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Sixth Circuit Rejects Agreement of Employees to Alternative Dispute Resolution and Shortened Limitations Period as Not Being "Knowing and Intelligent"

April 30, 2010

On Tuesday, the Sixth Circuit Court of Appeals issued a decision in Alonso v. Huron Valley Ambulance, Inc., finding that an employee's agreement to submit employment disputes to a binding dispute resolution process within six months was not "knowing and intelligent" and was therefore unenforceable. In the Alonso case, the plaintiffs each had signed an employment application in which they agreed the exclusive remedy for any employment disputes would be submission to the defendant's internal Grievance Review Board within six months of the event complained of. Despite that agreement, the plaintiffs filed suit against Huron Valley Ambulance alleging violations of various state and federal employment laws. The District Court dismissed, based upon the agreements contained with the application, but the Sixth Circuit reversed and reinstated the lawsuit, finding that the agreements were not "knowing and intelligent."

The court's decision appears to be a reversal of well settled law on this issue. Multiple decisions of Michigan courts have held that agreements to submit disputes to alternative dispute resolution methods or to bring claims within a shortened limitations period are valid and enforceable even when that agreement is contained within the text of an employment application, signed by the prospective employee immediately before they start work. In Alonso , the court found that even though the plaintiffs were educated, gave no indication that they did not understand the waivers they were signing, and even had used the grievance resolution process in the past, the agreement to submit issues to the Grievance Review Board instead of a court was not "knowing and intelligent" because the plaintiffs had not been provided with information about the Board or its procedures at the time the agreement was made.

he Alonso case sets a new standard for employers wishing to limit their exposure to litigation by current and former employees. Employers must do more than simply include language in an employment application in order to establish an alternative dispute resolution process or to shorten the statute of limitations. For more information on what you can do to ensure that your organization's agreements of this type are enforceable, contact a Dykema employment attorney.


As part of our service to you, we regularly compile short reports on new and interesting developments and the issues the developments raise. Please recognize that these reports do not constitute legal advice and that we do not attempt to cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments are always welcome. © 2010 Dykema Gossett PLLC. 

As part of our service to you, we regularly compile short reports on new and interesting developments and the issues the developments raise. Please recognize that these reports do not constitute legal advice and that we do not attempt to cover all such developments. Rules of certain state supreme courts may consider this advertising and require us to advise you of such designation. Your comments are always welcome. © 2018 Dykema Gossett PLLC.