Limiting Liability for Employment Claims: Shortening the Statute of Limitations

Part of our job as dental practice attorneys at Nardone Limited is to help dental practice owners minimize their exposure to employment litigation. One way to protect yourself and your dental practice against potential employment-related claims is to have employees agree to a shortening of the statute of limitations. Our employment law attorneys and dental practice attorneys recommend that our clients agree to a shortening of the statute of limitations with their employees to limit exposure to employment litigation.

How Does a Statute of Limitations Work?

The statute of limitations is the amount of time an individual has the ability to bring a claim against a party after the date of the events that gave rise to the claim. Federal employment discrimination claims under 42 USC § 1981 can be filed up to four years after the discrimination occurred. In Ohio, some employment discrimination claims have a six year statute of limitations. Workplace intentional tort claims have a two year statute of limitations under Ohio law. A party cannot bring a lawsuit after the statute of limitations expires on the claim.

Shortening the Statute of Limitations in Employment Contracts

Courts have consistently held that employment contract clauses that shorten the statute of limitations are enforceable. A contractual provision that shortens the time in which a party has to bring a lawsuit is enforceable as long as it is not unreasonable. In Thurman v. DaimlerChrysler, Inc., the Sixth Circuit held that a clause in an employee’s application materials prevented her from bringing a claim against her employer. In the employee’s application to work at DaimlerChrysler, a clause provided that any claim or lawsuit relating to her employment must be filed within six months of the employment action giving rise to the claim. When the employee brought an action against DaimlerChrysler over six months after the event giving rise to her claim, the court granted DaimlerChrysler’s motion for summary judgment because of the clause in the application materials. The Sixth Circuit said there was nothing inherently unreasonable about a six-month limitation period on bringing an employment-related lawsuit. Therefore, the shortening of the statute of limitations provision was enforceable against the employee.

Nardone Limited’s Advice for Dental Practices

To limit the time period employees and former employees can bring a lawsuit against your dental practice, you should include a clause in employee contracts that shortens the statute of limitations. Be sure that the clause stands out in the document to signal its importance. You should have the employee sign the page or document that contains the clause. The best amount of time to shorten the statute of limitations is probably six months. If the time period is any shorter, a court may find that it is unreasonable and void the clause.