A “statute of limitations” is a law that sets a deadline for filing a lawsuit. For example, if you’re bringing a personal injury case, depending on your state, you have a certain number of years after the date of the incident to bring your case.
A lot of employers try to guard against the risk of lawsuits by having their workers sign contracts under which, should they decide to try and bring the employer to court over an alleged wrong in the workplace, they have a much shorter time to bring the case than the law would otherwise provide.
If you’re thinking of implementing such contracts, talk to an employment lawyer first, because it might not protect you the way you expect.
This happened recently in Michigan. Barbrie Logan applied for a job as a cook at the MGM Grand Casino in Detroit and, as part of the application, agreed to a six-month limitation period for any lawsuit arising from her employment that she might potentially file.
Ultimately, she left her job and sued the MGM Grand for sex discrimination in federal court under Title VII of the Civil Rights Act.
She didn’t file her suit within six months of the alleged discrimination, and the employer got the case thrown out, pointing to the limitation period in her employment application.
But Logan appealed the case, arguing that the reduced limitation period was unenforceable in Title VII cases. A federal appeals court agreed with her and ordered that her suit be reinstated.
Specifically, the court said that the 300-day statute of limitations in the federal law is a “substantive right” granted by Congress that cannot be shortened by contract ahead of time.
There may be other situations where this type of contract is void too. Talk to an attorney to learn more.