In Fayak v. University Hospitals, Amanda Fayak agreed to a clause within her employment application that required her to file any claim or lawsuits relating to her service with University Hospitals “no more than six (6) months after the date of the employment action that is the subject of the claim or lawsuit.” As part of this clause, she also specifically waived any limitations period longer than six months.
Three years later, Fayak was discharged by University Hospitals after 14 months of “unauthorized/unapproved” leave. Soon after her termination, Fayak filed complaints against University Hospitals related to incidents that occurred well over a year before her termination but, critically, did not raise any claims directly related to her termination.
University Hospitals moved to dismiss her claims based on the shortened limitations period clause in Fayak’s employment application, arguing that the clause barred her claims since they were filed well beyond the six-month limitations period. Fayak argued that the clause was void and unenforceable.
The Court of Appeals agreed with University Hospitals. It found that the shortened limitations period was valid as applied to claims arising under state law. While these types of shortened limitations periods may sometimes be unenforceable when applied to employment rights granted by federal statutes like Title VII of the Civil Rights Act of 1964, the state law claims asserted by Fayak are not subject to those same protections.
The court concluded that a contract provision, such as a clause in an employment application, may limit the time to bring an action based on that contract to a period shorter than the general statute of limitations so long as the shorter period is reasonable. Here, it found that the six-month limitation was reasonable and therefore enforceable under Ohio law. Employers are not limited to using employment contracts to bind employees to a shortened limitations period. In fact, just last week in Thompson v. Fresh Products, LLC, the federal Court of Appeals for the Sixth Circuit upheld an employer’s use of its employee handbook acknowledgement to bind its employees to a shortened limitations period.
Contractual limitations are just one of the many litigation-avoidance strategies that are especially useful in states with long statutes of limitations. While recent legislation will soon reduce the statute of limitations for some cases in Ohio – stay tuned to KWW for more information on that topic – employers can take a proactive role now in reducing the number of claims filed against them.
To discuss how KWW can help prepare or implement a customized strategy for your organization, please contact any one of our attorneys. As always, your workforce is our priority.