Contract That Shortens Time for Bringing Employment Claims Rejected by California Court

Ellis v. U.S. Security Associates, No. A136028 (March 20, 2014): A California Court of Appeal recently held that an employer cannot contractually shorten the amount of time that an employee has to bring an action under the Fair Employment and Housing Act (FEHA). The court found that shortening the limitation period to six months was unreasonable and against public policy.

Ashley Ellis began working as a security guard at U.S. Security Associates in September 2009. When she applied for the position, Ellis was required to sign an employment application which in part stated that any claim arising from her employment had to be brought within six months and that all other statutes of limitations were waived.

Ellis was quickly promoted and in August 2010 started working under the supervision of Rick Haynes. From the time Ellis started in her new position, Haynes began making suggestive sexual comments to her, commenting about her appearance, telling Ellis and her coworkers about his sexual activities with his wife (who also worked at the company), and engaging in other objectionable conduct.

Over the next few months, multiple female employees complained about Haynes and he was eventually fired in December 2010. Ellis was promoted again but never received a raise that the company promised her. In January 2011, she quit her job at U.S. Security.

In November 2011, Ellis sued U.S. Security and Haynes for sexual discrimination, failure to maintain an environment free from harassment, and retaliation (among other causes of action). U.S. Security sought to dismiss the lawsuit based on the six-month limitation agreed to in the employment application.

The trial court, in a seven-line order, without discussion or explanation, dismissed the suit. Ellis appealed the decision. The California Court of Appeal disagreed with the trial court and held that the shortened limitation period was unreasonable. The court pointed out that the public policy underlying FEHA is meant to “protect and safeguard” the rights of employees against discrimination. Therefore, shortening the limitation period for a FEHA claim to six months deprives employees of their statutory rights.

In reaching this decision, the court relied on an earlier Court of Appeal decision in Martinez v. Master Protection Corp., noting that, “[s]imilar to Martinez, Ellis is asserting FEHA claims, and the provision in the application—which she was apparently required to sign as a condition of even seeking employment—seriously truncates the time she has to vindicate her statutory rights, drastically reducing the time to sue allowed by the FEHA by as much as five-sixths.”

The decision in Ellis confirms that California courts do not look favorably on agreements that unreasonably reduce the time that employees have to claim violations of their statutory rights.