Tag Archives: statute of limitations

May 23, 2016

Limitations Period For Constructive-Discharge Claim Starts When Employee Gives Notice of Resignation

Dawson_MBy Micah Dawson

The Supreme Court made clear today that the filing period for a constructive-discharge claim begins to run when the employee gives notice of his or her resignation. In a 7-to-1 decision, the Court favored the five-circuit majority who recognized such timeline and rejected the Tenth Circuit’s reasoning that the clock begins to run on the date of the “last discriminatory act.” Green v. Brennan, 578 U.S. ___, (2016). Although the case involved a federal employee, the Court noted that the Equal Employment Opportunity Commission (EEOC) treats federal and private sector employee limitations periods the same so this ruling should affect constructive-discharge claims against private employers as well.

Discriminatory Act That Triggers Limitations Clock 

In the case before the Court, Marvin Green, a postmaster in Colorado, claimed he was denied a promotion because of his race. A year after that matter was settled, Green filed an informal EEO charge with the Postal Service alleging that he was subjected to retaliation for his prior EEO activity due to his supervisor threatening, demeaning, and harassing him. After the Postal Service’s EEO Office completed its investigation of his allegations, he was informed he could file a formal charge, but he failed to do to.

A few months later, Green was investigated for multiple infractions, including improper handling of employee grievances, delaying the mail, and sexual harassment of a female employee. Green was placed on unpaid leave during the investigation. Federal agents quickly concluded that Green had not intentionally delayed mail, but neither Green nor his union representative was told. Instead, the Postal Service began negotiating with Green’s union representative to settle all the issues against Green, resulting in Green signing a settlement agreement in December 2009 that included giving up his postmaster position. On February 9, 2010, Green submitted his resignation which was to be effective March 31.

During that time, Green filed multiple charges with the Postal Service’s EEO Office. By regulation, federal employees must contact an equal employment opportunity officer in their agency within 45 days of “the date of the matter alleged to be discriminatory” before bringing suit under Title VII. Green’s allegations included that he had been constructively discharged by being forced to retire.

Green eventually sued the Postal Service in federal court in Denver. The district court dismissed Green’s constructive discharge claim, ruling that he had not contacted an EEO counselor about his constructive-discharge claim within 45 days of the date he signed the settlement agreement in December. On appeal to the Tenth Circuit Court of Appeals, Green argued that the 45-day limitations period did not begin to run until he announced his resignation, even though that was months after the last alleged discriminatory act against him. The Tenth Circuit disagreed with Green, ruling that the clock began to run on the date of the “last discriminatory act” giving rise to the constructive discharge, as two other circuits have held.

Limitations Period Begins When Employee Gives Notice of Resignation 

On appeal to the Supreme Court, Green asserted that the statute of limitations began when he actually resigned due to constructive discharge, the act that gave rise to his cause of action, which was consistent with the rulings of numerous other Courts of Appeals. Interestingly, the Court agreed with the position taken by the Postal Service, which was different from the Tenth Circuit’s decision, ruling that the limitations period for a constructive-discharge claim begins to run when the employee gives notice of his resignation.

In an opinion written by Justice Sotomayor, the Court explained that “the ‘matter alleged to be discriminatory’ in a constructive-discharge claim necessarily includes the employee’s resignation.” The Court noted that to the “standard rule” governing statutes of limitations, the “limitations period commences when the plaintiff has a complete and present cause of action.” It means that period begins when the plaintiff “can file suit and obtain relief.” In effect, a constructive-discharge claim is like a wrongful-discharge claim which accrues only after the employee is fired. With nothing in Title VII or its regulations to the contrary, the Court therefore found that the limitations period should not begin to run until after the discharge itself.

So precisely when does an employee resign for purposes of triggering the limitations period for a constructive-discharge claim? The Court ruled that the limitations period begins on the day the employee tells his employer of his resignation, not the employee’s actual last day of work.

The Court did not decide the factual question of when Green actually gave notice of his resignation to the Postal Service, sending the matter back to the Tenth Circuit to determine that fact.

Significance of Decision for Employers

The practical effect of the Court’s ruling is to extend the period in which an employee may allege a constructive discharge beyond the limitations period for the underlying discriminatory acts that gave rise to the resignation. Hypothetically, employees who resign may be able to bootstrap any alleged discriminatory act during the course of their employment to their decision to abandon employment. In his dissent, Justice Thomas further opined that a discrimination victim may extend the limitations period indefinitely simply by waiting to resign. Yet the Court believed such concerns to be overblown, doubting that a victim of employment discrimination would continue to work under intolerable conditions only to extend the limitations period for a constructive-discharge claim. Nonetheless, even if the applicable Title VII limitation period (typically 180 or 300 days for private employers) for the underlying discrimination has passed, an employee may still have a timely claim for constructive discharge under the Court’s rule.

