, employers cannot shorten the statute of limitations period for Title VII actions by contracting with their employees for a shorter limitations period. Logan v MGM Grand Detroit Casino, 939 F3d 824 (CA 6 2019)
In Logan, Barbrie Logan agreed, as a condition of her employment with MGM Grand Detroit Casino, to file any claim she had against the casino within six months of the underlying incident giving rise to the claim. As a part of this condition, she specifically waived any limitations period longer than six months.
Logan filed an EEOC charge 216 days after she resigned, alleging that she had suffered sex discrimination and retaliation in violation of Title VII. The EEOC issued a right-to-sue notice, and she sued MGM in federal district court approximately three months later—440 days after resigning. The casino moved to dismiss the case, arguing that Logan’s contractual six-month statute of limitations barred both the EEOC charge and her lawsuit.
Under Title VII, Michigan is a “deferral state,” meaning that the EEOC has a work-sharing agreement with the Michigan Department of Civil Rights for investigating and enforcing Title VII actions. In deferral states, an employee has 300 days from the date of the alleged wrong to: (1) begin proceedings with the state agency and also file a charge with the EEOC; or (2) file with the EEOC, who may refer the charge to the state agency. Upon receipt of the charge, the EEOC will investigate. If the EEOC issues a right-to-sue notice, the employee has 90 days to file suit.
Finding contractual limitations periods inapplicable to Title VII claims, the Sixth Circuit ruled that Logan’s complaint was timely, because she filed her EEOC claim within the required 300-day limitations period. In its determination, the court relied on U.S. Supreme Court precedent holding that substantive employment rights granted by statute cannot be contractually waived. Because Title VII specifically provides for a 300-day statute of limitations, the Sixth Circuit concluded that the limitations period is a substantive right that cannot be waived pursuant to contract. The court also noted that allowing contractual limitations on Title VII actions may deter employers from timely cooperating with the EEOC and encourage “litigation that gives short shrift to pre-suit investigation and potential resolution of disputes.”
Although many contracts, policies, and handbooks have language that shorten statute of limitation periods, under this new precedent, these provisions will not be enforceable for Title VII claims.