Surely you have heard the warning–"read the fine print." Don't dismiss this warning, especially in the context of your employment. While many employers do not create employment agreements per se, there may be other types of agreements that you sign relating to your employment. Those various agreements may include language that you will regret later on. This is especially true in cases involving cases of discrimination under employment law. A recent case out of Illinois demonstrates the danger of contracting away your rights in the employment setting.
Discrimination Claims Must Be Filed Within a Certain Period of Time
In general, a charge of discrimination must be filed within 180 days from the day the discrimination took place. The deadline may be extended to 300 days if the discrimination occurred in a state that has its own anti-discrimination law. This period (referred to as the statute of limitations period) begins on the day you first become aware of the discriminatory employment decision (e.g., demotion or
termination), and will affect your claim regardless of when the decision was made or when it became effective.
This distinction is very important. For instance, if your employer notifies you today that you will be demoted, effective two weeks from now, the deadline begins to run today, not in two weeks. When a contracted agreement shortens this deadline, you will have even less time to take action after you learn of discriminatory behavior.
Contracting for a Shorter Statute of Limitations Period
In Lugihibl v. Fifth Third Bank, filed in the Northern District of Illinois, the federal appellate court considered the terms of an agreement between employer and employee, which shortened the limitations period of certain employment discrimination claims. A bank employee filed a sex and age discrimination and retaliation claims against Fifth Third Bank after his employment was terminated.
The problem was, despite Illinois' 300-day statute of limitations period, the employee had agreed to a shorter, 180-day period. This agreement was included in his incentive compensation agreement. As a result, his lawsuit was dismissed as untimely, because he had filed his EEOC claims after the 180-days.
Other Courts Have Ruled in the Same Way
This case is not the first of its kind. In reaching a decision, the Illinois federal district court relied on several other cases which also held that statute of limitations periods could be shortened by contract. A case out of Wisconsin, Doe v. Blue Cross Blue Shield United of Wisconsin, is another example of a ruling affected by a reduced statute of limitations.
There is one specific exception, however. These rulings are limited to EEOC charges—that is, cases involving discrimination claims. Employers cannot contractually limit the time period for filing a lawsuit in federal court. The moral – be careful what you sign before you sign away rights you may not know you have.
If you feel you have been the victim of discrimination, or if you have questions regarding your employment rights, please contact a Birmingham employment lawyer from Wrady & Michel, LLC, either online or by calling us at (205) 265-1880.