RELEASE OF CLAIMS: Court approves waiver of limitations period in job application
The Kentucky Civil Rights Act (KCRA) has a five-year statute of limitations, which means an employee who is terminated in 2011 may still be permitted to file a KCRA claim against her employer in 2016. A recent ruling from the U.S. District Court for the Western District of Kentucky provides a way for employers to shorten that time period significantly. The court ruled that an employer may include in an employment application a provision that significantly reduces the time limit for employees to file claims against the company.
Angela Marie Dunn was employed by Gordon Food Services (GFS) from August 2003 until October 2009. Before she began working there, she completed an application for employment. The last page of the application contained 11 separate clauses that GFS asked applicants to agree to before being considered for employment.
One of the clauses stated:
LIMITATION OF CLAIMS: I agree that any action or suit against [GFS] arising out of any employment or termination of employment including, but not limited to, claims arising under the State or Federal civil rights statutes, must be brought within one year of the event giving rise to the claim or be forever barred. I waive any statute of limitations to the contrary.
Dunn checked a box on the application next to that clause indicating she had read it and agreed to its terms.
On October 3, 2008, GFS terminated Dunn. On April 9, 2010, more than one year after her discharge, she filed a lawsuit against GFS alleging claims of wrongful termination, age and gender discrimination, and hostile work environment under the KCRA.
Usually, an employee who claims her employer violated the KCRA has five years to file such a claim. Nevertheless, GFS asked the court to dismiss the lawsuit because it had been filed more than one year after Dunn’s discharge.
The court dismissed the case, ruling that under Kentucky law, employers may make an agreement with an employee or a prospective employee that limits the time available for her to sue the company so long as the time limit is reasonable. In other words, if the time limit is too short, a court may not hold the employee to her agreement. In this case, the court decided that a one-year limitations period is reasonable.
As further comfort to employers, the court ruled that an employee who signs the type of agreement that Dunn signed in her employment application doesn’t lose her at-will status. Dunn remained an at-will employee whose employment could have been terminated for any legal reason, even after she executed the employment application and agreed to limit the time period in which she could file any employment claims against GFS. Dunn v. Gordon Food Services, Inc., 2010 WL 4180503 (W.D. Ky., 2011).
This is the first time a court has ruled that a Kentucky employer can shorten the length of time an employee has to file an employment-related claim. The advantages of doing that are obvious for employers. By setting a deadline shorter than the five-year limitations period under the KCRA, you can prevent the surprise and expense that comes from having to defend a lingering claim. Older claims can be more difficult to defend because witnesses and records may no longer be available years after an employee’s discharge. Consequently, you should, with the help of legal counsel, consider adding such an agreement to your employment applications.
You can find sample language for creating your employment applications in the subscribers’ area of www.HRhero.com, the website for Kentucky Employment Law Letter. Just log in, scroll down to HR Tools, and click on “Sample Policies & Procedures” (www.HRhero.com/lc/policies). If you need help, call customer service at (800) 274-6774. ✤
If you have any questions or need help, please contact any member of the Greenebaum Doll & McDonald Labor and Employment Department. Find us online at www.gdm.com.
Copyright 2011 M. Lee Smith Publishers LLC
KENTUCKY EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems but rather to provide information about current developments in Kentucky employment law. Questions about individual problems should be addressed to the employment law attorney of your choice.