RENDERED: SEPTEMBER 25, 2020; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2019-CA-0885-MR
SHARIECIA HAMILTON APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT v. HONORABLE ANGELA MCCORMICK BISIG, JUDGE ACTION NO. 18-CI-000179
NORTON HEALTHCARE, INC. APPELLEE
OPINION REVERSING AND REMANDING
** ** ** ** **
BEFORE: ACREE, DIXON, AND K. THOMPSON, JUDGES.
ACREE, JUDGE: Shariecia Hamilton appeals from a summary judgment entered
by the Jefferson Circuit Court dismissing her employment-discrimination claims
against Norton Healthcare, Inc. The trial court found Hamilton’s claims brought
under the Kentucky Civil Rights Act (KCRA) were time-barred based on a
contractual six-month limitation period for bringing claims arising from the employment. While this appeal was pending, the legislature amended KRS1
336.700 to contain language which would bar enforcement of the contractual
provision. Therefore, we conclude the provision is not enforceable with respect to
Hamilton’s KCRA claims. We reverse and remand for additional proceedings.
BACKGROUND
In 2015, Hamilton applied for a job with Norton and was hired. When
she applied, she signed a form that limited her ability to bring claims related to her
employment at Norton to six months from the date of any wrongful conduct. The
application contained the following language:
I agree that any claim or lawsuit relating to my service with Norton Healthcare, Inc., or any of its subsidiaries or related entities must be filed no more than six (6) months after the date of the employment action that is the subject of the claim or lawsuit. I waive any statute of limitations to the contrary. My signature certifies that I have read and understand the contents of this employment application, and that I am fully able and competent to complete it and that the statements I made herein are true.
Just below the paragraph was a box with a sentence stating, “By checking this box
I acknowledge that all information submitted is true and complete.” The paragraph
also required Hamilton’s signature and a date. Hamilton checked the box and
signed the page, along with several other pages on the application.
1 Kentucky Revised Statutes.
-2- In 2017, while working as a newborn nurse for Norton, Hamilton
reported a few botched circumcisions that left the newborns with deformities.
After reporting the issue, Norton investigated Hamilton for violating policies and
procedures relating to patient and employee privacy. Following the investigation,
Norton terminated Hamilton.
The following year, Hamilton brought an action for retaliation,
wrongful termination, and race discrimination. Norton responded by stating
Hamilton’s case should be time-barred due to the provision in her employment
application and filed a motion for summary judgment. After considering Norton’s
motion, the trial court agreed, and found Hamilton made a knowing and voluntary
waiver of the statutory limitation period when she signed the provision in her
employment application. The court further found that six months is a reasonable
amount of time to assert the claims at issue in this case. Based on these findings,
the trial court granted Norton’s motion for summary judgment.
STANDARD OF REVIEW
“The proper standard of review on appeal when a trial judge has
granted a motion for summary judgment is whether the record, when examined in
its entirety, shows there is ‘no genuine issue as to any material fact and the moving
party is entitled to a judgment as a matter of law.’” Hammons v. Hammons, 327
-3- S.W.3d 444, 448 (Ky. 2010) (quoting CR2 56.03). “Because summary judgment
does not require findings of fact but only an examination of the record to determine
whether material issues of fact exist, we generally review the grant of summary
judgment without deference to either the trial court’s assessment of the record or
its legal conclusions.” Id. (citing Malone v. Ky. Farm Bur. Mut. Ins. Co., 287
S.W.3d 656, 658 (Ky. 2009)).
Neither party disputes the facts of this case; therefore, this case only
turns on statutory interpretation. Again, our review is de novo. Wheeler &
Clevenger Oil Co., Inc. v. Washburn, 127 S.W.3d 609, 612 (Ky. 2004).
ANALYSIS3
The General Assembly recently addressed this issue through its
enactment of 2019 Ky. Acts ch. 75 (SB 7) (effective June 27, 2019). In pertinent
part, KRS 336.700(3)(c) now provides:
Any employer may require an employee or person seeking employment to execute an agreement to reasonably reduce the period of limitations for filing a claim against the employer as a condition or precondition of employment, provided that the agreement does not apply to causes of action that arise under a state or federal law where an agreement to modify the limitations period is preempted or prohibited, and provided that such an agreement does 2 Kentucky Rules of Civil Procedure. 3 This Court entertained a strikingly similar case earlier this year, Croghan v. Norton Healthcare Inc., --- S.W.3d ----, 2020 WL 742031 (Ky. App. Feb. 14, 2020) (designated for publication). However, that case is currently pending discretionary review by the Supreme Court and, therefore, is not final. Nevertheless, we draw liberally and consistently from that analysis.
-4- not reduce the period of limitations by more than fifty percent (50%)[.]
