Fourth Circuit Upholds Shortened Limitations Period in Arbitration Agreement

By:  M. Jarrad Wright and Jonathan R. Mook

Over the last number of years, employers increasingly have been requiring employees to sign mandatory arbitration agreements as a condition of employment.  This trend has been on the uptick due to employer concerns about the ever increasing cost of court litigation and the potential for runaway juries to award millions of dollars in damages based upon pure emotion rather than fact.  An additional benefit of arbitration recently was highlighted by the Fourth Circuit Court of Appeals in Bracy v. Lancaster Foods LLC, Case No. 19-1292.  In that case, the court ruled that an employment agreement’s requirement that any claim be made within one year was enforceable even though a number of employment related claims the plaintiff asserted had longer limitations periods.

The Facts
The case was brought by Michael Bracy, who worked as a truck driver for Lancaster Foods LLC.  When he was hired, Bracy signed a mandatory arbitration agreement, which required that any claim he might make against the company needed to be brought within one year and that the claim would be heard by an arbitrator, not by a jury.

After suffering an on-the-job injury, Bracy and Lancaster disagreed about his work restrictions, and ultimately, Lancaster viewed Bracy’s position as a resignation.  Subsequently, Bracy sued Lancaster in state court asserting various employment claims.

Lancaster removed the case to federal district court and sought to dismiss Bracy’s lawsuit and compel arbitration based upon the terms of the arbitration agreement Bracy had signed.  Bracy opposed Lancaster’s motion, arguing that the arbitration agreement was unconscionable and could not be enforced because it shortened all applicable statutes of limitation to one year.  The district court rejected Bracy’s contention that the arbitration agreement was not enforceable and dismissed Bracy’s suit.

Fourth Circuit Decision
Bracy appealed the district court’s decision to the Fourth Circuit Court of Appeals, which is based in Richmond and whose decisions apply to federal courts not only in Virginia, but in West Virginia, North and South Carolina, and Maryland as well.  On appeal, the Fourth Circuit made short shrift of Bracy’s argument that Lancaster’s arbitration agreement could not be enforced because it shortened that statute of limitations for employment claims.  Relying upon prior established Fourth Circuit law, the court held that as “a general rule, statutory limitations periods may be shortened by agreement, so long as the limitations period is not unreasonably short,” and as long as the statute at issue does not prohibit contractually shortened statutes of limitations.  The appeals court also noted that contractual limitation periods of one year or less have been found to be reasonable.  Accordingly, the court affirmed the district court’s dismissal of Bracy’s lawsuit.

Bottom Line:  The Fourth Circuit’s decision in Bracy serves to confirm the benefits of having your employees sign mandatory arbitration agreements as a condition of employment.  However, those agreements must be properly tailored to ensure that they will pass court muster.  Although the Fourth Circuit in Bracy approved an arbitration agreement with a limitation period of one year, the court’s reasoning makes clear that a thirty-day limitation for pursuing a claim, in all likelihood, would render the agreement unconscionable and unenforceable.

Where to draw the line on the statute of limitations as well as other provisions in an arbitration agreement are matters that should be determined based upon consultation with experienced employment counsel.  The last thing that any employer wants is to require employees to sign mandatory agreements to arbitrate and, later, find out that those agreements are unenforceable due to an unconscionable provision.

DGRead 21.03.15

Virginia Legalizes Recreational Pot, But Questions Remain; Virginia Enacts Limited Paid Leave; Virginia Creates Office of Civil Rights; DG/30 Milestone

Virginia Legalizes Recreational Pot, But Questions Remain

By:  M. Jarrad Wright

The Old Dominion now has the “honor” of being the first state in the South and the sixteenth state in the nation to legalize marijuana.  With only hours to go before the end of this year’s legislative session, the State Senate and House of Delegates struck a compromise and passed a bill that will legalize marijuana for adult recreational use and retail sales in 2024. The vote occurred on a party line basis without any Republican support.  Democratic Governor Ralph Northam has been supporting legalization efforts, and there is little doubt that he will sign the legislation into law.

Details of the New Law
The new Virginia law will make possession of up to an ounce of marijuana legal when sales are slated to begin in 2024.  The bill also will allow home cultivation of four plants for each household.  Revenue generated through the sale of marijuana is designated for pre-K education and public health initiatives in the state.

