ROBERTSON v. DAIMLERCHRYSLER CORPORATION
Case Details
- Citation
- 465 Mich. 732
- Judge(s)
- Corrigan, C.J., and Taylor, and Young, JJ., concurred with Markman, J.; Kelly, J., concurred with Cavanagh, J.
- Procedural Posture — the stage the case had reached
- appeal
- State
- Michigan
Related Laws
No specific laws identified for this ruling.
Claim Types
Outcome
The Michigan Supreme Court vacated the Court of Appeals' decision and remanded the case to the magistrate for reconsideration of whether the claimant's mental disability arose from actual employment events and whether his perception of those events was objectively grounded in fact, establishing a new legal standard for compensability of mental disabilities under MCL 418.301(2).
Excerpt
ROBERTSON v DAIMLERCHRYSLER CORPORATION Docket No. 116276. Argued November 7, 2001 (Calendar No. 6). Decided April 9, 2002. Warren M. Robertson, Jr., sought worker’s compensation benefits for a mental disability. A magistrate denied the claim, finding that the plaintiff had mispereeived an actual work event and, thus, failed to establish a disability under the act. The Worker’s Compensation Appellate Commission affirmed. The Court of Appeals, Collins, P.J., and Hood and Doctoroff, JJ., in an unpublished order, vacated the decision of the wcac and remanded the case to the magistrate, finding the plaintiffs perception of work events to be irrelevant in a mental disability analysis. (Docket No. 222363). The defendant appeals. In an opinion by Justice Markman, joined by Chief Justice Corrigan, and Justices Taylor and Young, the Supreme Court held: To satisfy the mental disability requirements under the second sentence of MCL 418.301(2), a claimant must demonstrate that there has been an actual employment event leading to the mental disability, i.e., that the event in question occurred in connection with employment and actually took place, and that any perception or apprehension of the actual employment event was not unfounded, i.e., that the perception or apprehension was grounded in fact or reality. The statutory language at issue states that “[mjental disabilities shall be compensable when arising out of actual events of employment, not unfounded perceptions thereof.” By requiring that the claimant’s perception of actual employment events be not unfounded, this Court gives effect and meaning to the statutory words “not unfounded perceptions thereof.” Moreover, in determining whether there has been an actual employment event leading to a mental disability, and a perception of that event that is not unfounded, the inquiry must be conducted under an objective standard. Under an objective standard, the factfinder must first determine whether actual events of employment indeed occurred. Then, in analyzing whether a claimant’s, perception of the actual events of employment had a basis in fact or reality, the factfinder must apply an objective review by examining all the facts and circumstances surrounding the actual employment events in question to determine whether the claimant’s perception of such events was reasonably grounded in fact or reality. Justice Weaver, concurring, stated that because the majority clearly explains how the Court in Gardner v Van Burén Pub Schs, 445 Mich 23 (1994), incorrectly construed MCL 418.301(2) by reading the phrase “not unfounded perceptions thereof’ out of the statute, its response to the dissent in part iv is unnecessary. Vacated and remanded. Justice Cavanagh, joined by Justice Kelly, dissenting, stated that the doctrine of stare decisis mandates the reaffirmance of Gardner v Van Buren Pub Schs, 445 Mich 23 (1994), and affirmance of the Court of Appeals decision. Under Gardner a compensable mental disability claim arises when an actual event of employment, not an imaginary or hallucinatory one, significantly contributes to, aggravates, or accelerates a mental disability. The Court noted that almost all mental disabilities are based on unfounded perceptions of actual events, and correctly concluded that if MCL 418.301(2) is read to prohibit compensation for claims based on unfounded perceptions of actual events, as opposed to prohibiting compensation for claims based on imagined or hallucinatory events, the statute would make little sense. Gardner invalidated an earlier interpretation of the statute that allowed a compensable disability to be based on imagined events and did away with any need to prove a factual causal connection between the disability and the employment events. It concluded that the Legislature clearly intended to eliminate this interpretation by requiring objective actual events and a significant causal connection. It is illogical to conclude that a person with a mental disability must comply with an objective reasonableness test when the entire basis of a mental disability is the inability to reason. This interpretation supports the basic premise that employers take employees as they are. Absent an explicit legislative mandate, this premise should be followed for mental disabilities as well as physical infirmities. The relevant inquiry under § 301(2) is, given actual events and a particular claimant, with all the claimant’s preexisting mental frailties, can the actual events objectively be said to have contributed to, aggravated, or accelerated the claimant’s mental disability in a significant manner? The doctrine of stare decisis mandates Gardner's reaffirmance. Because the Legislature has not reacted to the Gardner Court’s statutory interpretation in the eight years since it was decided, it may be concluded that the Legislature is satisfied with the Gardner inteipretation and the majority’s interpretation is not only incorrect, but unnecessary. Zamler, Mellen & Shiffman, P.C. (by Paul S. Rosen) (Daryl Royal, of counsel), for the plaintiffappellee. Lacy & Jones (by Michael T. Reinholm) for the defendant-appellant. Amici Curiae: Conklin, Benham, Ducey, Listman & Chuhran, P.C. (by Martin L. Critchell), for the Michigan Self-Insurers Association. Lacey & Jones (by Gerald M. Marcinkoski) for the Michigan Insurance Federation. Clark, Hill, P.L.C. (by F. R. Damm, Paul E. Scheidemantel, and Mary C. Dirkes), for the Michigan Manufacturers Association. Jill S. Mulder, Assistant General Counsel, for the Accident Fund Company. Markman, J. In this worker’s compensation case, we must determine whether the Court of Appeals properly vacated the Worker’s Compensation Appellate Commission (WCAC) order affirming the magistrate’s decision denying worker’s compensation benefits. In part, the magistrate considered plaintiff’s perceptions of an actual work event in deciding whether plaintiff had established a compensable mental disability injury under MCL 418.301(2). The Court of Appeals determined that such considerations by the magistrate were irrelevant to a mental disability analysis. We vacate the Court of Appeals order and remand this matter to the magistrate for analysis under the