Will a Shortened Statute of Limitations Provision Save the Day? Maybe
Posted by chapteradmin on Apr. 5, 2023 / Legal Updates / Subscribe 0
By: Carol G. Schley, Clark Hill PLC
A recent Michigan Court of Appeals decision is a reminder that shortened statute of limitations provisions can be extremely helpful to employers in defeating lawsuits filed by employees. However, it is also a reminder that the helpfulness of such provisions is entirely dependent on the type of claims asserted by the employee.
In French v. MidMichigan Medical Center-Gladwin, the plaintiff started employment in 2012 with MidMichigan Physicians Group, a subsidiary of MidMichigan Health (“MMH”). As part of the hiring process, plaintiff signed an application that contained a provision stating that any lawsuit she may file against “MidMichigan Health and/or its agents” would be filed within “180 days of the event(s) giving rise to the claim or… the time limit specified by statute, whichever is shorter.” In 2014, plaintiff transferred to the defendant hospital, which also was a subsidiary of MMH.
In 2019, plaintiff’s employment was terminated. Twenty months later, she filed a discrimination lawsuit against the defendant hospital under the Michigan Elliott-Larsen Civil Rights Act (“ELCRA”). The defendant hospital moved for summary disposition of her lawsuit, asserting that it was filed too late per the shortened statute of limitations provision in the original application. Among other arguments, Plaintiff asserted that the shortened statute of limitations provision violated public policy and was unenforceable.
The Court of Appeals disagreed with plaintiff’s argument, finding that shortened statute of limitations provisions, like that contained in the application, were enforceable under Michigan law. Quoting a previous decision of the Michigan Court of Appeals, the Court stated, “[b]ecause there are no statutes explicitly prohibiting the contractual modification of limitations periods in the employment context, the contract is not contrary to law.” The Court further noted, “one who signs a contract will not be heard to say, when enforcement is sought, that he did not read it, or that he supposed it was different in its terms.” Accordingly, the Court held that plaintiff filed her lawsuit too late, and summary disposition in favor of the defendant hospital was appropriate.
The French case is the most recent example of Michigan courts upholding shortened statute of limitations provisions in the employment context. Therefore, employers should consider including such provisions in their employment applications, handbook acknowledgements, and other employment-related agreements. However, despite their validity under Michigan law, there is no guarantee such provisions will be enforced in all instances. This is because federal courts have held that shortened statute of limitations provisions are unenforceable with respect to claims asserted by employees under the federal statutory counterparts to ELCRA, including Title VII and the Age Discrimination in Employment Act. Therefore, depending on the type of claims an employee asserts against their employer, a shortened statute of limitations provision may be an effective tool to have the claims dismissed, or be deemed unenforceable.
It is recommended that employers ask legal counsel to review any shortened statute of limitations provision they use or intend to use in their documentation, to ensure it encompasses all applicable claims and has the best change of surviving judicial scrutiny.
Carol G. Schley is a member of the Detroit SHRM Legal Affairs Committee and an attorney at the law firm Clark Hill PLC. She can be reached at [email protected] or (248) 530-6338.
Detroit SHRM encourages members to share these articles with others, inside and outside their organization, as long as its name and logo, and the author’s information, is included in the re-post of the article. April 2023
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