In today’s litigious environment, employers are constantly facing the threat of litigation.  It seems employees are willing to sue employers for any number of reasons related to wrongful discharge and/or discrimination.  

Employers can and should find ways to protect themselves from this unwanted and costly litigation process.  One of the strategies an employer can adopt is a clear an unmistakable policy regarding the employment relationship, including a provision designed to shorten any applicable statute of limitation.  

Almost every cause of action (that is, a lawsuit, claim, or charge) must be brought within a specified time frame.  This is referred to as a “statute of limitations.”  In many cases where an employee is alleging wrongful discharge based on contract principles, the statute of limitations can be as long as six years.  For discrimination and other personal injury type claims, the statute of limitations can be up to three years.

However, employers have the right to shorten these statutes of limitations by agreement with their employees.  The courts have repeatedly upheld 180 day or six month statute of limitations.  

On September 15, 2015, the Michigan Court of Appeals again upheld an employer policy containing a shorter statute of limitations, this time with the provision found in the employee handbook.  In Hier v. Douglas J. Management, LLC, the company’s handbook required an employee to commence “any claim, complaint, action or suit relating to their employment with the company” within 182 days of the event “giving rise to the claim, complaint, action or suit.”  

One of the company’s employees sued for wrongful discharge based on retaliation under the Workers’ Disability Compensation Act.  While the employee had a pending workers’ compensation claim at the time of her termination, she nevertheless filed a lawsuit against the company for retaliation, but did not do so until nearly one year after her termination.

The court, under these circumstances, indicated that the employee had not filed a timely lawsuit because the lawsuit had not been filed within six months of her termination which was the event upon which the 182 days must be based.  The court rejected the employee’s argument that the filing of an application for hearing with the Workers’ Compensation Agency adequately protected her rights for wrongful discharge.  

The court distinguished between rights to workers’ compensation benefits that are adjudicated by the Workers’ Compensation Agency/Board of Magistrates with the types of wrongful discharge retaliation claims that must be litigated in circuit court.  Because the plaintiff was pursuing her wrongful discharge claim in circuit court and failed to pursue those claims within 182 days, the Court of Appeals upheld the dismissal of the employee’s lawsuit because the employee had failed to file it in a timely fashion.