Michigan: Standard Employee Forms Subject to “Reasonableness” Test
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APPLIES TO Employers with Employees in MI |
EFFECTIVE July 31, 2025 |
QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion
The Michigan Supreme Court’s recent decision in Rayford v. American House Roseville I, LLC marks a shift in how employers across the state must approach employment agreements, specifically those that shorten the time that employees have to file legal claims.
This case arose when a certified nursing assistant sued her former employer for discrimination and retaliation under the Elliott-Larsen Civil Rights Act (ELCRA), but her claim was dismissed because she filed it outside the 180-day window specified in a standard employment acknowledgment form. The Supreme Court reversed the lower courts’ rulings, holding that such “adhesive” agreements (e.g., those presented on a take-it-or-leave-it basis) must now be evaluated for “reasonableness,” not simply enforced as written.
For employers, this ruling upends nearly two decades of precedent that allowed for shortened limitations periods in employment contracts, provided they were clearly stated and not otherwise unconscionable. In making its ruling, the Court revived the “Camelot factors,” a three-part test requiring courts to assess whether the employee had sufficient time to investigate and file a claim, whether the shortened period effectively nullifies the right to sue, and whether the claim could be barred before the harm is even discoverable.
As a result, employers can no longer rely on boilerplate language in handbooks or onboarding documents to limit potential liability. Instead, they must be prepared to demonstrate that any shortened filing deadlines are objectively reasonable under the specific circumstances of each case. This includes showing that employees had a meaningful opportunity to understand and act on their rights within the shortened timeframe.
Action Items
- Review onboarding documents and employee handbooks for compliance with statutory filing periods.
- Consult with legal counsel on provisions seeking to shorten statutorily provided filing periods.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2025 ManagEase