Title VII and other federal labor laws contain specific deadlines by which an aggrieved person must file an administrative complaint or lawsuit. What happens when the employer and employee agree to shorten those periods in an attempt to quickly bring any open issues to closure? According to last week’s decision from the Fourth Circuit Court of Appeals (which includes North Carolina, South Carolina, and Virginia), employers and employees cannot contractually agree to restrict filing periods established by Congress.

In Thomas v. EOTECH LLC, the plaintiff’s employment agreement contained language requiring her to file any claims or lawsuits relating to her employment within 180 days after the occurrence of any alleged violation. It also required her to waive her right to pursue any actions beyond that time period. After she was terminated, the plaintiff filed a charge of discrimination with a state agency and eventually sued the defendant more than 180 days after her termination. Following the former employer’s motion, the district court dismissed the suit based on the waiver language contained in the employment agreement.

On appeal, the Fourth Circuit reversed this decision, remanding the case to the district court. The court concluded that federal civil rights laws demonstrate that Congress intended to establish specific procedural requirements that strike a balance between the employers’ and employees’ interests. Contractual agreements that alter these filing periods upset that balance, create uncertainty, and violate congressional intent as demonstrated by the statutes’ precise requirements.

In a business-to-business context, it is fairly common to see the parties agree by contract to limit the time period for filing claims. The Fourth Circuit may have been concerned that applicants seeking work do not have the same knowledge, sophistication, or bargaining leverage, and they could be coerced by a potential employer to waive or limit their legal rights. The court’s decision is consistent with a previous one by the Sixth Circuit (which includes Tennessee). To date, federal appellate courts have shown little appetite for allowing employers to use employment agreements to restrict statutory protections.

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