statutory framework as set forth below. I FACTS AND PROCEEDINGS Plaiutiff began working for defendant employer in 1973, working at various auto assembly plant locations. In 1984, he began working at defendant’s Sterling Heights Assembly Plant. Plaintiff worked on the assembly line in the paint department on what he described as the “sealer deck or decking job.” Because plaintiff was also artistically talented, he was placed in the Product Quality Improvement Partnership (pqip) department and given the position of “artist.” In the early part of 1994, plaintiff was assigned a new supervisor, George Asher. According to plaintiff, Asher began “needling” plaintiff to use his artistic abilities and “redo” some paintings on Asher’s boat. Plaintiff stated that he told Asher that he would do the work on his own time at his home. However, according to plaintiff, Asher insisted that it be done on company time. Plaintiff refused to do this. Later that year, plaintiff, on his own time, worked on a personal project for another executive employed by defendant. Plaintiff completed this project for this executive before a 1995 New Year’s Eve party. According to plaintiff, that is when “things got out of hand” with Asher. Plaintiff stated that in February 1995, Asher disciplined plaintiff for having improperly taken a personal day off two months earlier. Several days later, plaintiff and a fellow employee, A1 Sipes, were called into Asher’s office. Asher informed the two men that they would no longer be working in the PQIP department, and that they were to return to their previous designated positions. Plaintiff stated that he then “lost it.” Specifically, plaintiff admitted that he and Asher exchanged harsh words. Asher claimed that plaintiff backed him into a comer with a 2 x 2 piece of wood and threatened him and his family. Plaintiff left work following this incident. Later that evening, plaintiffs wife called the plant manager, Frank Slaughter, to inquire into these events. Slaughter informed plaintiffs wife that the pqip department had been discontinued and that plaintiff had been asked to return to his previous position. Slaughter further requested that plaintiffs wife have plaintiff return to work the following Monday morning. However, when plaintiff returned to work, he was escorted from the building. Plaintiff had been given a five-day suspension for using abusive language and disorderly conduct. Plaintiff later stated that he then went “out of control” and “would probably have killed someone” if he had not received help. He admitted himself to an inpatient mental health facility that same day, and remained in the facility for about six weeks. Upon release, he continued receiving psychiatric treatment, and never returned to work. In August 1995, plaintiff filed a claim for worker’s compensation benefits. At the hearing on plaintiff’s claim, he testified with regard to several precipitating factors for his hospitalization including: “Chrysler Commercial Art Supervisor wanted me to do work on his boat on company time. I refused and now I’m in trouble at work. I’m very depressed” and “I worked hard to get the status and overnight this individual [Mr. Asher] wiped it out.” Additionally, Dr. Dabbagh, plaintiff’s mental health provider, concluded that the conflict between defendant and Mr. Asher was the pivotal reason for plaintiffs depression and anger. In part, Dr. Babbagh stated that there was a conflict between him and the supervisor, and for that reason, he was removed from his job and put on the line after about eighteen [years], if I recall, from working on that job, and that’s what really basically has precipitated his episode of depression and anger. Slaughter testified that plaintiffs transfer from PQIP to his previous position was the result of the department having been shut down. Specifically, he stated that in late 1994 and early 1995, new car launches at defendant company were going poorly. To compound this problem, employees were working considerable overtime and there were significant equipment problems. Thus, costs were high. To solve this problem, defendant reduced overtime and cut “nonstandard” positions. Plaintiffs position was “nonstandard”; thus, he was returned to his prior position. Slaughter asserted that this decision was his own and that he did not consult with Asher, who confirmed that he had not been consulted about plaintiffs transfer. The worker’s compensation magistrate determined that plaintiff “failed to establish that he is or was disabled as defined by the act.” According to the magistrate, the evidence showed that “any conflict between George Asher and plaintiff was clearly the product of plaintiff’s expansive mind and is a misperception.” The magistrate further stated that the “credible” testimony of defendant’s witnesses indicated that there had been no retaliatory intent behind plaintiff’s reassignment, but instead that it represented a “simple economic business decision by upper management.” Because the actual event of plaintiffs reassignment to the assembly line could not be “seen as significantly contributing to, aggravating, or accelerating plaintiffs mental disability,” the magistrate concluded that plaintiff had failed to establish that he was disabled as defined by the act. Upon review, the wcac stated that the job transfer had been the only actual event, and that there was no evidence of any animus on Asher’s part directed toward plaintiff. Thus, the WCAC affirmed the magistrate’s decision. The Court of Appeals vacated the decision of the WCAC and remanded the case to the magistrate. Robertson v Chrysler Corp, unpublished order, entered January 11, 2000 (Docket No. 222363). The Court stated that the magistrate’s decision that the actual work event did not significantly contribute to or aggravate plaintiff’s mental disability was erroneous because it “appears to have been influenced by his findings that the plaintiff misperceived the reason for the reassignment, and that the reassignment was the result of business considerations and was not retaliatory.” In the view of the Court of Appeals, “whether plaintiff correctly or incorrectly perceived or interpreted the events at work is irrelevant, as is the existence of a legitimate business reason for the reassignment.” While such a conclusion is consistent with a previous decision of this Court, we believe that decision wrongly interpreted Michigan law and must be overruled. H STANDARD OP REVIEW Whether a worker’s compensation claimant’s perceptions of actual events of employment are to be considered in deciding whether a claimant has established a compensable mental disability under MCL 418.301(2) is a matter of statutory interpretation. Matters of statutory interpretation are questions of law. In re MCI Telecommunications, 460 Mich 396, 413; 516 NW2d 164 (1999). This Court reviews questions of law under a de novo standard of review. DiBenedetto v West Shore Hosp, 461 Mich 