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CONTRACTS 5: Trial court concluded shortened period of limitations on claims was enforceable.

Plaintiff initially filed suit in federal district court, raising a federal claim under the Family and Medical Leave Act (FMLA).  The federal court dismissed plaintiff’s FMLA claim on its merits and declined to exercise pendant jurisdiction over the state law claim. Plaintiff then filed the instant action on her state law claim in Circuit Court. Defendant moved for summary disposition, arguing that her filing was untimely under a contractual provision that required all claims arising out of her employment be filed within 180 days.

The application for employment filed by plaintiff in 2007 included the following provision:

Limitations on Claims. I agree that any lawsuit against the Company and/or its agents arising out of my employment or termination of employment, including but not limited to claims arising under State or Federal civil rights statutes, must be brought within the following time limits or be forever barred: (a) for lawsuits requiring a Notice of Right to Sue from the EEOC, within 90 days after the EEOC issues that Notice, or (b) for all other lawsuits, within (i) 180 days of the event(s) giving rise to the claim or (ii) the time limit specified by statutes, whichever is shorter. I waive any statute of limitations that exceeds this time limit.

Plaintiff filed her federal lawsuit on May 2016, 185 days after her discharge. She did not file her complaint in circuit court until December 2017, 756 days after her discharge (and 36 days after the dismissal of the federal lawsuit).

The trial court concluded that the agreement for a shortened period of limitations was enforceable and determined that the suit was untimely.

Although plaintiff acknowledges that Michigan law permits parties to agree to a shortened period of limitations, plaintiff argues that there was not an enforceable contract in this case because of a lack of mutuality of obligation and consideration. The essence of plaintiff’s argument is that the Limitations on Claims clause appeared in the application for employment and not in an employment contract and the application is not itself a contract. This argument was rejected by the court.

The Court previously has recognized that the terms of an employment application constituted part of an employee’s and employer’s contract of employment.

If you are a business owner facing litigation, obtaining the right legal representation is essential.

At Aldrich Legal Services, you will work with an attorney who has the extensive litigation experience necessary to help you reach an effective resolution that protects your interests.

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