In Boaz v. FedEx Customer Information Services, the Sixth Circuit Court of Appeals reviewed the following clause in an employment agreement:
To the extent the law allows an employee to bring legal action against Federal Express Corporation, I agree to bring that complaint within the time prescribed by law or 6 months from the date of the event forming the basis of my lawsuit, whichever expires first.
Boaz sued Fedex in 2009, alleging both wage and hour violations of the Equal Pay Act (“EPA”). FedEx moved to dismiss the lawsuit, claiming that the six-month limit in her employment agreement barred her claims. The Sixth Circuit strongly disagreed, arguing that an employment agreement cannot be used to deprive employees of their statutory Fair Labor Standards Act (“FLSA”) rights. Thus, the 6-month limitation in Boaz’s agreement was invalid and the appropriate statute of limitations was held to be in accordance with the FLSA – two years.
FedEx attempted to argue that the Sixth Circuit’s decision would cause confusion among the statutory limitation periods that employers can contractually limit. For example, FedEx claimed that the courts have enforced agreements that shorten an employee’s limitations periods for claims arising under Title VII of the Civil Rights Act of 1964 and that racial discriminations is equally as egregious as the discrimination barred by the FLSA.
However, the Sixth Circuit rejected their argument for two reasons. First, unlike claims under the FLSA, Title VII explicitly states that employees can waive their claims. Secondly, an employer that violates the wage and hour laws gains a competitive advantage that does not exist by violating the FLSA.
The Supreme Court had consistently held that Fair Labor Standards Act protection, unlike other federal statutory protection such as Title VII and FMLA is not waivable by contract. The Sixth Court now extends the same protection to claims under the EPA for the second reason mentioned above.
Considering this case, agreements that lessen statutes of limitations are still a very important tool to limit risk – you can limit your risk for discrimination and other employment claims, even if your wage-and-hour risk might carry forward longer. In summary, employers should always carefully review employment contracts and consult with counsel to ensure compliance with the FLSA and EPA.
If you have questions, please contact Demorest Law Firm. This article was authored by law clerk Roger Leshinsky.
