Employment-related claims; Effect of a 180-day limitations period agreed to in an employment application; Rayford v American House Roseville I, LLC

Noting that the trial court in this employment dispute “did not have the benefit of the legal framework” in the Michigan Supreme Court’s recent Rayford decision when it made its ruling here, the court reversed summary disposition for defendant-former employer and remanded. There was no dispute “that plaintiff was terminated from his employment on” 1/11/19 and that he filed this case exactly three years later. The trial court ruled that his “claims were barred by the contractual 180-day limitations period contained in the employment application that plaintiff completed and in which he explicitly agreed to the 180-day limitation period.” The only issue before the court was “whether the contractual 180-day limitation period is valid and enforceable because, if it is, plaintiff’s action was clearly filed well beyond the expiration of this limitation period.” The plaintiff in Rayford “signed an Employee Handbook Acknowledgment one week after she was hired by the defendant. . . . The acknowledgment contained a provision in which the plaintiff agreed that any lawsuit arising out of her employment with the defendant ‘must be filed no more than 180 days after the date of [the] employment action that is the subject of the claim or lawsuit’ and waived any longer statute of limitations that may exist.” She sued defendant a few months short of three years after she was terminated from her employment. The Supreme Court held “‘that the employee here lacked bargaining power when she was presented with a boilerplate employment agreement that contained a shortened limitations period of 180 days. The contract was adhesive and, as a result, warrants close judicial scrutiny of the challenged shortened limitations provision.’” Thus, the Supreme Court remanded the case “‘to the trial court so that the record can be further developed to determine the reasonableness of the shortened limitations period and whether the provision was unconscionable.’”