Ellis v. U.S. Security Associates

In Ellis v. U.S. Security Associates (2014) 224 Cal.App.4th 1213, an employment contract provided that any claim against the employer had to be filed "'no more than six (6) months after the date of the employment action that is the subject of the claim or lawsuit.'" The Court of Appeal held that this shortened statute of limitations was unreasonable and, hence, unenforceable. It noted that in various contexts, cases have said that to be enforceable, "a shortened limitation must be reasonable. As Witkin puts it, such provisions will be upheld if the shorter period is 'reasonable, i.e. if it gives sufficient time for the effective pursuit of the judicial remedy.'" (Id. at p. 1222.) "As the rule is generally described, 'a contractually shortened limitation period, in order to be reasonable, must provide a party sufficient time to effectively pursue a judicial remedy. A contractual period of limitation is reasonable if the plaintiff has a sufficient opportunity to investigate and file an action, the time is not so short as to work a practical abrogation of the right of action, and the action is not barred before the loss or damage can be ascertained. On the other hand, a contractual limitation provision that requires the plaintiff to bring an action before any loss can be ascertained is per se unreasonable.' (51 Am. Jur. 2d (2011) Limitation of Actions, 81, p. 552, fns. omitted.)" (Ellis, supra, at p. 1223.) Applying this rule, the Ellis court found the six-month statute of limitations unreasonable because it gave the plaintiff insufficient time to investigate and file her claim. (Id. at p. 1226.)