By enacting the amendment to KRS 336.700, the General Assembly clearly stated
the public policy of this Commonwealth permits an employment contract requiring
an employee to accept a reduced limitation period for a cause of action arising out
of the employment. Furthermore, KRS 336.700(8) provides that “[t]his section
shall apply prospectively and retroactively.” Under the plain language of the
statute, the provision in Hamilton’s employment application is not void as against
public policy.
But, as quoted above, KRS 336.700(3)(c) precludes enforcement of an
employment agreement which reduces the period of limitation by more than 50%
of the statutory time allowed. And, KRS 336.700(8) further provides:
Any provision of an agreement executed prior to June 27, 2019, that violates the requirements of subsection (3)(c) of this section shall be stricken from the agreement and shall not operate to invalidate the entire agreement.
By its express terms, the amended version of KRS 336.700 applies to
all contracts entered before or after the statute’s effective date of June 27, 2019.
The statute prohibits shortening of the limitation period for KCRA claims to less
than two and a half years because, by statute, such claims must be brought within
five years. Any contract provision providing for a shorter limitation period is
unenforceable.
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RENDERED: SEPTEMBER 25, 2020; 10:00 A.M. NOT TO BE PUBLISHED
Commonwealth of Kentucky Court of Appeals
NO. 2019-CA-0885-MR
SHARIECIA HAMILTON APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT v. HONORABLE ANGELA MCCORMICK BISIG, JUDGE ACTION NO. 18-CI-000179
NORTON HEALTHCARE, INC. APPELLEE
OPINION REVERSING AND REMANDING
** ** ** ** **
BEFORE: ACREE, DIXON, AND K. THOMPSON, JUDGES.
ACREE, JUDGE: Shariecia Hamilton appeals from a summary judgment entered
by the Jefferson Circuit Court dismissing her employment-discrimination claims
against Norton Healthcare, Inc. The trial court found Hamilton’s claims brought
under the Kentucky Civil Rights Act (KCRA) were time-barred based on a
contractual six-month limitation period for bringing claims arising from the employment. While this appeal was pending, the legislature amended KRS1
336.700 to contain language which would bar enforcement of the contractual
provision. Therefore, we conclude the provision is not enforceable with respect to
Hamilton’s KCRA claims. We reverse and remand for additional proceedings.
BACKGROUND
In 2015, Hamilton applied for a job with Norton and was hired. When
she applied, she signed a form that limited her ability to bring claims related to her
employment at Norton to six months from the date of any wrongful conduct. The
application contained the following language:
I agree that any claim or lawsuit relating to my service with Norton Healthcare, Inc., or any of its subsidiaries or related entities must be filed no more than six (6) months after the date of the employment action that is the subject of the claim or lawsuit. I waive any statute of limitations to the contrary. My signature certifies that I have read and understand the contents of this employment application, and that I am fully able and competent to complete it and that the statements I made herein are true.
Just below the paragraph was a box with a sentence stating, “By checking this box
I acknowledge that all information submitted is true and complete.” The paragraph
also required Hamilton’s signature and a date. Hamilton checked the box and
signed the page, along with several other pages on the application.
1 Kentucky Revised Statutes.
-2- In 2017, while working as a newborn nurse for Norton, Hamilton
reported a few botched circumcisions that left the newborns with deformities.
After reporting the issue, Norton investigated Hamilton for violating policies and
procedures relating to patient and employee privacy. Following the investigation,
Norton terminated Hamilton.
The following year, Hamilton brought an action for retaliation,
wrongful termination, and race discrimination. Norton responded by stating
Hamilton’s case should be time-barred due to the provision in her employment
application and filed a motion for summary judgment. After considering Norton’s
motion, the trial court agreed, and found Hamilton made a knowing and voluntary
waiver of the statutory limitation period when she signed the provision in her
employment application. The court further found that six months is a reasonable
amount of time to assert the claims at issue in this case. Based on these findings,
the trial court granted Norton’s motion for summary judgment.
STANDARD OF REVIEW
“The proper standard of review on appeal when a trial judge has
granted a motion for summary judgment is whether the record, when examined in
its entirety, shows there is ‘no genuine issue as to any material fact and the moving
party is entitled to a judgment as a matter of law.’” Hammons v. Hammons, 327
-3- S.W.3d 444, 448 (Ky. 2010) (quoting CR2 56.03). “Because summary judgment
does not require findings of fact but only an examination of the record to determine
whether material issues of fact exist, we generally review the grant of summary
judgment without deference to either the trial court’s assessment of the record or
its legal conclusions.” Id. (citing Malone v. Ky. Farm Bur. Mut. Ins. Co., 287
S.W.3d 656, 658 (Ky. 2009)).
