Is a provision in an employment contract that shortens the limitations period by which an employee can bring a claim for wages and/or overtime under the Fair Labor Standards Act (FLSA) enforceable? The Sixth Circuit ruled it was not recently in Boaz v FedEx Customer Information Services, Inc, No 12-5319 (August 6, 2013), reversing a district court's judgment.
Boaz started working for FedEx in 1997 and signed an employment agreement including the following provision: "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 occurs first." Subsequently, Boaz filed suit against FedEx asserting claims for overtime compensation under the FLSA and the Equal Pay Act. Although Boaz filed suit well within the limitations period in the statutes, she did so more than six months after her claims accrued and the district court (Magistrate Judge Diane K. Vescovo of the Western District of Tennessee) granted summary judgment to FedEx on the limitations period issue.
The Sixth Circuit reversed and began its analysis by reciting the Supreme Court's long-ago rulings that employees could not waive their rights under the FLSA:
Shortly after the FLSA was enacted, the Supreme Court expressed concern that an employer could circumvent the Act's requirements -- and thus gain an advantage over its competitors -- by having its employees waive their rights under the Act. Such waivers, according to the Court, would "nullify" the Act's purpose of "achieving a uniform national policy of guaranteeing compensation for all work or employment engaged in by employees covered by the Act." The Court therefore held that employees may not, either prospectively or retrospectively, waive their FLSA rights to minimum wages, overtime or liquidated damages.
The Sixth Circuit framed the issue as "whether Boaz's employment agreement operates as a waiver of her rights under the FLSA." Since the FLSA has up to a three year limitation period, the six-month limitation period did reduce Boaz's statutory rights and therefore was invalid.
The Sixth Circuit rejected arguments that agreements to reduce the limitations period for other statutory employment claims had been approved in other cases, such as for race discrimination. First, unlike as to the FLSA, the Supreme Court has ruled that an employee may waive his or her claims of discrimination. Second, part of the rationale for forbidding waivers of FLSA rights is to prevent employers from gaining competitive advantage for doing so, an advantage that would quickly eviscerate the FLSA.
Robert L. Abell
www.RobertAbellLaw.com
