The Fourth Circuit recently held that agreements with employees may not prospectively shorten the time for employees to bring claims under Title VII of the Civil Rights Act of 1964 (Title VII) or the Age Discrimination in Employment Act (ADEA). The court found that such agreements impermissibly interfere with the statutes' unique remedial structure.
Statutory Deadlines Under Title VII and the ADEA
Employees who believe their rights have been violated under Title VII or the ADEA must file a charge with the Equal Employment Opportunity Commission (EEOC) before filing a lawsuit. The statutory deadline for filing a charge with the EEOC is 180 days from the alleged discriminatory act, or up to 300 days if a state or local agency enforces a law prohibiting discrimination on the same basis.
Once a charge is filed, the EEOC investigates to determine whether discrimination occurred and may attempt to resolve the matter through conciliation. If conciliation fails, the EEOC may dismiss the charge, file suit, or issue a "Notice of Right to Sue," which permits the employee to sue. After receiving such notice, employees have 90 days to file a lawsuit in federal court.
Thomas v. EOTech, LLC: Fourth Circuit Rejects Employment Limitations Agreements
In Thomas, an employee signed a pre-employment "limitations agreement." The agreement shortened the time she had to sue her employer for employment-related claims to 180 days (as opposed to the longer combined statutory time frames, which provide at least 180 or 300 days to file an EEOC charge plus 90 days to file suit after receiving a Notice of Right to Sue) and tolled her 180-day period while an administrative charge was pending with the EEOC.
The employee was later terminated, and she filed a discrimination charge with the EEOC and the Maryland Commission on Civil Rights. The EEOC issued a Notice of Right to Sue, and the employee filed a lawsuit in federal court alleging violations of Title VII, the ADEA, and the Maryland Fair Employment Practice Act.
Her employer moved to dismiss the lawsuit, arguing that it was untimely under the pre-employment limitations agreement because 196 days had passed. The district court agreed and granted summary judgment to the employer. However, on appeal, the Fourth Circuit reversed the district court's ruling as to the Title VII and ADEA claims, holding that "parties may not by advance agreement render untimely a suit that would otherwise be timely under Title VII or the ADEA." So, an employer cannot shorten the time an employee has to file a charge of discrimination with the EEOC or to file a lawsuit after proceedings before the EEOC conclude.
In reaching this decision, the court focused on the fact that these statutes have carefully constructed remedial systems and concluded that a private party cannot be allowed to disrupt that remedial system.
What This Means for Employers: EEOC Filing Deadlines and Employment Agreement Compliance
Employers should reconsider employment agreements which contain provisions that shorten the time for employees to bring Title VII or ADEA claims. While Thomas applies only within the Fourth Circuit, the only other court of appeals to address the issue, the Sixth Circuit, reached the same conclusion. Importantly, because the Fourth Circuit focused on the unique remedial scheme under Title VII and the ADEA, agreements to shorten the limitations period under other statutes are not impacted.
Employers with questions about this decision, its implications, or its application to specific employment practices are encouraged to contact the authors of this article or any attorney in Venable's Labor and Employment Group.