Many employers use employment agreements that attempt to shorten the amount of time employees have to bring legal claims against the company. A recent federal appeals court decision serves as an important reminder that these provisions may not always be enforceable.
In a ruling that could influence employment practices across the country, the U.S. Court of Appeals for the Fourth Circuit held that employers cannot use pre-employment agreements to shorten the time employees have to pursue discrimination claims under certain federal employment laws.
While the decision currently applies only within the Fourth Circuit, it highlights an important compliance issue for employers that rely on standardized offer letters, employment agreements, or onboarding documents.
The Issue: Contractual Deadlines vs. Federal Employment Rights
Many employment agreements contain provisions that require employees to bring workplace claims within a shortened period of time—often six months or 180 days. Employers often include these provisions to create certainty and avoid defending stale claims years after an event occurred. However, federal anti-discrimination laws operate under a unique process that requires employees to first file a charge with the Equal Employment Opportunity Commission (EEOC) before filing a lawsuit. That administrative process can take months—or even longer—before an employee receives authorization to proceed to court. The Fourth Circuit concluded that employers cannot use private agreements to effectively cut short that statutory process.
Why This Matters
The court’s decision specifically impacts claims brought under:
- Title VII of the Civil Rights Act of 1964
- The Age Discrimination in Employment Act (ADEA)
These laws govern many of the most common workplace discrimination claims, including allegations involving:
- Race discrimination
- Sex discrimination
- Religious discrimination
- National origin discrimination
- Age discrimination
Because employees must first go through the EEOC process before filing suit, the court found that employers cannot contractually reduce the time available for employees to exercise those rights.
What Employers Should Review
Employers should take this opportunity to review:
Employment Agreements
Examine offer letters, employment contracts, arbitration agreements, and onboarding documents for language that shortens legal filing deadlines.
Multi-State Compliance
Organizations operating in multiple states should be especially cautious. Different courts may interpret these provisions differently, and agreements that were once considered standard may face increasing legal scrutiny.
HR Policies and Onboarding Practices
Employers should ensure HR teams understand which contractual provisions remain enforceable and which may create unnecessary legal risk.
Legal Templates
Many companies continue to use employment agreement templates that were drafted years ago. Those documents should be periodically reviewed to ensure they remain compliant with evolving legal standards.
The Bigger Trend
This decision reflects a broader trend among courts and regulators: increased scrutiny of employment agreements that may limit employee rights under federal workplace laws.
As workplace compliance requirements continue to evolve, employers should view employment agreements as living documents rather than “set it and forget it” paperwork.
Regular reviews of employment policies, onboarding materials, arbitration agreements, and employee handbooks can help organizations reduce risk while maintaining compliance with changing legal requirements.
Forework’s Perspective
Employment compliance doesn’t begin when a claim is filed—it begins with the systems, documents, and processes employers use every day. As regulations and court decisions continue to reshape the workplace landscape, employers should regularly evaluate their onboarding documentation, HR practices, and compliance procedures to ensure they align with current legal requirements. A proactive review today can help prevent costly disputes tomorrow.