Does your Florida business require applicants to limit their right to sue?
As part of a job application, an applicant agreed to a six-month limitation period to bring any lawsuit against her employer. After leaving the job, she sued her employer in federal court under Title VII, alleging employment discrimination. Her former employer asserted a statute of limitations defense: although the employee arguably brought her claim within the statutory period required by Title VII, she waited longer than the limitation period provided in her employment application. The district court agreed and granted summary judgment to the employer.
The employee appealed and argued that the contractual limitation period cannot supersede the statutory limitation period for bringing suit under Title VII. The appellate Court agreed with the employee and reversed the decision of the district court. Logan v. MGM Grand Detroit Casino, 939 F.3d 824 (6th Cir. 2019). Although this decision is not controlling in Florida, Florida business owners can still take guidance from this case.
The court explained that the limitation period of Title VII is part of an elaborate pre-suit process that must be followed before any litigation may commence. A business that attempts to alter this this process by contract “abrogates substantive rights and contravenes Congress’s uniform nationwide legal regime for Title VII lawsuits.”
The appellate court explained that in the Fair Labor Standards Act (FLSA) and Equal Pay Act (EPA) contexts, contractual limitation periods have also been prohibited. The FLSA requires employers to pay a minimum wage and overtime to certain employees, while the EPA forbids employers from salary discrimination on the basis of sex. Congress established that the limitation period for an FLSA claim would be two years, unless there was a “willful violation,” in which case the limitation period would be three years. Because the EPA was an amendment to the FLSA, the FLSA limitation period also applies to EPA claims.
In this specific case, the employee sought to enforce her rights under Title VII. Her employment application contained an agreement that purported to undercut those rights. However, the appellate court concluded that this would be prospectively detrimental to her substantive rights under federal law and would frustrate the uniform application of Title VII. Therefore the appellate court held that contractual clauses that purport to shorten the limitation period of Title VII to bring suit are not enforceable.
Florida business owners should take from this decision that they may need to have an experienced labor & employment lawyer review waivers that they ask employees to sign. Sometimes businesses in Florida may have a business lawyer or an in-house counsel who drafts or creates documents for applicants and employees to sign. This case demonstrates the danger that a business may encounter if they rely on a waiver drafted by a non-employment lawyer. There are aspects of employment law of which general business lawyers are unaware.