Time will tell if Justice Thomas’s concerns were more realistic that his colleagues believed.

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December 26, 2013

ERISA Plan’s Limitation Period Is Enforceable, Says U.S. Supreme Court

By Elizabeth Nedrow 

The U.S. Supreme Court recently issued a decision that provides some welcome guidance to insurers and employers sponsoring ERISA employee benefit plans.  The Court upheld a three-year limitations period in a long term disability plan.  The terms of the plan required participants to file a lawsuit to recover benefits within three years after “proof of loss.”  Heimeshoff v. Hartford Life & Accident Ins. Co.,No. 12-729, 571 U.S.  ___ (Dec. 16, 2013).  The Court ruled that because ERISA itself does not specify a limitations period, the plan’s three year deadline was reasonable and therefore enforceable.  

Benefit Plan Participant Filed Lawsuit After Benefits Were Denied 

Julie Heimeshoff, a senior public relations manager for Wal-Mart Stores, was a participant in a long term disability plan administered by Hartford Life & Accident Insurance Company (Hartford).  In 2005, she filed a claim for disability benefits following a diagnosis of lupus and fibromyalgia.   On her claim form, her rheumatologist listed her symptoms as extreme fatigue, significant pain and difficulty in concentration.  Hartford denied her claim after her rheumatologist failed to respond to its requests for more information.  In 2006, Heimeshoff provided Hartford with an evaluation from another physician who also determined that she was disabled.  Hartford retained a physician to review Heimeshoff’s records who concluded that she was able to perform the activities of her sedentary job.  Hartford again denied her disability claim.  

After granting Heimeshoff an extension to the appeal deadline to provide additional evidence and retaining two additional physicians to review her claim, Hartford issued its final denial of benefits on November 26, 2007.  On November 18, 2010, Heimeshoff filed suit in district court seeking review of her denied claim under ERISA’s judicial review provision, known as ERISA Section 502.  Hartford and Wal-Mart asked the court to dismiss her suit because she did not file the case within the limitations period provided for in the plan, namely within three years after the time that written proof of loss is required to be furnished to Hartford.  The district court agreed that the lawsuit was untimely and dismissed her case.  On appeal, the Second Circuit affirmed.  The U.S. Supreme Court agreed to hear the case in order to resolve a split among the Courts of Appeal on the enforceability of an ERISA plan’s contractual limitations period. 

ERISA Contractual Limitations Provisions Should Be Enforced As Written 

The long-term disability plan at issue stated that legal action against Hartford could not be taken more than three years after the time that written proof of loss is required to be furnished according to the terms of the policy.  Written proof of loss is necessarily due before Hartford and the participant complete the internal review process and before a plan participant is notified of a final denial of benefits which is necessary before filing a lawsuit in court.  The result of this contractual limitations period is that a participant has less than three years to file a lawsuit in court after learning that their benefit claim has been finally denied. 

In reviewing whether to enforce this limitations period, the Supreme Court relied on well-established precedent which states that in the absence of a limitations period provided by a controlling statute, a provision in a contract may validly limit the time for parties to bring an action on such contract to a period less than that prescribed in the general statute of limitations as long as the shorter period is reasonable.  The Court noted that ERISA does not specify a statute of limitations.  Consequently, the Court ruled that a participant and a plan may agree by contract to a particular limitations period as long as it is reasonable.  

Heimeshoff argued that the contractual limitations period at issue was not reasonable because it began to run before a claimant could exhaust the internal review process which is required before seeking judicial review.  The Court unanimously disagreed, concluding that the three-year limitations period from the date that proof of loss is due was not unreasonably short and therefore, was enforceable.  Although Hartford’s administrative review process took longer than usual, Heimeshoff still had approximately one year to file suit before the limitations period was up.  Because Heimeshoff filed her lawsuit more than three years after her proof of loss was due, as required contractually by the plan, her complaint was time barred.  Therefore, the Court upheld the dismissal of Heimeshoff’s suit. 

Significance for Employee Benefit Plans 

The Court’s decision is welcome news for insurers and employers who want efficient resolution of ERISA claims disputes.  Plan documentation should be reviewed, and where appropriate, language should be added or clarified to provide a reasonable limit on the time a participant has to bring a lawsuit to challenge a denied claim for benefits. 


Disclaimer: This article is designed to provide general information on pertinent legal topics. The statements made are provided for educational purposes only. They do not constitute legal advice and are not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of your legal counsel.


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