Ensuring Employment Contracts Are Sound Under California Law

Numerous statutes exist that establish the parameters for employment contracts. Before implementation, companies should seek legal advice to ensure their contracts are sound.

A case in point is Ellis v. U.S. Security Associates et al., ruled on in March, 2014 by the Court of Appeals of California. Ashley Ellis sued her employer and other parties based on sexual harassment, with the evidence of sexual harassment undisputed. However, a clause in the employment contract stated that employees must file claims or lawsuits no more than six months after the date of the employment action and that employees were to waive any statute of limitations to the contrary. The lower court dismissed the Ellis claim based on this contract provision because Ellis filed the claim after six months.

However, the appeals court reversed the decision. The court found that the shortened limitation for filing lawsuits was unreasonable and against public policy. Ellis had filed her lawsuit within the state's statutory limitations and also filed a timely notice of appeal. The court based its findings on the following public policy regarding an employee's privilege to bring a lawsuit:

  • The Fair Employment and Housing Act (FEHA) is the state's public policy to protect and safeguard employees' rights against discrimination.
  • The purpose of the FEHA is to provide effective remedies that eliminate discriminatory practices.
  • Before suing, employees have to exhaust all administrative remedies and file a timely complaint with the Department of Fair Employment and Housing (DFEH), which either files a civil action against the employer or issues a right-to-sue letter.
  • The time limit for filing an administrative claim with the DFEH is one year from the date of the unlawful act.
  • Employees must file lawsuits within one year from the date of the right-to-sue letter.

Topics:  Contract Drafting, DFEH, Employer Liability Issues, Employment Contract, FEHA

Published In: Civil Procedure Updates, Civil Rights Updates, General Business Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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