“Get Shorty” Shortening the Window for Employee Lawsuits

From an employer’s perspective, keeping up with the law can sometimes seem daunting. But, even as federal and state legal and regulatory requirements grow, carefully drafted employment agreements can help to reduce the risk of costly litigation initiated by current or former employees. Specifically, employers should consider the inclusion of a contractual provision to shorten the statute of limitations period for an employee lawsuit against the company. An employee covered by such a provision must bring a lawsuit within the agreed period of time, or else risk having his or her case barred by the contract-based statute of limitations.

Michigan courts have held that provisions shortening the statute of limitations period for employee lawsuits are generally enforceable as written, so long as they do not otherwise violate the law or public policy. In fact, the Michigan Court of Appeals recently enforced such a provision (setting forth a 180-day limitations period), even though it was contained within an initial employment-offer letter, and not in the employment agreement that was later executed. If your company uses written employment agreements, they should contain one of these provisions. If you don’t have written employment contracts but do use written employment applications, consider including such a provision in that document. Whatever your practice, consider whether it can be modified to take advantage of this opportunity to limit your exposure to unwanted lawsuits.

Please contact Wright Beamer if you have any questions or need assistance in developing this or any other employment document.