Ashley Ellis began working for U.S. Security Associates as a security guard in September 2009.  In early 2010, Ellis's direct supervisor was Rick Haynes.  Haynes also supervised his wife.  Haynes called Ellis and proposed that she join him and his wife in sexual activities. Ellis rejected the proposition.  Later that day, Haynes texted Ellis at work and told her that he was sorry she did not want to be lovers. 

Thereafter, Haynes subjected Ellis to a pattern of offensive and unwanted sexual behavior, including making suggestive sexual remarks to her, telling her about his sexual activities, and asking her to join he and his wife in sexual activities.  Multiple female employees complained to management that Haynes was sexually harassing them and Haynes was sent to training, but the harassment continued.  Ellis notified the company's headquarters in November 2010, and Haynes was terminated in December 2010. 

Ellis filed a complaint with the Department of Fair Employment and Housing ("DFEH") and subsequently filed a complaint against U.S. Security and Haynes for, among other things, discrimination,  harassment, failure to maintain an environment free from harassment, and retaliation under the Fair Employment and Housing Act ("FEHA").  In response, U.S. Security filed a motion for judgment on the pleadings based on the fact that Ellis signed an employment application that contained the following language:

"I understand, agree and acknowledge that any claim or lawsuit relating to my service with [U.S. Security] must be filed no more than six (6) months after the date of the employment action that is the subject of the claim or lawsuit.  I waive any statute of limitations to the contrary."

Ellis argued the contract provision in the application was unenforceable as a matter of law.  The trial court granted U.S. Security's motion for judgment on the pleadings and the matter was dismissed.  Ellis appealed.

The Court of Appeal held that the six months limitation provision in the application for employment was not enforceable, unreasonable, and against public policy.  The Court noted that it is the public policy of FEHA to "protect and safeguard" the rights of employees against discrimination, and to provide effective remedies that will eliminate discriminatory practices.  In order to bring a claim under FEHA, an employee must file an administrative claim with the DFEH, and has one year from the date of the unlawful act to do so.  Once the employee receives a right-to-sue letter from the DFEH, he or she has one year to file suit. 

In some circumstances, parties may agree to shorten a statute of limitations period so long as the shortened period is reasonable, i.e., gives sufficient time to effectively pursue a judicial remedy.  However, courts generally only recognize shortened limitations periods in the context of straightforward transactions, such as a breach of contract, where the triggering event for the statute of limitations is immediate and obvious.  They are not generally recognized in employment discrimination claims.

The Court analyzed the public policies underlying FEHA, and held that a six-month limitations period violated the policies and was too short.  The current FEHA statute of limitations provides an effective remedy for vindicating the rights of employees, and the provision in Ellis's employment application seriously truncated that period of time.  The shortened period of time also thwarts a critical aspect of FEHA- administrative enforcement.  Filing charges with the DFEH is the only remedy for some employees, and a six-month statute of limitations would require Ellis to file suit before the DFEH had an opportunity to meaningfully participate by, for instance, conducting an investigation.  It could also force an employee to file suit before she exhausted her administrative remedies, which is a jurisdictional prerequisite to filing suit.  Thus, the Court of Appeal reversed the grant of judgment on the pleadings in favor of U.S. Security.     

Note: 

The Court of Appeal declined to address the issue of whether a FEHA statute of limitations can ever be shortened, but stated: "[I]t may be that any attempt to shorten the limitation provision in the FEHA statutory scheme would be against the law."  Based on the Court's analysis in this case, it is difficult to imagine in what circumstances a shortened FEHA statute of limitations would be upheld.  

Ellis v. U.S. Security Associates (2014) __ Cal.App.4th __ [2014 WL 1229038].