Contractual Statute of Limitations Waivers Will be Enforced

In a recent decision entitled Sams v Common Ground, a panel of the Michigan Court of Appeals enforced a Michigan employment contract reducing the customary six years statute of limitations to just one year.

The employee challenged that reduced time limit as being unconscionable and contrary to the Persons with Disabilities Civil Rights Act. The Court rejected both arguments, citing other cases allowing reduction of the statute of limitations to one year and in some cases, six months.

The lesson for both employers and employees from these cases is basic: the time to file suit can be reduced to as low as six months in employment contracts, as long as the contract terms are clearly stated and signed. Signatories who have signed such agreements are well advised to conduct their affairs accordingly.