394, 401; 605 NW2d 300 (2000). m. DISCUSSION A. DEVELOPMENT OF THE LAW From its inception in 1912, Michigan’s worker’s compensation system has provided benefits for employees who are injured in the course of their employment. The initial worker’s compensation act, however, did not expressly provide compensation for employees who suffered mental disabilities. Despite this, our Court determined that coverage existed for mental disability injuries because such injuries were merely a variant of personal injury within the scope of the act. See, e.g., Klein v Len H Darling Co, 217 Mich 485; 187 NW 400 (1922). Thus, if the mental disability arose out of, and in the course of, an employee’s employment, that employee would be covered under the act. This can first be seen in Klein where the employee died as a result of severe emotional shock experienced after he accidentally dropped a radiator on the head of a co-worker. Id. at 487. The decedent believed, erroneously, that he had killed the other worker, and this belief caused him such mental strain that he lapsed into delirium and died. Id. at 488. This Court held that the shock received by the decedent from witnessing this injury constituted an accidental personal injury within the meaning of the worker’s compensation act and that the claimant, the decedent’s wife, therefore was entitled to compensation for his death. Id. at 494. The next significant case in the development of compensable mental disabilities is Rainko v Webster Eisenlohr, Inc, 306 Mich 328, 332; 10 NW2d 903 (1943). In Rainko, this Court expanded the scope of compensability to cases in which no outward physical injury occurred to either the employee or to another employee as in Klein. Specifically, this Court stated that “[i]t is not necessary to establish physical injury (resulting in) outward evidence of violence or trauma to justify an award of compensation.” Id. at 332. In Carter v General Motors Corp, 361 Mich 577; 106 NW2d 105 (1960), this Court again extended the scope of mental disability coverage. In Carter, the employee suffered an emotional collapse, later diagnosed as paranoid schizophrenia, resulting from accumulated stress he experienced in trying to perform his tasks on an assembly line. Upon review, this Court held that compensation could be awarded for a mental disability injury that arose out of and in the course of employment as a result merely of the effects of work place stresses on a preexisting mental weakness. In 1978, worker’s compensation coverage for mental disabilities was again broadened. In Deziel v Difco Laboratories, Inc (After Remand), 403 Mich 1, 26; 268 NW2d 1 (1978), this Court adopted the “subjective causal nexus” standard to determine the compensability of a mental disability claim: We hold, as a matter of law, that in cases involving mental . . . injuries, once a plaintiff is found disabled and a personal injury is established, it is sufficient that a strictly subjective causal nexus be utilized by referees and the WCAB to determine compensability. Under a “strictly subjective causal nexus” standard, a claimant is entitled to compensation if it is factually established that the claimant honestly perceives some personal injury incurred during the ordinary work of his employment “caused” his disability. This standard applies where the plaintiff alleges a disability resulting from either a physical or mental stimulus and honestly, even though mistakenly, believes that he is disabled due to that work-related injury and therefore cannot resume his normal employment. In a dissenting opinion, Justice Coleman criticized the majority’s holding. Id. at 46. Justice Coleman believed that the “subjective causal nexus” standard, in application, afforded “no standard at all.” Id. at 48. In her view, “the majority’s test for causal nexus would result in an award of compensation for virtually all, if not all, claims based on mental disorders.” Id. That was so because, “[i]f the claimant perceived that the job caused the problem, even if this were not true, the employer would be liable.” Id. (emphasis added). Thus, following Deziel, the controlling law was that compensation for a mental disability claim would be permitted if the claimant “honestly, even though mistakenly” perceived that a disability was related to a precipitating work event. Apparently, the Legislature was also dissatisfied with Deziel’s “subjective causal nexus” standard. In 1980, it reacted to Deziel by enacting, the statutory provision currently at issue, MCL 418.301(2). Hurd v Ford Motor Co, 423 Mich 531, 534; 377 NW2d 300 (1985). Section 301(2) provides: Mental disabilities and conditions of the aging process, including but not limited to heart and cardiovascular conditions, shall be compensable if contributed to or aggravated or accelerated by the employment in a significant manner. Mental disabilities shall be compensable when arising out of actual events of employment, not unfounded perceptions thereof. Section 301(2) constituted a direct response to the articulation in Deziel of an extraordinarily broad standard for determining compensability for mental disability claims, a standard that was the culmination of more than sixty years of judicial expansion of such claims. The Legislature’s swift action in this realm following Deziel reflected an unequivocal desire to address such expansion. As Farrington v Total Petroleum Inc, 442 Mich 201, 216, n 16; 501 NW2d 76 (1993), observed, the reason that the Legislature enacted MCL 418.301(2) was to “overturn or modify expansive interpretations placed upon the act by this Court.” B. GARDNER v VAN BUREN PUBLIC SCHOOLS 1. MAJORITY OPINION The first case in this Court to address § 301(2) was Gardner v Van Buren Pub Schs, 445 Mich 23; 517 NW2d 1 (1994). Specifically, this Court granted leave to interpret, among other things, the second sentence of § 301(2). In analyzing this sentence, the Gardner majority explained that it was faced with the problem of distinguishing between “actual events of employment” and “unfounded perceptions thereof.” Id. at 43. Unable to harmonize these two phrases, the majority determined that the statute only meant that actual events of employment must occur as a precondition to a claim, rather than imaginary or hallucinatory ones. Id. at 44-46. The Court rejected any perception analysis with regard to determining the compensability of a mental disability injury. The Court reasoned that such an analysis was inappropriate because, in many instances, individuals with mental disabilities can misperceive or altogether lose contact with reality. Id. at 43-44. Because “many, if not all, mental disabilities are based on ‘unfounded perceptions’ of ‘reality’ or ‘actual eventfs],’ ” the majority c
