Court of Appeal: Employers Cannot Shorten Statutes of Limitations in FEHA Discrimination Cases

The employment relationship is contractual (e.g., I'll work for you and you will pay me).  Statutes of limitations generally can be shortened by contract, even in California.  Now forget all of these general rules. An agreement shortening the California Fair Employment and Housing Act's statute of limitations is void, said the Court of Appeal in Ellis v. U.S. Security Associates.

Ashley Ellis sued her employer and manager for sexual harassment, retaliation and failure to prevent discrimination / harassment / retaliation under the Fair Employment and Housing Act.  She agreed in her employment application to bring any claim against the employer within six months, notwithstanding any law to the contrary.

The trial court enforced the provision. The Court of Appeal reversed.  The Court was particularly concerned that the six-month statute would impede the Fair Employment and Housing Act's administrative charge process.  (By statute, the employee has a year from the discriminatory event to file a charge with the Department of Fair Employment and Housing, and then a year from the end of the administrative process to file a lawsuit.  The DFEH itself has a year to investigate.)  The six-month limitation would limit the DFEH's ability to investigate, which the court found troubling.

So, the Court went about distinguishing and casting aside contrary authority in other jurisdictions and other legal contexts to hold that limiting the statute of limitations in FEHA cases to six months is unenforceable as "unreasonable and contrary to public policy."

We do not know what the Court would have done if the employer had limited to six months the time to file the administrative charge with the DFEH (instead of the year employees normally are allowed), or if the employer had limited to six months the time to file a lawsuit from the receipt of the "right-to-sue letter."  Perhaps a court will address a more generous statute of limitations in a later case.  For now, though, employers who shorten limitations periods should carve out FEHA-based claims.

The case is Ellis v. U.S. Security Associates and the opinion is here.