Labor & Employment Law Daily Title VII limitations period can’t be contractually shortened, says Sixth Circuit
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Monday, September 30, 2019

Title VII limitations period can’t be contractually shortened, says Sixth Circuit

By Harold S. Berman J.D.

Addressing a matter of first impression, the appeals court held, in a sex discrimination suit brought by a former MGM Grand Detroit employee, that employers cannot shorten Title VII’s limitations period by contract.

A former MGM Grand Detroit employee who sued the casino for sex discrimination was entitled to the full statute of limitations provided by Title VII, and was not barred from bringing suit under the shorter limitations period contained in her employment agreement, the Sixth Circuit ruled, in a case of first impression. The appeals court reversed the grant of summary judgment in favor of the casino on timeliness grounds, finding that Title VII’s express statute of limitations was a substantive right that could not be bargained away. Permitting contractual limitations periods to trump Title VII would interfere with Title VII’s pre-suit process and diminish Congress’ intended national application of the statute. The EEOC had weighed in as amicus here, in support of the plaintiff (Logan v. MGM Grand Detroit Casino, September 25, 2019, Bush, J.).

Title VII suit. The employee worked as a cook for an MGM casino. As part of her job application, she had agreed to abide by a six-month limitation period for bringing any lawsuit against the casino, and specifically waived any other applicable statutes of limitation. She resigned in December 2014, alleging she was constructively discharged due to sex discrimination and retaliation.

She filed her EEOC charge 216 days after quitting. She brought her Title VII suit in federal court in February 2016, 440 days after resigning. The casino moved for summary judgment, maintaining that her employment agreement required her to bring a complaint within six months, and consequently, her suit was untimely. The district court agreed and granted summary judgment for the casino.

Limitations period cannot be waived. The Sixth Circuit reversed, holding that Title VII’s limitation period was part of a pre-suit process that must be followed before litigation could ensue, and that contractually altering the Title VII process would deny substantive rights and conflict with Congress’ uniform nationwide process for Title VII lawsuits.

Title VII uniquely provided a process where an employee was required to first bring claims to the EEOC for redress before initiating a lawsuit. This procedure, established by Congress, afforded the EEOC the opportunity to first investigate discrimination claims and encourage voluntary compliance with Title VII. Any change to the mandated statutory limitation period for filing with the EEOC and bringing suit threatened to alter the intent of the process by removing the incentive for employers to cooperate with the EEOC, and promoting litigation without first engaging in pre-suit investigation and potential resolution. Title VII contained its own limitations period mandated by Congress, which was considered a substantive right that generally could not be waived in advance by an employee.

Title VII’s uniform national scope. Additionally, the pre-suit procedures detailed in Title VII were intended to have a national scope and provide for uniform enforcement of Title VII’s policies and objectives. The employee’s purported abrogation of her Title VII rights in her employment application would diminish her substantive rights under federal law, and prevent the uniform application of Title VII. Consequently, contractual clauses that attempted to shorten Title VII’s limitation period were not enforceable.

If the casino’s contractual statute of limitations provision were to trump Title VII’s statutory limitations period, courts would need to rely on state-law contract principles to determine whether an employee’s Title VII action was timely. Various state courts, adopting their own state’s principles, would likely come to different conclusions as to whether contractual limitations periods were enforceable. In this scenario, similarly situated employees in different states would obtain different rights in enforcing exclusively federal claims, which would obstruct the implementation of Title VII’s national policies, and sideline Title VII’s multi-step enforcement procedure.

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