Sixth Circuit Extends Ban of Contractually Shortened Limitations Periods to ADA and ADEA Claims

The U.S. Court of Appeals for the Sixth Circuit, the appellate court responsible for the federal district courts of Michigan, Ohio, Kentucky, and Tennessee, recently made clear that claims asserted under the Americans with Disabilities Act (ADA) and the Age Discrimination in Employment Act (ADEA) cannot be subject to contractually shortened limitation periods. In Thompson v. Fresh Products, LLC, No. 20-3060 (January 15, 2021), the Sixth Circuit held that the statute of limitations for claims arising under the ADA and ADEA is a substantive right that cannot be waived by agreement of the parties. This decision was an extension of the Sixth Circuit’s 2019 decision in Logan v. MGM Grand Detroit Casino, which held that the statute of limitations for claims under Title VII of the Civil Rights Act of 1964 could not be shortened by agreement of the parties.

Background

In 2018, plaintiff Cassandra Thompson filed a lawsuit in the U.S. District Court for the Northern District of Ohio alleging that her employer, Fresh Products, LLC, had discriminated against her because of her disability, age, and race, in violation of the ADA, ADEA, and Title VII, respectively, when terminating her employment during a layoff. She also brought claims of disability and race discrimination under analogous Ohio state law. The district court granted summary judgment in favor of Fresh Products on Thompson’s ADA claims, state law discrimination claims (both race and disability), and ADEA claims on the basis that they were untimely and that “Thompson had failed to establish a prima facie case of discrimination on any of her claims.”

Thompson had previously signed a handbook acknowledgement agreeing to be bound by a six-month contractually shortened limitations period for bringing “any claim or lawsuit arising out of [her] employment with Fresh Products,” but she did not bring her claims in court until approximately 16 months after the termination of her employment. Thompson, however, did file a charge of discrimination with Ohio’s Civil Rights Commission and the U.S. Equal Employment Opportunity Commission days after the termination of her employment. Nonetheless, the district court enforced the contractually shortened limitations period as to Thompson’s ADA, ADEA, and state law discrimination claims, but not as to her Title VII claims.

The Sixth Circuit’s Decision

The Sixth Circuit, relying in large part on its 2019 Logan decision analyzing Title VII, held that Thompson’s ADA and ADEA claims were timely because the applicable limitations periods could not be contractually shortened. The court held that Thompson was permitted the full 300-day limitations period in which to assert her claims through a charge of discrimination, which she satisfied. Because her lawsuit was then filed before the expiration of the time period provided in her notice of dismissal and right-to-sue letter (90 days), the court found that her lawsuit was timely—despite the contractually shortened six-month limitations period.

The court made clear that the ADA’s and ADEA’s limitations periods were “substantive, non-waivable rights” and refused to displace the 300-day and subsequent 90-day limitations periods applicable to the statutes. The court’s decision relied on both the express language of the ADA and ADEA and the court’s previous decision in which it held that “where statutes that create rights and remedies contain their own limitations periods, the limitation period should be treated as a substantive right,” which may not be waived. Despite finding that Thompson’s claims were timely in the face of the contractually shortened limitations period, the court still affirmed dismissal of her ADA and ADEA claims based on the evidence presented.

Key Takeaways

While this decision removes two more federal employment laws from being subject to contractually shortened limitations periods, it does not—on its face—affect analogous state laws. In each of the states that comprise the Sixth Circuit, the limitations periods for certain state law employment discrimination claims may be shortened by agreement of the parties. Michigan, Ohio, and Tennessee, have all enforced contractually shortened limitations periods, with six months being a common time frame.

In Michigan, for example, it has become an oft-used practice to include a shortened limitations period in many employment agreements and handbook acknowledgements, after a 2005 Michigan Court of Appeals decision. There have, however, been recent developments with respect to Ohio’s limitations period for employment discrimination claims. Kentucky, while not as permissive as the other states, may enforce parties’ agreements to shorten limitations periods, but only if the plaintiff is still permitted a limitations period equal to half the length of the statutorily provided limitations period. By statute, more restrictive limitations periods are unenforceable. Accordingly, even in the face of the Thompson decision, agreements to shorten limitations periods in which applicants or employees may assert claims may still be advantageous.