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CLARK v DAIMLERCHRYSLER CORPORATION Docket No. 252765. Submitted July 7, 2005, at Detroit. Decided September 13, 2005, at 9:00 a.m. Leave to appeal sought. Robert W Clark brought an action in the Macomb Circuit Court against DaimlerChrysler Corporation, alleging that the defendant discharged him from employment on the basis of his age in violation of the Civil Rights Act, MCL 37.2101 et seq. The court, Edward A. Servitto, Jr., J., granted the defendant summary disposition after determining that the plaintiffs claim was time-barred by a provision in the plaintiffs employment application requiring that any action relating to the plaintiffs employment be brought within six months. The plaintiff appealed. The Court of Appeals held-. 1. The trial court did not err by applying the shortened six-month period of limitations found in the plaintiffs employment contract. Under Rory v Continental Ins Co, 473 Mich 457 (2005), a contractually modified period of limitations is not analyzed for reasonableness, but is to be enforced as written unless it is contrary to law or public policy, or is otherwise unenforceable under a recognized contract defense. No statute explicitly prohibits the contractual modification of limitations periods in the employment context. Nor does the modification violate public policy. 2. Rory precludes considering whether a contract is one of adhesion when determining whether a modified limitations period is unconscionable. The limitations provision is not unconscionable because neither procedural nor substantive unconscionability is present. Procedural unconscionability exists when the weaker party had no realistic alternative to accepting the contract term. Despite unequal bargaining power, however, the plaintiff has not shown that he had no realistic alternative to employment with the defendant. Substantive unconscionability exists when the challenged provision is not substantively reasonable, such that the inequity of the contract term is so extreme as to shock the conscience. The six-month period of limitations, however, is neither inherently unreasonably nor so extreme that it shocks the conscience. 3. While the plaintiff contended that he did not knowingly waive the three-year period of limitations applicable to civil rights claims, one who signs an agreement is presumed, in the absence of coercion, mistake, or fraud, to know the nature of the document and to understand its contents, even'if he or she has not read the agreement. Affirmed. Neff, J., dissenting, would hold that the provision for the shortened period of limitations is unconscionable and violates public policy and is, therefore, unenforceable under the circumstances of this case. With regard to procedural unconscionability, the plaintiff and the defendant were not dealing at arm’s length when negotiating the contract. The provision was in the defendant’s preprinted application form, which the plaintiff filled out five months before he was hired. The plaintiff clearly had no realistic alternative to the contractually shortened limitations period, which was not a bargained-for term. An applicant would be aware that objecting to the provision at the time of application might thwart a job offer, and it is unlikely that an applicant would recall the provision or recognize its significance when hired much later. Unlike subsequent employment applications used by the defendant, this application did not indicate that the applicant agreed to forgo important legal rights. Thus, there was an absence of meaningful choice, and the provision took advantage of or surprised the plaintiff. The provision was also substantively unreasonable given the three-year period of limitations applicable by statute. The shortened limitations period places the plaintiff at a severe disadvantage and permits the defendant to wholly avoid employee claims. Finally, the manner in which the defendant imposed the shortened limitations period offends public policy. In cases such as a civil rights action, six months may be insufficient to pursue a claim related to a job loss at a time when the employee’s primary concern is maintaining a livelihood. The shortened period is extreme and unnecessary to protect employers from stale claims. 1. Contracts — Employment Contracts — Contractual Periods of Limitations. An unambiguous provision in an employment contract providing for a period of limitations shorter than that provided by statute for a lawsuit relating to employment must be enforced as written unless it is contrary to law or public policy or is otherwise unenforceable under a recognized traditional contract defense, such as duress, waiver, estoppel, fraud, or unconscionability. 2. Contracts — Defenses — Unconscionability. Both procedural and substantive unconscionabihty must be present for a contract or contract provision to be considered unconscionable and thus unenforceable; procedural unconscionability exists when the weaker party had no realistic alternative to accepting a provision; substantive unconscionabihty exists when a challenged provision is not substantively reasonable, such that the inequity of the provision is so extreme as to shock the conscience. 3. Contracts — Defenses — Knowledge of Terms. One who signs an agreement is presumed, in the absence of coercion, mistake, or fraud, to know the nature of the document and to understand its contents, even if he or she has not read the agreement. Pitt, Dowty, McGehee, Mirer & Palmer, PC. (by Michael L. Pitt and Beth M. Rivers), for the plaintiff. Cattel, Tuyn & Rudzewicz, PLLC (by Thomas A. Cattel, Michelle J. LeBeau, and Debra A. Colby), for the defendant. Before: Neff, EJ., and SMOLENSK and TALBOT, JJ. SMOLENSK, J. In this wrongful termination case, plaintiff appeals as of right the trial court’s order granting summary disposition for defendant. We affirm. Plaintiff asserts that he was approached sometime in 2001 and asked to accept early retirement as part of a salaried work force reduction. When plaintiff declined to retire, he claims he was told that his position would likely be eliminated and that retirement was in his best interest. Plaintiff accepted early retirement and completed his last day of work on August 31, 2001. Plaintiff filed this action on September 8, 2003, alleging that defendant had discharged him on the basis of age in violation of the Civil Rights Act, MCL 37.2101 et seq. Defendant moved for summary disposition pursuant to MCR 2.116(C)(7), arguing that plaintiffs claim was time-barred by a provision in plaintiffs employment application. The relevant portion stated: I agree that any claim or lawsuit relating to my service with [defendant] or any of its subsidiaries 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. The trial court applied the shortened six-month period of limitations to plaintiffs claim and granted defendant’s motion. We review de novo a trial court’s decision on a motion for summary disposition under MCR 2.116(C)(7). DiPonio Constr Co, Inc v Rosati Masonry Co, Inc, 246 Mich App 43, 46; 631 NW2d 59 (2001). The proper interpretation of a contract is a matter