In an important decision for employers, the Ohio Sixth District Court of Appeals recently upheld an employer’s use of a statute of limitations waiver. In enforcing the waiver, the Court of Appeals affirmed an order granting summary judgment in favor of an employer in a lawsuit asserting claims for disability discrimination, wrongful termination, failure to provide a reasonable accommodation and intentional infliction of emotional distress on the basis that the lawsuit was filed outside the agreed-upon limitations period set forth in the plaintiff’s employment application. The employment application, which had been electronically signed by the plaintiff, stated:
In consideration of the review of my application:
7. I agree that any lawsuit arising out of my employment with, or my application for employment with, Chrysler Group LLC or any of its subsidiaries and affiliates must be filed no more than 180 days after the date of the employment action that is the subject of the lawsuit. While I understand that the statute of limitations for claims arising out of an employment action may be longer than 180 days, I agree to be bound by the 180 day period of limitations and I WAIVE ANY STATUTE OF LIMITATIONS TO THE CONTRARY.
The plaintiff filed suit 270 days following the termination of his employment - well beyond the agreed-upon limitations period set forth in the employment application – and the trial court granted summary judgment in favor of Chrysler on all of his claims. The plaintiff then argued on appeal that the waiver should not be enforced on the basis that, among other things, he did not receive anything from Chrysler in exchange for the waiver (i.e. consideration, a prerequisite for a valid contract) and that he was unable to understand the language contained in the waiver. The Sixth District Court of Appeals rejected the plaintiff’s arguments and noted that, in exchange for the waiver, Chrysler obligated itself to review the plaintiff’s application. The Court of Appeals further noted that the plaintiff never questioned Chrysler regarding the waiver language and that a party entering into a contract has the responsibility to learn the contract’s terms before agreeing to be bound by them. The Court of Appeals therefore enforced the waiver and affirmed the trial court’s grant of summary judgment on all of the plaintiff’s claims.
The concept of shortening a limitations period through a contractual waiver is certainly not a new one. Over time, however, federal courts have limited the circumstances under which such waivers are enforceable. For example, federal courts have held that employees cannot waive the statute of limitations with respect to claims arising under the federal Fair Labor Standards Act or the Equal Pay Act. Federal courts have also held that, in order for a waiver of the limitations period relating to other federal claims to be valid, it must specifically identify the claims and clearly express the intent to limit the period in which a party could bring an action based upon such claims.
This decision is a victory for Ohio employers, as it operates as a blessing of broad waiver language that will likely be enforced with respect to claims arising under Ohio law, thus limiting employers’ exposure to such claims.
Should you have any questions regarding this ruling or would like additional information regarding how you can utilize waiver language to benefit your organization, please feel free to contact Amanda Smith or any KWW attorney.