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Kansas Supreme Court: Private parties cannot contractually shorten the statute of limitations for retaliatory discharge when the employee claims she was fired for exercising rights under the KS WCA

ABSTRACT: When the reason for termination falls within the "public policy" exception to the employment-at-will doctrine, parties cannot contractually shorten the two-year Kansas statute of limitations for commencing a retaliatory discharge action.

Pfeifer v. Federal Express Corporation, – Kan. – , (No. 107,133, June 7, 2013), came before the Kansas Supreme Court on certification from the U.S. Court of Appeals for the Tenth Circuit, which was considering a retaliatory discharge claim brought by Cynthia Pfeifer against her former employer, FedEx. She sued 15 months after she was fired, alleging she was terminated for exercising her rights as an injured worker under the Kansas Workers Compensation Act, K.S.A. 44-501 et seq.  Kansas law provides a 2-year statute of limitations for such claims. K.S.A. 60-513(a)(4) (action for injury to rights of another); Burnett v. Southwestern Bell Telephone, 283 Kan. 134, 144, 151 P.3d 837 (2007) (recognizing a 2-year limitations period for retaliatory discharge).

But FedEx argued that Pfeifer's employment contract required her to file suit within 6 months of her termination. The federal district court agreed with FedEx and granted summary judgment. Pfeifer v. Federal Exp. Corp., 818 F. Supp. 2d 1287 (D. Kan. 2011). Pfeifer appealed. The Tenth Circuit certified two questions: (1) Does Kansas law (K.S.A. 60-501) and/or public policy, prohibits private parties from contractually shortening the generally applicable statute of limitations for this type of  action? (2) If not, was the contractual six-month limitation period unreasonable?

The Kansas Supreme Court answered that K.S.A. 60-501 contains no express or implied prohibition against contractual agreements limiting the time in which to sue. However, the Court further ruled that the public policy recognizing that injured workers should be protected from retaliation when exercising rights under the Workers Compensation Act, K.S.A. 44-501 et seq., as articulated in Hysten v. Burlington N. Santa Fe Ry. Co., 277 Kan. 551 (2004) and Coleman v. Safeway Stores, Inc., 242 Kan. 804 (1988), invalidates the contractual provision shortening the time to file suit, because it impairs enforcement of that protection.  (Having thus ruled the contractual provision shortening the employee’s time to file suit invalid, the Supreme Court did not reach the question of whether a six-month period was “reasonable”.)

Conclusion: An employer may in some instances be able to enforce a contractual provision in an employment agreement that limits an employee’s time for filing suit, after employment has terminated. And as the Kansas Supreme Court observed, FedEx has had some success (albeit mixed) in enforcing its six-month limitation clause. Slip opinion at 5-6. But where the underlying issue concerns an issue of “public policy” that can support a tort claim for wrongful termination (as an exception to employment-at-will), the prospects for enforcing this type of provision are limited.

Link to decision here.