of law that this Court reviews de novo. DaimlerChrysler Corp v G-Tech Professional Staffing, Inc, 260 Mich App 183, 184-185; 678 NW2d 647 (2003). Plaintiff contends that the trial court erred by applying the shortened six-month limitations provision of plaintiffs employment contract. We disagree. Until recently, the general rule was to uphold contract terms limiting the time to bring suit, provided the limitation was reasonable. See Herweyer v Clark Hwy Services, Inc, 455 Mich 14, 20; 564 NW2d 857 (1997), citing Camelot Excavating Co, Inc v St Paul Fire & Marine Ins Co, 410 Mich 118, 127; 301 NW2d 275 (1981). However, in Rory v Continental Ins Co, 473 Mich 457, 470; 703 NW2d 23 (2005), our Supreme Court overruled the reasonableness rule followed by Camelot and its progeny. The Court held that an unambiguous contractual provision providing for a shortened period of limitations is to be enforced as written unless the provision would violate law or public policy. A mere judicial assessment of “reasonableness” is an invalid basis upon which to refuse to enforce contractual provisions. Only recognized traditional contract defenses may be used to avoid the enforcement of the contract provision. [Id. 3 The contractually modified period of limitations in question is not ambiguous; therefore, under Rory, we are compelled to enforce it as written unless it is contrary to law or public policy, or is otherwise unenforceable under recognized traditional contract defenses. Because there are no statutes explicitly prohibiting the contractual modification of limitations periods in the employment context, the contract provision is not contrary to law. Id. at 472. Furthermore, the Court in Rory clarified that public policy must be clearly rooted in the law. Id. at 471. Hence, this Court “must look to ‘policies that, in fact, have been adopted by the public through our various legal processes, and are reflected in our state and federal constitutions, our statutes, and the common law.’ ” Id., quoting Terrien v Zwit, 467 Mich 56, 66-67; 648 NW2d 602 (2002). Michigan has no general policy or statutory enactment prohibiting the contractual modification of the periods of limitations provided by statute. Rory, supra at 471. Likewise, even before Rory, provisions within an employment contract providing for a shortened period of limitations were held to be reasonable and, therefore, valid and enforceable. See Timko v Oakwood Custom Coating, Inc, 244 Mich App 234, 240-244; 625 NW2d 101 (2001). Consequently, we are unable to conclude that the limitations period provided in the contract violates public policy. Plaintiff further contends that this Court should not enforce the contract’s period of limitations because it constitutes an unconscionable contract of adhesion. We disagree. We shall first address plaintiffs contention that the employment contract in question was one of adhesion requiring close scrutiny. In Herweyer, supra at 21, our Supreme Court noted that employers and employees often do not deal at arm’s length when negotiating employment contracts; instead, the employee is often placed in the position of having to accept the terms of the employment contract or forgo the job. The Herweyer Court concluded, “Where one party has less bargaining power than another, the contract agreed upon might be, but is not necessarily, one of adhesion, and at least deserves close judicial scrutiny.” Id. However, in Rory, supra at 489, the Court overruled the Herweyer rule that contracts of adhesion were subject to heightened review. The Court stated that it is of no legal relevance that a contract is or is not described as “adhesive.” In either case, the contract is to be enforced according to its plain language. Regardless of whether a contract is adhesive, a court may not revise or void the unambiguous language of the agreement to achieve a result that it views as fairer or more reasonable. [Ml Therefore, we may not consider whether the contract was one of adhesion when determining whether the modified period of limitations was unconscionable. In order for a contract or contract provision to be considered unconscionable, both procedural and substantive unconscionability must be present. Northwest Acceptance Corp v Almont Gravel, Inc, 162 Mich App 294, 302; 412 NW2d 719 (1987). Procedural unconscionability exists where the weaker party had no realistic alternative to acceptance of the term. Allen v Michigan Bell Tel Co, 18 Mich App 632, 637; 171 NW2d 689 (1969). If, under a fair appraisal of the circumstances, the weaker party was free to accept or reject the term, there was no procedural unconscionability. Id. Substantive unconscionability exists where the challenged term is not substantively reasonable. Id. at 637-638. However, a contract or contract provision is not invariably substantively unconscionable simply because it is foolish for one party and very advantageous to the other. Gillam v Michigan Mortgage-Investment Corp, 224 Mich 405, 409; 194 NW 981 (1923). Instead, a term is substantively unreasonable where the inequity of the term is so extreme as to shock the conscience. Id. In the present case, plaintiff did not present any evidence that he had no realistic alternative to employment with defendant. Therefore, while plaintiffs bargaining power may have been unequal to that of defendant, we cannot say that plaintiff lacked any meaningful choice but to accept employment under the terms dictated by defendant. Allen, supra at 637-638. Furthermore, the six-month period of limitations is neither inherently unreasonable, Timko, supra at 243, nor so extreme that it shocks the conscience, Gillam, supra at 409. Consequently, plaintiff failed to establish that the contractually modified period of limitations was either substantively or procedurally unconscionable. Finally, plaintiff contends that he did not knowingly waive the statutory three-year limitations period applicable to civil rights claims. This argument is unavailing. The law is clear that one who signs an agreement, in the absence of coercion, mistake, or fraud, is presumed to know the nature of the document and to understand its contents, even if he or she has not read the agreement. See Watts v Polaczyk, 242 Mich App 600, 604; 619 NW2d 714 (2000). Because plaintiff has not demonstrated that the disputed contract provision is contrary to law or public policy, and has failed to demonstrate that the contractually provided period of limitations was unconscionable, we are compelled to enforce that term as written. Therefore, the trial court did not err when it applied the contractually modified period of limitations to plaintiffs claim. Affirmed. TALBOT, J., concurred. These include duress, waiver, estoppel, fraud, or unconscionability. Rory, supra at 470 n 23. While we have much sympathy for the dissent’s argument that there ought to be limitations on an employer’s ability to contractually modify periods of limitations, especially in the civil rights context, we believe such limitations ought to he imposed by the Legislature, not the judiciary. NEFF, P.J. (dissenting). I respectfully dissent. I would hold that the contract provision is unconscionable and violates public policy and is, therefore, unenforceable under the circumstances of this case. RORYv CONTINENTAL INS CO In Rory, decided after oral argument in this case, our Supreme Court revised Michigan law concerning contracts that shorten the legislated periods of limitations. Before Rory, contracts such as that at issue in this case were subject to heightened judicial scrutiny to determine the reasonableness of the shortened period of limitations. Herweyer v Clark Hwy Services, Inc, 455 Mich 14, 20-21; 564 NW2d 857 (1997). In accordance with the general rule applied in a majority of jurisdictions and adopted in Michigan, “a shortened contractual period of limitations was ‘valid if reasonable even though the period is less than that prescribed by otherwise applicable statutes of limitation.’ ” Rory, supra at 466, quoting Tom Thomas Org, Inc v Reliance Ins Co, 396 Mich 588, 592; 242 NW2d 396 (1976) (emphasis in Rory); see also Camelot Excavating Co, Inc v St Paul Fire & Marine Ins Co, 410 Mich 118, 126; 301 NW2d 275 (1981). In Rory, the Court rejected any judicial assessment of reasonableness, stating that “the decision in Camelot was premised upon the adoption of a ‘reasonableness’ test found in the dicta of Tom Thomas.” Rory, supra at 468. The Rory Court held that “an unambiguous contractual provision providing for a shortened period of limitations is to be enforced as written unless the provision would violate law or public policy.” Id. at 470. In rejecting any judicial assessment of reasonableness, the Court observed: A fundamental tenet of our jurisprudence is that unambiguous contracts are not open to judicial construction and must be enforced as written. Courts enforce contracts according to their unambiguous terms because doing so respects the freedom of individuals freely to arrange their affairs via contract. This Court has previously noted that “ ‘[t]he general rule [of contracts] is that competent persons shall have the utmost liberty of contracting and that their agreements voluntarily and fairly made shall be held valid and enforced in the courts.’ ” [Id. at 468 (citations omitted).] The Court further cited its own recent reasoning in Wilkie v Auto-Owners Ins Co, 469 Mich 41, 52; 664 NW2d 776 (2003), quoting Corbin on Contracts: “ ‘One does not have “liberty of contract” unless organized society both forbears and enforces, forbears to penalize him for making his bargain and enforces it for him after it is made. [15 Corbin, Contracts (Interim ed), ch 79, § 1376, p 17.]’ ” [Rory, supra at 469-470.] The Rory Court concluded that “[o]nly recognized traditional contract defenses may be used to avoid the enforcement of the contract provision.” Id. at 470. “Examples of traditional defenses include duress, waiver, estoppel, fraud, or unconscionability.” Id. at 470 n 23. UNCONSCIONABILITY In this case, the applicable statute of limitations permitted plaintiffs action to be brought within three years. That defendant exacted a shortened limitations period of six-months on the basis of a nondescript provision included among several others in a preprinted application for employment, which plaintiff filled out five months before he was hired, is unconscionable. The examination of a contract for unconscionability considers both procedural and substantive unconscionability. Hubscher & Son, Inc v Storey, 228 Mich App 478, 481; 578 NW2d 701 (1998). Our courts have applied a two-pronged test for determining whether a contract is unenforceable as unconscionable: “(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?” [Id. (citations omitted).] “Reasonableness is the primary consideration.” Id. Although this two-pronged test has been used to assess unconscionability, the general underpinnings of the defense must also be considered: The concept of unconscionability was meant to counteract two generic forms of abuses: the first of which relates to procedural deficiencies in the contract formation process, such as deception or a refusal to bargain over contract terms, today often analyzed in terms of whether the imposed-upon party had meaningful choice about whether and how to enter into the transaction; and the second of which relates to the substantive contract terms themselves and whether those terms are unreasonably favorable to the more powerful party, such as terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the law, fine-print terms or provisions that seek to negate the reasonable expectations of the nondrafting party, or unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction. It has been said that this formulation requires a showing that the contract was both procedurally and substantively unconscionable when made. It has often been suggested that a finding of a procedural abuse, inherent in the formation process, must be coupled as well with a substantive abuse, such as an unfair or unreasonably harsh contractual term which benefits the drafting party at the other party’s expense. Another way of viewing this problem is that the fact that a contract is one of adhesion does not itself render the
MAGEE v DAIMLERCHRYSLER CORPORATION Docket No. 126219. Decided March 8, 2005. On application by the defendant for leave to appeal, the Supreme Court, after hearing oral argument on whether the application should he granted and in lieu of granting leave, reversed part of the judgment of the Court of Appeals and remanded the case to the circuit court for reinstatement of the order of summary disposition for the defendant. Jacquelyn V Magee brought an action in the Macomb Circuit Court against DaimlerChrysler Corporation, alleging sexual harassment, sex and age discrimination, retaliation, and constructive discharge from employment. The defendant moved for summary disposition, arguing that the action was barred by the statute of limitations because it was not brought within three years of any of the alleged acts of discrimination or retaliation. The trial court, James M. Biernat, Sr., J., granted the defendant’s motion. The Court of Appeals, Schdette, EJ, and Meter and Owens, JJ., affirmed the grant of summary disposition with regard to the constructive discharge claim and reversed the grant of summary disposition with regard to the other claims. Unpublished memorandum opinion, issued March 2,2004 (Docket No. 243847). The Court’s decision was based on the fact that the action was brought within three years of the date that the plaintiff resigned her employment. The defendant sought leave to appeal. In an opinion per curiam, signed by Chief Justice Taylor, and Justices Corrigan, Young, and Markman, the Supreme Court held,-. The Court of Appeals erred in concluding that the plaintiffs claims accrued on the date she terminated