Neither party disputes the facts of this case; therefore, this case only
turns on statutory interpretation. Again, our review is de novo. Wheeler &
Clevenger Oil Co., Inc. v. Washburn, 127 S.W.3d 609, 612 (Ky. 2004).
ANALYSIS3
The General Assembly recently addressed this issue through its
enactment of 2019 Ky. Acts ch. 75 (SB 7) (effective June 27, 2019). In pertinent
part, KRS 336.700(3)(c) now provides:
Any employer may require an employee or person seeking employment to execute an agreement to reasonably reduce the period of limitations for filing a claim against the employer as a condition or precondition of employment, provided that the agreement does not apply to causes of action that arise under a state or federal law where an agreement to modify the limitations period is preempted or prohibited, and provided that such an agreement does 2 Kentucky Rules of Civil Procedure. 3 This Court entertained a strikingly similar case earlier this year, Croghan v. Norton Healthcare Inc., --- S.W.3d ----, 2020 WL 742031 (Ky. App. Feb. 14, 2020) (designated for publication). However, that case is currently pending discretionary review by the Supreme Court and, therefore, is not final. Nevertheless, we draw liberally and consistently from that analysis.
-4- not reduce the period of limitations by more than fifty percent (50%)[.]
By enacting the amendment to KRS 336.700, the General Assembly clearly stated
the public policy of this Commonwealth permits an employment contract requiring
an employee to accept a reduced limitation period for a cause of action arising out
of the employment. Furthermore, KRS 336.700(8) provides that “[t]his section
shall apply prospectively and retroactively.” Under the plain language of the
statute, the provision in Hamilton’s employment application is not void as against
public policy.
But, as quoted above, KRS 336.700(3)(c) precludes enforcement of an
employment agreement which reduces the period of limitation by more than 50%
of the statutory time allowed. And, KRS 336.700(8) further provides:
Any provision of an agreement executed prior to June 27, 2019, that violates the requirements of subsection (3)(c) of this section shall be stricken from the agreement and shall not operate to invalidate the entire agreement.
By its express terms, the amended version of KRS 336.700 applies to
all contracts entered before or after the statute’s effective date of June 27, 2019.
The statute prohibits shortening of the limitation period for KCRA claims to less
than two and a half years because, by statute, such claims must be brought within
five years. Any contract provision providing for a shorter limitation period is
unenforceable.
-5- Even without the fifty-percent limitation, we concluded before, and
conclude again, that six months is not a reasonable period to bring a KCRA claim.
See Croghan, supra, 2020 WL 742031, at *5 (cited not for precedent, but to
demonstrate consistency). As a general rule, a contractual period of limitation “is
reasonable if (1) the claimant has sufficient opportunity to investigate and file an
action, (2) the time is not so short as to work a practical abrogation of the right of
action, and (3) the action is not barred before the loss or damage can be
ascertained.” Timko v. Oakwood Custom Coating, Inc., 244 Mich. App. 234, 239-
40, 625 N.W.2d 101, 104 (2001) (quoting Herweyer v. Clark Highway Services,
Inc., 455 Mich. 14, 20, 564 N.W.2d 857, 859 (1997)); see also Davies v.
Waterstone Capital Mgmt., L.P., 856 N.W.2d 711, 718 (Minn. Ct. App. 2014);
Ellis v. U.S. Sec. Assocs., 224 Cal. App. 4th 1213, 1222-23, 169 Cal. Rptr. 3d 752,
757-58 (2014); Holcomb Condo. Homeowners’ Ass’n, Inc. v. Stewart Venture,
LLC, 129 Nev. 181, 300 P.3d 124, 129 (2013); and Hatkoff v. Portland Adventist
Med. Ctr., 252 Or. App. 210, 222, 287 P.3d 1113, 1121 (2012); but see Rory v.
Cont’l Ins. Co., 473 Mich. 457, 470, 703 N.W.2d 23, 31 (2005) (rejecting a
reasonableness inquiry in a contractually-shortened limitation period). If the
amended version of KRS 336.700(3)(c) does not apply, then this test is applicable
to determine the reasonableness of the limitation period provided in Hamilton’s
employment contract.
-6- The six-month period for bringing a claim arising out of the
employment is not enforceable with respect to Hamilton’s KCRA claim.
Therefore, the trial court erred in granting summary judgment for Norton.
CONCLUSION
Based on the foregoing, we reverse the summary judgment entered by
the Jefferson Circuit Court and we remand for additional proceedings not
inconsistent with this Opinion.
ALL CONCUR.
BRIEFS FOR APPELLANT: BRIEF FOR APPELLEE:
Garry R. Adams Donna King Perry Theodore W. Walton Jeremy S. Rogers Abigail V. Lewis Matthew Barszcz Louisville, Kentucky Louisville, Kentucky
-7-