v. Kubatzke, the Michigan court of appeals addressed the issue of whom can
benefit from a provision in an employment contract which shortens the
limitations period for legal actions, including discrimination cases. The
plaintiff had filed an multi-count action in federal court against Delta
College for discrimination. The case was dismissed because of it was
found to be barred by the shortened limitations period in the plaintiff's
There were two provisions in the agreement which addressed the issue. The
first was an agreement that any suit or action against the college
arising out of employment or termination from employment including
claims arising under state or federal discrimination laws must be brought
within 180 days of the event giving rise to the claim or be forever barred.
Any limitations period to the contrary was waived.
A second provision stated that plaintiff agreed that any claim or lawsuit
against the college or any of its divisions must be filed no more than 6 months
after the date of the employment action that gives rise to the claim.
Plaintiff filed a retaliation action against several college administrators in
state court for retaliation after the dismissal of the federal court
action. The trial court dismissed the cases on the basis that
the contractual limitations period applied to all plaintiff's claims,
regardless of the identity of the defendants. The court of appeals reversed.
The court of appeals stated in its per curiam opinion that the
administrators were not parties to the contract. The contract did not
describe any other class of persons to whom the shorten limitations period
applied. The second provision clarified the scope of protection
to which the employer was entitled and did not expand the list of persons
entitled to protection under the shortened limitations period. With
respect to the argument that the defendants were third
party beneficiaries to the agreement, the court stated that such an
interpretation contradicts the clear and unambiguous language of the
The defendants argued that the lawsuit was barred by res judicata
and collateral estoppel. The court of appeals stated that the federal
court did not decide the underlying claims of discrimination---only the statute
of limitations issue.
Under the court's interpretation of the language, the administrators
should have been included with the language dealing with the college's other
divisions. Had this language been added, it is likely the court would
have upheld the dismissal. The language of an agreement include all
possible defendants. Indeed, no potential defendant wants to be left
For additional Labor and Employment law
insights from John Holmquist, visit the Michigan
Employment Law Connection.
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