her employment as opposed to her last day of work. No discriminatory conduct is alleged to have occurred after the plaintiffs last day of work. The claims were not timely filed within three years of that date. The part of the Court of Appeals judgment that reversed part of the judgment of the trial court must be reversed and the case must be remanded to the trial court for reinstatement of the order granting summary disposition in favor of the defendant with regard to all the claims brought by the plaintiff. Justice Weaver, concurring, stated that she concurs in the result of the opinion per curiam because the applicable three-year period of limitations began to run when the plaintiff went on medical leave on September 12, 1998, and the plaintiffs claims were not filed within three years of that date. The trial court correctly granted summary disposition in favor of the defendant. Affirmed in part, reversed in part, and remanded to the circuit court. Justice Cavanagh, joined by Justice Kelly, dissenting, stated that the defendant’s failure to stop the harassment after the plaintiff made repeated complaints was discriminatory conduct. The conduct occurred during the three years that preceded the filing of the complaint; therefore, the complaint was timely filed. Tucker & Hughes, PC. (by Juanita Gavin Hughes), for the plaintiff. Cattel, Tuyn & Rudzewicz, PLLC (by Tomas A. Cattel and Debra A. Colby), for the defendant. PER CURIAM. In this case involving the Civil Rights Act, the Court of Appeals held that plaintiffs claims of sexual harassment, sex and age discrimination, and retaliation were timely filed, because the lawsuit was brought within three years of the date she resigned her employment with defendant. We conclude that plaintiffs claims were not filed within the limitations period because none of the alleged discriminatory or retaliatory conduct occurred within the three years that preceded the fifing of the complaint. We therefore reverse that part of the judgment of the Court of Appeals and remand the matter to the trial court for reinstatement of the trial court’s grant of summary disposition to defendant. i Plaintiff Jacquelyn Magee was an hourly production employee who began work for defendant Daimler-Chrysler in 1976. She went on medical leave for emotional distress on September 12, 1998, and, without first returning to work, resigned her job on February 2, 1999. On February 1, 2002, Magee filed a lawsuit under the Civil Rights Act, MCL 37.2101 et seq., claiming that she had been unlawfully discriminated against and harassed during most of her twenty-two years at Daimler-Chrysler. Magee’s complaint lists separate counts for sex harassment based on hostile work environment, sex harassment based on quid pro quo harassment, retaliation, sex discrimination, and age discrimination. In her complaint, Magee alleges that she suffered harassment from the 1980s until her last day of work on September 12, 1998, and that her supervisors periodically retaliated against her during this period as a result of her resistance to the harassment. Magee alleges that this constant harassment caused her to leave her job at DaimlerChrysler on September 12, 1998, and that she decided to resign on February 2, 1999, because she anticipated that the harassment would continue if she returned. DaimlerChrysler moved for summary disposition, asserting that Magee’s February 1, 2002, complaint failed to allege any discriminatory acts after September 12,1998, and that the complaint was therefore not filed within the three-year period of limitations applicable to Civil Rights Act claims, MCL 600.5805(10). The trial court initially denied DaimlerChrysler’s motion without prejudice, allowing Magee to amend her complaint to allege harassment or retaliation occurring up to her February 2, 1999, resignation. However, because Magee’s amended complaint continued to allege only harassment and retaliation through September 12, 1998, her last day of work, the trial court granted DaimlerChrysler’s motion and dismissed Magee’s complaint. Magee appealed the trial court’s ruling to the Court of Appeals, which relied on this Court’s recent decision in Collins v Comerica Bank, 468 Mich 628; 664 NW2d 713 (2003), to reverse the lower court’s dismissal of the harassment, retaliation, and discrimination claims. The Court of Appeals concluded that these claims were timely, because they were filed within three years of the date of Magee’s resignation. DaimlerChrysler then sought leave to appeal to this Court. After hearing oral argument from both parties on the application, this Court has now determined that the Court of Appeals misapplied Collins and erroneously reinstated Magee’s Civil Rights Act claims. ii In the absence of disputed facts, whether a cause of action is barred by the applicable statute of limitations is a question of law, which this Court reviews de novo. Boyle v Gen Motors Corp, 468 Mich 226, 229-230; 661 NW2d 557 (2003). Likewise, this Court reviews de novo rulings on summary disposition motions. Neal v Wilkes, 470 Mich 661, 664; 685 NW2d 648 (2004). hi In Collins, supra at 633, this Court held that a cause of action for discriminatory termination does not accrue until the date of termination. The plaintiff employee, Gwendolyn Collins, was suspended pending an investígation; when the investigation was completed several weeks later, her employment was terminated. Within three years of her termination, Collins filed a complaint alleging that her termination was the result of race and gender discrimination. The Court of Appeals ruled that Collins’s suit was not timely under the three-year period of limitations because her causes of action accrued on the last day that she actually performed employment duties (as opposed to her later termination date). This Court disagreed with the Court of Appeals last-day-worked analysis and reversed, holding that a claim for discriminatory discharge cannot arise until a claimant has actually been discharged. Id. Relying on Collins, the Court of Appeals in this case reasoned that Magee’s claim also accrued on her termination date as opposed to her last day of work. The Court acknowledged that Magee resigned, and was not terminated. But it found significant that “her last day of work was followed by a period in which she was on a medical leave of absence” and that she was employed by DaimlerChrysler while on leave. Accordingly, it concluded that her causes of action, if any, arose on February 2, 1999. The Court of Appeals reliance on Collins to reinstate Magee’s claims of sexual harassment, sex and age discrimination, and retaliation is misplaced. Magee was never terminated from her employment and does not allege discriminatory termination. She bases her Civil Rights Act claims on alleged discriminatory conduct that occurred before her leave of absence. Indeed, when given a chance to amend her complaint to plead claims falling within the period of