Tuesday, February 2, 2010

Court of Appeal Holds That Employment Agreements Shortening The Deadline To File Suit Violate Public Policy And Are Unenforceable

By Christopher S. Andre

On January 28, 2010, the California Court of Appeal issued its decision in Maria Pellegrino v. Robert Half International, Inc., holding that employment agreements shortening to six months the deadline for employees to bring claims arising out of their employment violate public policy and are therefore unenforceable. The court held also that the staffing agency's account executives did not qualify as exempt administrative employees.

According to the court's opinion, the plaintiff employees were employed by RHI as account executives. Their duties involved recruiting candidates to be placed as temporary employees, placing candidates with RHI clients, and new business development. The account executives filed suit against RHI alleging RHI violated wage and hour laws applicable to non-exempt employees, such as the requirements for paying overtime and for providing meal periods.

As part of its defense, RHI contended the account executives' claims were barred by employment agreements requiring them to file suit within 6 months of the termination of their employment and because the account executives were in any event properly classified as exempt employees. The trial court rejected RHI's defenses, and an appeal followed.

In a lengthy opinion, the Court of Appeal held the 6 month limitation period of the employment agreements violates Labor Code section 219 and violates public policy and are unenforceable because, according to the court, the 6 month limitation period is tantamount to an unenforceable waiver of non-waivable rights. The court held also the account executives did not qualify as exempt employees because, in the court's view, their duties were not sufficiently related to the administrative operations of RHI but were in the nature of "production" work or sales.

Click here to download and read the opinion.