Sixth Circuit Rules that Title VII’s Statute of Limitations Cannot be Contractually Shortened

The Sixth Circuit Court of Appeals issued in a recent published opinion in Logan v MGM Grand Detroit Casino that the statute of limitations of Title VII of the Civil Rights Act (“Title VII”) could not be contractually shortened by an employment agreement. As part of her job application, the plaintiff in in Logan agreed to a six-month limitation period to bring any lawsuit against the defendant employer. The plaintiff resigned after several years of work. More than seven months after her resignation, she filed a charge of discrimination complaint with the Equal Employment Opportunity Commission (“EEOC”) against her defendant employer, alleging sex discrimination and retaliation. The EEOC investigated the plaintiff’s allegations and issued a notice-to-sue letter almost a year after her resignation. Two months later, and more than 14 months after her resignation, the plaintiff sued defendant employer for discrimination under Title VII. Plaintiff’s lawsuit was filed outside of the time period agreed to by her employment agreement, but as plaintiff argued, was permissible within the time period under Title VII.

Under Title VII, which is the federal law on workplace anti-discrimination, a protected individual cannot file a lawsuit under the federal law without first bringing the dispute before the EEOC for resolution. In Michigan, the discrimination charge with the EEOC must be filed within 300 days of the occurrence of the alleged unlawful employment action. Upon receipt, the EEOC will investigate the allegations set forth in the discrimination complaint. Once the EEOC issues a right-to-sue letter after its investigation, which sets forth its determination of the investigation, the employee has 90 days to initiate a lawsuit against his or her employer. The Sixth Circuit recognized that the EEOC’s pre-suit role is to both to provide relief directly to an aggrieved employee as well as to mediate a dispute between the employer and his or her employer. The court explained that “[a]ny alterations to the statutory limitation period necessarily risk upsetting this delicate balance, removing the incentive of employers to cooperate with the EEOC, and encouraging litigation that gives short shrift to pre-suit investigation and potential resolution of disputes through the EEOC and analog state and local agencies.”

The Sixth Circuit ruled that a contractual provision that shortened the limitations period for bringing suits under Title VII was unenforceable. It found significant that any limitation periods governed by different states’ statutes of limitations would frustrate the uniform application and enforcement of Title VII. The court explained that such application of different states’ statutes of limitations “in turn would give rise to the anomalous result that similarly situated plaintiffs in different states would have different rights in the enforcement of wholly federal claims in federal courts.”

The Sixth Circuit, therefore, held that a contractually shortened limitation period was contrary to the substantive rights and Title VII’s pre-suit enforcement mechanisms. The Sixth Circuit reversed the lower court’s decision, finding that the plaintiff employee was entitled to a 300-day statutory limitations period.

Please feel free to contact a Keller Thoma attorney at (313) 965-7610 with any questions regarding the potential implications for you and your employees regarding this recent Sixth Circuit decision

Categories: Case Alerts, KT