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PETER A. PEREZ, Plaintiff
vs.
WESTERN-SOUTHERN LIFE INSURANCE COMPANY, a corporation, Defendant
 
Case:
No. 86-CV-40394-FL
 
Location:
UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MICHIGAN, SOUTHERN DIVISION
 
Date:
January 23, 1987, Decided
 
Court:
Stewart A. Newblatt, United States District Court.
 
Author:
The Hon. Justice Newblatt
 

Before Court is defendant's motion for summary judgment pursuant to Rule 56 Fed.R.Civ.P. on the ground that plaintiff's action is barred by a six-month limitations period set forth in plaintiff's employment contract. The relevant facts follow: Plaintiff Peter Perez was employed as an insurance agent for defendant Western-Southern Life Insurance Company for about ten years until he was terminated in May 1984. His employment was subject to a written employment contract (Def. Ex.A) which stated in part:

YOU AGREE:

c. Not to commence any action or suit relating to your employment with Western-Southern more than six months after the date of termination of such employment and to waive any statute of limitations to the contrary.

On July 8 1986 plaintiff brought suit against defendant alleging that his termination was in violation of the Michigan Elliott-Larsen Civil Rights Act MCLA SEC. 27.2101 as discrimination on the basis of national origin and a breach of an implied employment contract to terminate for just cause only.

In Camelot Excavating v. St. Paul Ins. 410 Mich.118 (1981) the Michigan Supreme Court dealt with the validity of contractual time periods shorter than the statute of limitations for bringing actions.

Absent any statute to the contrary the general rule followed by most courts has been to uphold provisions in private contracts limiting the time to bring suit where the limitation is reasonable even though the period specified is less than the applicable statute of limitations.

The boundaries of what is reasonable under the general rule require that the claimant have sufficient opportunity to investigate and file an action that the time not be so short as to work a practical abrogation of the right of action and that the action not be barred before the loss or damage can be ascertained.

(Id. at 126-27) (emphasis added).

Although Court is unaware of any Michigan law dealing with the issue it concludes that defendant's motion should be granted even though neither party dealt with the issue of whether the six-month period of limitations imposed by the contract was reasonable. Court finds that it is reasonable especially in the light of the six-month period of limitations imposed by section 301 of the Labor Management Relations Act 29 U.S.C. SEC. 301. *fn1 Moreover there is no state statute to the contrary. *fn2

Plaintiff makes several arguments. First plaintiff argues that his agent's agreement is an adhesion contract in that there was no discussion negotiation or give and take and hence it should be unenforceable. In Barck v. Grant State Bank 137 Mich.App.440 445-46 (1984) a panel of the Michigan Court of Appeals stated:

The two-pronged test for determining whether a contract is one of adhesion and unenforceable is:

'(1) What is the relative bargaining power of the parties their relative economic strength the alternative sources of supply in a word what are their options?; (2) is the challenged term substantively reasonable?' Allen v. Michigan Bell Telephone Co. 18 Mich.App.632 637; 171 N.W.2d 689 (1969) lv. den. 383 Mich.804 (1970).

Even if the contract is adhesive under the first prong still the challenged term is enforceable if it is substantively reasonable and not oppressive or unconscionable. Allen supra p. 638; Brown v. Siang 107 Mich.App.91 107; 309 N.W.2d 575 (1981).

In this case there are no facts to support plaintiff's claim that the agreement was an adhesion contract. Plaintiff clearly had an option not to accept employment the terms of which were unreasonable. Instead plaintiff chose to sign the agreement thereby accepting employment. More fundamentally the challenged term as indicated above is not substantively unreasonable oppressive or unconscionable. *fn3

Next plaintiff maintains that he has an independent right apart from the remedial machinery provided by statute to pursue his statutory discrimination claim in this court and that plaintiff's claim is subject to the three-year limitation period. There is no reason to dispute this assertion. However it is irrelevant to the issue. If plaintiff means that his civil rights charge filed in 1984 somehow tolled the six-month limitations period there is no law to support this. Moreover this would be contrary to Michigan law. If plaintiff cannot toll the running of the three-year statute because he filed a claim with a state administrative agency Barczak v. Rockwell International Corp. 68 Mich.App.759 (1976) there is no reason to believe he could do it in this case involving a six-month period. *fn4

Finally plaintiff argues that he did not expressly waive the limitations period for his statutory discrimination claims under Elliott-Larsen. Court agrees with defendant that the cases relied upon by plaintiff do not support his argument because "they relate not to a contractual shortening of limitations period but to a complete waiver of any cause of action."

Therefore for the reasons just stated defendant's motion for summary judgment is GRANTED and this case is HEREBY DISMISSED.

 
Notes:

*fn1 Shapiro v. Cook United Inc. 762 F.2d 49 (6th Cir. 1985); Del Costello v. International Brotherhood of Teamsters 422 U.S. 151 (1983).

*fn2 Though the three-year period of limitations for injuries to a person under MCLA SEC. 600.5805(7) is applicable to employees alleging discrimination in employment practices Slayton v. Michigan Host 144 Mich.App.535 (1985) there is nothing in either the Elliott-Larsen Act or SEC. 600.5805(7) which prohibits a shorter reasonable period agreed upon by the parties nor which evinces any state public policy to the contrary.

*fn3 Defendant argues that plaintiff's argument is logically inconsistent because plaintiff seeks to enforce the implied "just cause" term of the contract and at the same time avoid the shortened limitation period of the same contract. Defendant's statement is premised on the incorrect assumption that a Toussaint implied contract is made up of one source - such as the contract in this case.

*fn4 Of course this ruling in no way is intended to apply to an asserted federal cause of action presented to a federal or state agency which is required to issue a "right-to-sue" letter.