How to Reduce Your Exposure to Lawsuits

Which Claims Should Be Included in the Waiver?

The employment-related claims that subject employers to the most potential exposure are those that carry lengthy limitations periods and no damages caps. For example, 42 U.S.C. ' 1981 ('Section 1981'), which prohibits race discrimination and retaliation, has a four (4)-year statute of limitations and does not cap emotional distress or punitive damages. See Jones v. R.R. Donnelly & Sons, Co., 541 U.S. 369 (2004). Moreover, ' 1981 claims may be brought against supervisors in their individual capacities. See, e.g., Daulo v. Commonwealth Edison, 892 F. Supp. 1088, 1091 (N.D. Ill. 1995). State common law also provides a source for employment-related breach of contract and tort claims, such as defamation, intentional infliction of emotional distress, negligent hiring / retention / supervision, and invasion of privacy (the 'Common Law Claims'). While the elements and limitations periods of Common Law Claims differ from state to state, they generally carry a one (1) to four (4)-year limitations period and unlimited emotional distress and punitive damages. See, e.g., 12 Okl. St. Ann. ' 95(A)(4) (1-year statute of limitations for certain torts under Oklahoma law); 735 ILCS 5/13-202 (2-year limitations period for certain torts under Illinois law); Miss. Code Ann. ' 15-1-49 (3-year statute of limitations for certain torts under Mississippi law); 21 R.C. ' 2305.09 (4-year statute of limitations for certain torts under Ohio law). Many state anti-discrimination statutes also have limitations periods in excess of six (6) months, do not cap damages, and do not require an employee to exhaust administrative remedies through the filing of an administrative charge with a state agency (the 'State Anti-Discrimination Claims'). See, e.g., Mich. Comp. Laws ' 37.2101, et seq. The courts have consistently upheld an employer's right contractually to reduce to six (6) months the limitations periods for '1981 Claims, Common Law Claims, and State Anti-Discrimination Claims. See, e.g., Thurman v. DaimlerChrystler, Inc., 397 F.3d 352, 358-59 (6th Cir. 2004) (affirming summary judgment for the employer on the plaintiffs' claims of sex discrimination under Michigan's Elliott-Larsen Civil Rights Act, race discrimination under ' 1981, and various state common law claims, based on six-month limitations provision in employment agreement); Soltani v. Western & Southern Life Ins. Co., 258 F.3d 1038, 1044-45 (9th Cir. 2001) (affirming summary judgment for the employer on the plaintiffs' common law wrongful termination claim based on six-month limitations provision in employment agreement); Taylor v. Western & Southern Life Ins. Co., 966 F.2d 1188, 1206 (7th Cir. 1992) (affirming the grant of the employer's motion to dismiss the plaintiffs' Section 1981 claim based on six-month limitations provision in employment agreement); Vincent v. Comerica Bank, No. H-05-2302, 2006 WL 1295494, at *5-6 (S.D. Texas May 10, 2006) (slip copy) (granting employer's motion for summary judgment on plaintiff's common law defamation claim based on six-month limitations provision in employment application); Mayes v. DaimlerChrysler, No. 05-70249, 2005 WL 2562780, at *6-7 (E.D. Mich. Oct. 10, 2005) (granting employer's motion for summary judgment on the plaintiff's '1981, common law retaliatory discharge, and state statutory sex discrimination claims, based on six-month limitations provision in employment application). Thus, such claims should be included in the Waiver.