This morning, the Sixth Circuit issued an opinion reversing summary judgment in favor of an employer which had required all job applicants to agree to a six month statute of limitations for all employment claims and to waive their right to file a lawsuit (in favor of non-union labor-management internal grievance review board). Alonso v. Huron Valley Ambulance, Inc., No. 09-1812 (6th Cir. 2010). The Court determined that the plaintiffs' signatures on the forms were not knowing and voluntary sufficient to waive their statutory rights under the circumstances of the case. Surprisingly, the Court did not address the substantive or procedural safeguards which existed or were lacking in the employer's dispute resolution process. Instead, it focused almost exclusively on how the information was haphazardly presented to the plaintiff employees during the application process. In particular, the plaintiffs were not given enough detail about the process until more than a month after they were hired (and had signed the agreements) and were never given the opportunity to revoke the agreements.
According to the Court's opinion, all employees were required to sign job applications which contained the following provisions:
The last page of the application contained a section preceded by the phrase, "PLEASE READ THE FOLLOWING BEFORE SIGNING." The section contained, among other things, notice of an internal grievance procedure for employment related disputes, and a six-month limitations period for any employment-related claims. The internal grievance procedure provision provided:
Any dispute arising out of or in connection with any aspect of my employment by the Company, or termination thereof, including by way of example but not limitation, disputes concerning alleged civil rights violations, breach of contract or tort, shall be exclusively subject to review by the Grievance Review Board. Any decision of the Review Board shall be binding to both parties, and enforceable in circuit court.
Additionally, the statute of limitations provision provided:
I further recognize that if employed by the Company, I agree, in partial consideration for my employment, that I shall not commence any action or other legal proceeding relating to my employment or termination thereof more than six months after the termination of my employment and agree to waive any statute of limitations to the contrary.
Once employees were hired, they were given a procedural manual during orientation. The manual describes the four-step grievance process and directs them to an internal policy, which, among other things, provides that "The Grievance Review Board's decision will be final and binding on both the employee and the company."
One of the plaintiffs was ultimately terminated for allegedly falsifying military leave and taking (prescription) drugs which put him in an altered mental state. He utilized the grievance process and then after his termination was upheld, he filed a lawsuit under USERRA, OSHA's whistleblower statute and an unnamed federal statute prohibiting retaliation for filing EEOC Charges. His wife (and co-worker) did not utilize the grievance procedure, but filed a similar lawsuit alleging harassment, and retaliation.
Although the plaintiffs challenged the employer's dispute resolution process on a number of grounds (including USERRA's absence of limitations period and waiver provisions), the Court only addressed whether the plaintiffs' waiver was knowing and intelligent:
Here, Appellants were educated and gave no indication that they did not understand the waivers they were signing, and they successfully used the grievance process on multiple occasions prior to contending that they did not knowingly and intelligently waive their right to a judicial forum. The waiver, however, did not include any information regarding the Grievance Review Board or the procedures that would be used in place of a judicial proceeding. The initial waiver, signed as part of the four-page employment application, read:
Any dispute arising out of or in connection with any aspect of my employment by the Company, or termination thereof, including by way of example but not limitation, disputes concerning alleged civil rights violations, breach of contract or tort, shall be exclusively subject to review by the Grievance Review Board. Any decision of theReview Board shall be binding to both parties, and enforceable in the circuit court.
Plaintiffs alleged "that they were not given any further information regarding the Grievance Review Board until they received an Employee Handbook at Orientation, nearly a month after they were hired. The Employee Handbook outlined the Grievance Review Board procedures in general terms as a four-step process. The Handbook instructed employees to reference Administrative Policy #415, which was located online. That Policy, in turn, provided a detailed explanation of how the Grievance Review Board operated."
At the time the [plaintiffs] signed waivers of their rights to a judicial forum, they had no idea what the Grievance Review Board process entailed. They were never informed of their right to revoke their waiver. They were not given any documentation regarding the process until almost a month after they began their employment with HVA. Even then, the document they were given described the process in general terms, and pointed them to a website where they could find additional, more detailed information. They cannot be said to have knowingly and voluntarily waived their right to a judicial forum when they were not informed of the alternative procedures until a month after they began working for HVA. Cf. Seawright, 507 F.3d at 971 (explaining extensive efforts taken by defendant employer to inform employees of new dispute resolution procedures before requiring employees to waive all rights to a judicial forum).
The court rejected the provisions shortening the statute of limitations on the same grounds.
NOTICE: This summary is designed merely to inform and alert you of recent legal developments. It does not constitute legal advice and does not apply to any particular situation because different facts could lead to different results. Information here can change or be amended without notice. Readers should not act upon this information without legal advice. If you have any questions about anything you have read, you should consult with or retain an employment attorney.