limitations, Magee was unable to do so. Collins, a discriminatory termination case, simply does not apply in this situation. To determine whether Magee’s claims were timely filed, we look to MCL 600.5805(10), which establishes that the applicable period of limitations is three years from the date of injury. Because Magee alleged no discriminatory conduct occurring after September 12, 1998, the period of limitations on Magee’s claims expired, at the latest, three years from that date, or by September 12, 2001. Accordingly, as the trial court held, Magee’s February 1, 2002, complaint was not timely filed. The dissent argues that the defendant violated the Civil Rights Act within the three years preceding the filing of plaintiffs claim by failing to “prevent future harassment.. ..” Post at 115. This interpretation of the Civil Rights Act amounts to a continuing violations doctrine in which an employer is continuously liable from the time it or its agent violates the act until the time that violation is remedied by the employer. Thus, in Justice CAVANAGH’s view, a plaintiff subjected to a hostile work environment on December 31, 2005, may file a timely complaint in December 2030 if the employer has failed to remedy the sexual harassment in the ensuing twenty-five years. This theory renders nugatory the period of limitations established by the Legislature in MCL 600.5805(10). It is therefore a theory we must reject. For these reasons, we reverse the relevant part of the judgment of the Court of Appeals and remand this case to the Macomb Circuit Court for reinstatement of the order granting DaimlerChrysler’s motion for summary disposition. Taylor, C. J., and Corrigan, Young, and Markman, JJ., concurred. Unpublished memorandum opinion, issued March 2, 2004 (Docket No. 243847). Magee’s complaint also includes a separate count alleging constructive discharge. The trial court dismissed this count, and the Court of Appeals affirmed the trial court’s ruling. Magee did not appeal, and the dismissal of that claim is not before this Court. Wickens v Oakwood Healthcare Sys, 465 Mich 53, 60; 631 NW2d 686 (2001). WEAVEE, J. (concurring). I concur in the result of the opinion per curiam that reverses the Court of Appeals judgment in part and remands the matter to the trial court for reinstatement of the trial court’s grant of summary disposition to defendant. Under the facts pleaded by plaintiff, the three-year period of limitations began to run when plaintiff went on medical leave on September 12, 1998, for emotional distress. Plaintiffs claims were required to be filed within three years of September 12, 1998. Because they were not, the trial court was correct to grant summary disposition to defendant. Therefore, I concur in the result of the opinion per curiam. MCL 600.5805(10). CAVANAGH, J. (dissenting). I disagree with the majority’s contention that defendant engaged in no discriminatory conduct during the three years that preceded the filing of plaintiffs complaint. Therefore, I must respectfully dissent. Plaintiff began working for defendant in 1976. Over the years, plaintiff complained of various incidents of harassment. Plaintiff complained that her foreman was making sexual advances toward her. When plaintiff was assigned to a different supervisor, her former foreman still worked in the same complex and continued to harass her. Because of the harassment, plaintiff was ordered by her psychiatrist to take an approximately four-month medical leave. When plaintiff returned from her medical leave, her former foreman was still working in the same complex as plaintiff. A subsequent foreman of plaintiffs also made sexual advances toward her, including intentionally touching plaintiffs breast. For an entire year, plaintiff also complained to defendant about a sign in the men’s restroom that referred to plaintiff in a derogatory and sexually suggestive manner. Because of the stress of the harassment she continued to suffer, plaintiff was ordered to take another medical leave of absence. While she was employed by defendant, plaintiffs union steward also made sexually suggestive comments about plaintiffs “ass” and touched her in an inappropriate manner. Plaintiffs coworkers made sexually suggestive comments about her body and began hitting her with cardboard sticks. When plaintiff asked her union steward to intercede, he just laughed and said, “Yea, hit that ass.” Plaintiff repeatedly complained to defendant, yet nothing was done. When plaintiff requested a transfer, her union steward told her that she could transfer if she had sex with him. Once plaintiff was transferred, the union steward told her that she “owed” him and he wanted her to have sex with him. He later stopped plaintiff from training for another position because she was not having sex with him. Plaintiff again complained to a foreman, but he said there was nothing he could do. Because of the stress plaintiff was suffering as a result of the harassment, plaintiff was then ordered to take a third medical leave. Because defendant took no steps to stop the harassment while plaintiff was on her third medical leave, she was forced to decide not to return to the harassing environment. Defendant’s discriminatory conduct in failing to take steps to prevent future harassment continued throughout plaintiffs medical leave. Requiring plaintiff to return to the harassing setting to work in the unchanged environment would be unreasonable and possibly dangerous to plaintiffs health, considering that her doctor had ordered three medical leaves because of the stress of the harassment. As plaintiff explained, in order to have even been considered for a possible transfer to another plant after having been out on her third harassment-related medical leave, she would have had to return to the plant she left and hope for a transfer, despite that her multiple complaints had garnered no response before or during her medical leave. Thus, for plaintiff to be able to try and leave the harassing environment, she would have had to return to work with the same men who harassed her and whose conduct necessitated that plaintiff take medical leaves in the first place, without any assurance that defendant would protect her. This case presents a unique set of circumstances because plaintiffs doctor-ordered medical leave was directly related to the harassment. Plaintiffs final medical leave was actually her third leave related to the stress of the harassment she suffered. Defendant maintained a hostile work environment despite plaintiffs repeated complaints. Defendant’s failure to stop the harassment after these complaints is, under the facts of this case, discriminatory conduct. Because this conduct occurred during the three years that preceded the filing of plaintiffs lawsuit, I find that her complaint was timely filed. Accordingly, I respectfully dissent. Kelly, J., concurred with Cavanagh, J.
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