You Snooze You Sometimes Lose: Court Enforces 6 Month Statute of Limitations with Respect to Section 1981 Claim But Not with Respect to Title VII Claim

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.

Viability of Sexual Orientation Discrimination Claims: Venue Driven?

This is the first post by PLUS Blog contributor Jonathan Evan Goldberg, a litigation and employment law partner at FisherBroyles, LLP. An experienced trial lawyer and frequent public speaker, he has represented corporations, LLCs, partnerships, non-profits, law firms, and boards of directors, as well as officers, executives, attorneys, and others, in all aspects of complex commercial litigation, employment litigation, arbitration, and employment law.

In addition, Mr. Goldberg serves as the President of the non-profit Cherub Improv and regularly teaches lawyers, entrepreneurs, corporate leaders, and members of the professional liability industry the basic principles of improv comedy, including teamwork, embracing creativity, listening, supporting others’ ideas, feeling confident, and thinking quickly on one’s feet.

More often than not, the choice of forum matters.  In a recent decision out of the Fourth Circuit, Hinton v. Virginia Union University, 2016 U.S. Dist. LEXIS 60487 (E.D. Va. May 4, 2016), the United States District Court for the Eastern District of Virginia granted the Defendant University’s motion to dismiss the Plaintiff’s claim for discrimination in large part because, the Court held, “sexual orientation” is not a protected class under Title VII.  Unfortunately for the Plaintiff, Virginia state law also does not prohibit “sexual orientation” discrimination and, thus, he could not plead a state law violation.

A different result would likely have occurred had the Plaintiff worked and/or suffered the alleged discrimination in New York.  Although the Second Circuit also does not recognize “sexual orientation” as a protected class under Title VII, the New York City Human Rights Law (NYCHRL) explicitly prohibits discrimination and retaliation based on sexual orientation.  See NYCHRL, Admin. Code § 8-107.  Indeed, in Roberts v UPS, 115 F. Supp. 3d 344 (E.D.N.Y. 2015), Judge Weinstein of the Eastern District of New York upheld the jury’s determination that UPS was liable under the NYCHRL for creating a hostile work environment and for retaliation based on the lesbian Plaintiff’s sexual orientation.  In so doing, the Court upheld the jury’s award of $100,000 (compensatory and punitive damages combined), 115 F. Supp. 3d at *3, and very recently granted an additional award of $150,000 for attorneys’ fees and costs.  Roberts v. UPS, 2016 U.S. Dist. LEXIS 48040, *1, 2016 WL 1441318 (E.D.N.Y. April 6, 2016).

Faced with the reality that a particular venue will be better for one of the parties in these types of cases, companies should take the time to revisit the dispute resolution, forum selection, and choice of law clauses contained in their employee handbooks and employment and independent contractor agreements.

Even more importantly, companies should consider implementing anti-harassment and anti-retaliation workplace training, a low cost measure designed to nurture a supportive work environment and preempt such claims in the first place.

The PLUS Midwest Chapter is hosting an educational event, Gender Identity Issues – Changing Ideas, Changing the Workplace, on September 14 in Chicago. Don’t miss it!

Is Private/Non-Profit D&O Coverage Under Priced?

From the 2015 PLUS D&O Symposium session “Who Me? I Didn’t Do Anything…Wrong,” moderator Jeff Lattmann (Beecher Carlson) and panelists Liz Olsson, RPLU (Wells Fargo Insurance) and Shelley Norman (AIG) discuss the differences in premium increases between private and non-profit D&O clients.

PLUS members can view this entire Conference session in the PLUS Multimedia Library.