Employers Cannot Contractually Limit Title VII Claims

Employment Law


Employers cannot shorten the time period in which employees can file a Title VII claim by contract, the U.S. Court of Appeals for the Sixth Circuit has ruled.

As part of the application process to be a culinary worker for an MGM casino, Barbrie Logan signed a document that agreed to a six-month limitation period for her to pursue any claims against her employer—and waived any statute to the contrary providing a longer period of time—as a condition of her employment. After several years spent working at the casino, Logan resigned.

In her subsequent Title VII lawsuit, Logan alleged that she was constructively discharged due to sex discrimination and retaliation. Logan filed her charge of discrimination with the Equal Employment Opportunity Commission (EEOC) 216 days after her resignation.

MGM moved for summary judgment, arguing that Logan’s employment agreement required her to commence any action arising out of her employment within six months and that her failure to do so barred her claim. The district court agreed and granted the motion.

Logan appealed, presenting the Sixth Circuit with a matter of first impression: whether a contract can alter the statute of limitation period for suits established by Title VII.

Emphasizing the detailed enforcement scheme of the statute and the national implications for congressional antidiscrimination policy, the federal appellate panel reversed, holding that employers may not enforce the contractual alteration of Title VII’s statute of limitation period.

Unique among workplace antidiscrimination laws, Title VII relies on a combination of public and private action and mandates that the EEOC must afford noncompliant employers the chance to voluntarily cure their violations before litigation may be brought against them, the court said.

That means the EEOC needs the time allotted by Congress to investigate a charge of discrimination and then engage in a process involving a conference, conciliation and persuasion, exhausting its informal methods of eliminating alleged unlawful employment practices before a complainant can turn to the courts, the Sixth Circuit explained.

“These cooperative mechanisms have important implications for an employee who has suffered workplace discrimination,” the court wrote. “Any alternations to the statutory limitation period necessarily risk upsetting this delicate balance, removing the incentive of employers to cooperate with the EEOC, and encouraging litigation that gives short shrift to pre-suit investigation and potential resolution of disputes through the EEOC and analog state and local agencies.”

The panel also found it important that Title VII contains its own limitations period.

“These considerations lead us to conclude that the 300-day limitation period to sue under Title VII is a substantive, rather than procedural, rule,” the court said. “And because ‘it [is] clear that there can be no prospective waiver of an employee’s rights under Title VII,’ it naturally follows that the limitation period of this statute is not prospectively waivable as it pertains to litigation.”

This analysis found parallels in prior case law in related areas, such as the Equal Pay Act and the Fair Labor Standards Act context, the court noted.

Of equal importance to the Sixth Circuit’s analysis is the uniform national scope of the policies Congress enacted in Title VII. The statute “creates a uniform, nationwide system using ‘an integrated, multistep enforcement procedure’ to resolve claims of employment discrimination,” the court stated.

Permitting employers contractually to limit Title VII’s time limits would frustrate the uniform application of the statute, the panel observed. “We therefore hold that contractual clauses that purport to shorten the limitation period of Title VII to bring suit are not enforceable,” it concluded.

To read the opinion in Logan v. MGM Grand Detroit Casino, click here.

Why it matters: Employees are entitled to the 300-day period granted by Title VII in order to file a charge of discrimination with the EEOC, the Sixth Circuit held, refusing to permit employers to contractually shorten the time limit in order to effectuate “the elaborate pre-suit enforcement mechanisms of Title VII” and uniform national application of the statute.