From the 2016 PLUS Conference session “The eWorkplace: Exposures in the Digital Age,” Laura Lapidus of CNA joined us in the Media Zone to discuss evolving risks for employers and how carriers are responding.
Did you know that an agreement shortening the time within which to bring an employment law claim may be enforceable? Indeed, in Order of United Commercial Travelers of Am. v. Wolfe, 331 U.S. 586, 608, 67 S. Ct. 1355, 91 L. Ed. 1687 (1947), the Supreme Court stated with respect to contracts generally that “in the absence of a controlling statute to the contrary, a provision in a contract may validly limit, between the parties, the time for bringing an action … to a period less than that prescribed in the general statute of limitations, [if] the shorter period [is] a reasonable period.” This principle has been applied and enforced in the employment law context.
For example, recently in Njang v. Whitestone Grp., Inc., 2016 U.S. Dist. LEXIS 65370, 129 Fair Empl. Prac. Cas. (BNA) 362 (D.D.C. May 18, 2016), plaintiff filed an action alleging race discrimination in violation of both Section 1981 and Title VII. In its motion for summary judgment, the former employer argued that plaintiff’s claims — which were filed more than two years after the termination — were time barred because the employment contract required the employee “to file all claims or lawsuits in any way relating to employment with the Company no more than six months after the date of the employment action that is the subject of the claim or lawsuit.” Id. at *5.
The court held that the shorter limitation period was enforceable with respect to the Section 1981 claim but not with respect to the Title VII claim. With respect to the Section 1981 claim, the court relied on precedent in finding that “six months is a reasonable period of time . . . both because nothing within Section 1981 indicates that Congress intended for a longer window to bring such a claim, and also because the statute lacks other features that would make filing a claim within six months impracticable, such as an administrative exhaustion requirement.” Id. at *15.
By contrast, the court held that Title VII’s time-consuming administrative requirements, including (i) plaintiff’s need to first file a charge with the EEOC within 180 days after the alleged unlawful conduct, (ii) the EEOC’s investigation of the charge, and (iii) the EEOC’s issuance of a right to sue letter, make a 6-month limitation period unreasonable. Id. at **18-19. As the court in Njang explained, “merely by complying with the administrative exhaustion requirements of Title VII, plaintiffs are typically precluded from bringing their claims in court within six months of the challenged conduct, which means that a six-month limitations period has the practical effect of waiving employees’ substantive rights under Title VII.” Id. at *20.
As a practical matter, employers should consider implementing a clause in their employment contracts and employee handbooks reducing the statute of limitations to a shorter, yet still “reasonable” time. While 6 months might be too short a period – particularly given the administrative requirements of Title VII – a 1-year period might very well pass muster as a reasonable period of time.
In Hively v. Ivy Tech Cmty. Coll., 2016 U.S. App. LEXIS 13746, **54-56 (7th Cir. July 28, 2016), the Seventh Circuit affirmed the district court’s decision granting defendant’s motion to dismiss the plaintiff’s Title VII sexual orientation claim based on the doctrine of stare decisis – relying on the jurisdiction’s precedent determining that Title VII does not protect against same-sex discrimination. In doing so, however, the court made clear its reservations, noting the incongruity whereby a same-sex couple can marry legally in the United States on a Saturday and be fired on Monday for having done so. The court’s conclusion is instructive:
Perhaps the writing is on the wall. It seems unlikely that our society can continue to condone a legal structure in which employees can be fired, harassed, demeaned, singled out for undesirable tasks, paid lower wages, demoted, passed over for promotions, and otherwise discriminated against solely based on who they date, love, or marry. The agency tasked with enforcing Title VII does not condone it … many of the federal courts to consider the matter have stated that they do not condone it … and this court undoubtedly does not condone it…. But writing on the wall is not enough. Until the writing comes in the form of a Supreme Court opinion or new legislation, we must adhere to the writing of our prior precedent, and therefore, the decision of the district court is AFFIRMED.