Issue: Employees' ability to sue your organization expires at different times under different employment laws.
Benefit: A new court ruling says you can set a more-restrictive statute of limitations, at least in the 6th Circuit.
Action: Talk with your attorney before going ahead with this risk-opportunity.
Different statutes of limitations apply to each employment law. For example, in most states, employees can file sexual-harassment lawsuits within 300 days after an incident.
But, can your organization establish its own, more-restrictive time limit on lawsuits? Yes it can, at least in the 6th Circuit (Kentucky, Michigan, Ohio and Tennessee), according to a new court ruling. If employees agree, either before or during employment, to a reasonable time limit, that pact can be enforced.
The case: A factory worker signed a job application that said any employment lawsuit must be filed within six months of the employment action. She later filed a sex-harassment suit relating to an incident that occurred a year earlier. A federal appeals court tossed out the case, citing the six-month time limit she agreed upon in the application. (Thurman v. Daimler-Chrysler Inc., No. 02-2474, 6th Cir., 2005)
The ruling offers a potential lawsuit-prevention tool for employers in the 6th Circuit. Plus, it's good news for other employers if further circuits follow this court's lead.
Advice: Before rewriting your statute-of-limitations policy, talk with your employment attorney. If you do decide to mandate different time limits, go overboard to highlight the provision, making sure the employee reads and fully understands the consequences.