In Logan v. MGM Grand Detroit Casino, released September 25, 2019, the United States Court of Appeals for the Sixth Circuit, which hears appeals from the federal district courts of Ohio, Michigan, Kentucky and Tennessee, held that employers cannot reduce the time employees have to file a charge alleging employment discrimination under Title VII of the Civil Rights Act of 1964. The Sixth Circuit’s unanimous decision makes contractual provisions that require employees to bring claims in less than the 300-day filing window set by Title VII unenforceable. The court held that Title VII’s statute of limitations is a substantive, rather than a procedural, right that cannot be waived by contract.
In Logan, the employee agreed, as part of her employment application, to bring any claims of discrimination within 180 days. She later filed a complaint of discrimination more than six months after the alleged discriminatory acts, and the employer raised an affirmative defense that she was contractually precluded from doing so.
Title VII prohibits employment discrimination based on race, color, religion, sex and national origin. It requires employees to first give the Equal Employment Opportunity Commission (EEOC) an opportunity to investigate and resolve claims by filing a Charge of Discrimination within 300 days of an alleged unlawful employment action. The EEOC can then attempt to mediate the dispute between the employer and employee through informal and cooperative methods, or it may issue the employee a right-to-sue letter. Upon receipt of this letter, the employee has 90 days to initiate suit in federal court against the employer. In its opinion, the Sixth Circuit noted that allowing employers to contractually alter this statutory mechanism risks “upsetting this delicate balance, removing the incentive of employers to cooperate with the EEOC, and encouraging litigation.”
While employers and employees may agree to contractual limits on filing periods under some laws, such as the Employment Retirement Income Security Act (ERISA), the court noted that Title VII is unlike ERISA in that it contains its own statute of limitations. Thus, it reasoned, preserving Title VII’s limitations period “not only protects the scheme Congress created with that statute; it is also conceptually in harmony with our interpretation of similar statutes.”
The Sixth Circuit also explained that Title VII creates a “uniform, nationwide system” to resolve claims of employment discrimination and to “achieve equality of employment opportunities.” Permitting contractual limitations on Title VII’s statutory limitations period would require reliance on state law principles, resulting in employees having different rights under the same federal law and disrupting Title VII’s uniform national procedures.
Finally, the Sixth Circuit pointed to 2003’s Morrison v. Circuit City Stores, Inc., in which it held that a “one-year limitation period to bring a Title VII claim to arbitration is not unduly burdensome, and therefore such a provision is enforceable.” However, Morrison has “little, if any, persuasive force” in situations, like that of the employee in Logan, in which there is no agreement with the employee to bring Title VII claims to arbitration.
MGM Grand Detroit Casino has not yet filed a request to appeal Logan to the U.S. Supreme Court. Absent review and reversal by the Supreme Court, employers with operations in the Sixth Circuit are advised not to contractually shorten the EEOC’s 300-day filing prerequisite.
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