Ellis v. U.S. Sec. Assocs.

Employment agreements between parties that attempts to change, fix, or otherwise amend the California statute of limitations for bringing employment based sexual harassment claims is not legally cognizable or recognized by the Courts.

A recent decision puts to rest the issue of whether employment agreements between parties, specifically employers and employees, can effectuate a time modification to California’s statute of limitations for bringing employment based sexual harassment claims. In the case of Ellis v. U.S. Sec. Assocs., 224 Cal. App. 4th 1213, 169 Cal. Rptr. 3d 752 (2014), the employer required all of its employees as part of the employment application, to agree to a six-month statute of limitations for any and all employment related legal claims, including issues related to sexual harassment, discrimination, and other employment issues. Typically, employees as part of the employment application process for this particular employer, had no choice but to sign and agree to the statute of limitation language, as a condition precedent to obtain employment.

In this case, the employee Ellis asserted sexual harassment claims against the employer, specifically a manager that has made sexually offensive comments to her, and to which the manager was eventually terminated. The employee Ellis eventually received after failing to receive a promised salary, and then proceeded to file such sexual harassment claims six months after her employment separation to which the trial court, in recognizing the contractual language of the employment application regarding a six-month statute of limitation, dismissed the employee’s sexual harassment claims as being time-barred.

The Appeal

On appeal, the California Court of Appeals reversed the trial court determination, finding that it was against public policy and completely unreasonable, for employers to insist that employees as part of an employment application, agree to a short statute of limitation for specific legal claims, including sexual harassment, when California state law allowed for a much more protective, liberal, and longer period of time for such claims. For instance, the California Court of Appeals referenced the State’s Fair Housing and Employment Act (“FEHA”) which allows for a one year statute of limitation for sexual harassment claims against an employer. Specifically, the Court of Appeals reasoned that it was the intent of the legislature in effectuating FEHA, that individuals be afforded certain employment based protections, which includes the ability to file an administrative complaint or a lawsuit, as a result of adverse actions by employers, including instances of sexual harassment.

The Court found that as part of FEHA, is the authority and discretion of the relevant government agency, in this case the Department of Fair Employment and Housing, which enforces FEHA, including conducting investigations against employers involving allegations of sexual harassment. The Court of Appeals further reasoned that the legislative justification for the one-year statute of limitations by which an employee could file a sexual harassment claim is in part due to the fact that it generally takes the relevant government agency months to a year for completion of its investigation. As such, the Court of Appeals deferred to the legislative intent, purpose, and goals of such FEHA, in determining that any agreed upon statute of limitations by way of an employment agreement or otherwise, was completely inconsistent with government public policy and the legislative intent of FEHA.

Another policy justification for deferring to the legislative background and intent of the one-year statute of limitations, was the Court’s view that when it comes to issues involving sexual harassment based claims, they occur over a long-period of time, and that by shortening the statute of limitations, you otherwise coerce a victim to come forward prematurely before there may be sufficient evidence to support such claims. Although not explicitly addressed, is the issue that employers should not be seeking to require, force, or otherwise compel its prospective employees to forego their employment rights under the law as a condition of employment, which was the case herein. Here, an employee has no choice but to submit and agree to such shortened statute of limitation language in the employment application, otherwise the employer could simply dismiss the employee’s application as incomplete or not submitted in accordance with the employer’s policies and procedures. In this case, the Court of Appeals clearly rejected such notions, and reaffirmed that when it comes to the statute of limitations and employment based protections, that employers cannot limit or minimize such. Thus, employers should be cautious when seeking to impose upon both potential and current employees various contractual stipulations that may limit their ability to freely assert various employment legal based claims.

If you have any employment-related dispute and are considering suing your employer under FEHA,contact the Orange County Wrongful Termination Lawyers at Nassiri Law Group, practicing in Orange County, Riverside, and Los Angeles. Call (949) 375-4734.