Significantly, the legislation includes a clause requiring a second vote in the General Assembly next year to approve the requirements for regulating marijuana sales, but that procedural hurdle will not impact the timeline for legalization.  With the General Assembly up for election this November, the task of finalizing the regulatory framework, therefore, has been left to a General Assembly whose configuration in terms of legislators and party affiliation is as yet unknown.  That especially is the case since the fallout from the General Assembly’s legalization of recreational marijuana use and sales is likely to impact some key races around the Commonwealth, as many Republican legislators in Richmond argued that the legalization bill was rushed, while many Democrats argued that the bill does not go far enough.

Impact on Employers
From an employer’s perspective, the status quo is maintained for the immediate future.  Looking ahead, however, there remain significant business questions that have not been addressed, including how employers should conduct drug testing given that recreational marijuana use will now be legal and potentially prevalent.  Employers, therefore, are likely to be facing a number of challenges in maintaining drug free workplaces.

Assessing with any assurance the practical impact upon employers of the legislation will need to await future developments. Virginia’s laws regarding marijuana, as well as those in most of the country, continue to be in flux, and employers need to keep themselves apprised of any changes in the legal landscape.  Accordingly, we shall continue to update you as Virginia moves forward in establishing the regulatory framework for the sale of recreational marijuana.

Potential Concerns
Of special concern is whether the General Assembly may seek to provide legal protection to those persons who legally use marijuana.  Other states have done so, and prohibit an employer from taking an adverse job action against an employee simply because the individual is legally using pot outside the workplace.  Should Virginia move in this direction, the impact on employers is clear.

In short, this year’s General Assembly action to legalize recreational pot clearly is not the end of the story.  Stay tuned.

Virginia Enacts Limited Paid Leave

By:  Jonathan R. Mook

At the start of this year’s Virginia General Assembly session, proponents of paid sick and family medical leave for employees had high hopes that the legislature would follow the lead of other states and pass legislation to mandate that Virginia employers provide paid leave for their employees, especially in light of the continuing COVID-19 pandemic.

As we reported earlier in DG Read, Delegate Elizabeth R. Guzman of Prince William County and Senator Barbara A. Favola of Arlington each introduced proposed legislation specifying a paid leave mandate. Although the details of the bills differed in terms of those employers that would be covered and the circumstances and amount of paid leave required, the proposed bills represented a significant step in what has become a nationwide push to recognize paid leave as a universally accepted employee right.

Legislative Action
In early February, the Virginia House of Delegates passed Del. Guzman’s Bill, which would guarantee paid sick leave for certain “essential workers,” like first responders, grocery store employees, home health and domestic workers, and prison personnel.  The proposal required employers to provide these workers with forty hours of paid sick leave per year, with exemptions for retail companies that have fewer than 25 workers.  The Bill also allowed covered employers to seek a hardship waiver.

After passing the House, the Bill went to the Virginia Senate, where it was considered by the Commerce and Labor Committee.  Although the House Bill was supported by the Virginia Interfaith Center and a coalition of small businesses, the legislation faced tough sledding in the Senate Committee.

Accordingly, the Bill was scaled back to cover only home healthcare workers serving Medicaid patients, and those workers would be guaranteed up to five days of paid sick leave per year.  In its scaled back form, the paid leave legislation was passed by both the Virginia Senate and the House of Delegates, and it is expected that Virginia Governor Ralph Northam will sign the legislation into law.

Impact of New Law
Although this year’s General Assembly took only a small step toward mandating paid sick and family leave for employees, the legislation covering home healthcare workers still will have a significant impact.  That’s because it is estimated that there are some 40,000 caregivers in the Commonwealth who likely will be covered.  Thus, the door certainly has been opened for concerted efforts in future Virginia legislative sessions to expand an employee paid leave mandate beyond home healthcare employees.

Future Paid Leave Efforts
We can expect that at next year’s General Assembly session, the advocates for paid employee leave will be back in Richmond and will continue their efforts to push for more comprehensive legislation.  Accordingly, all Virginia employers need to keep abreast of future developments on the paid leave front.  You do not want to be caught unawares when a paid leave requirement affecting your business operations is enacted into law.

Virginia Creates Office of Civil Rights

By: Billy B. Ruhling, II

The cultural awakening our nation has experienced over the last year in the wake of police shootings and the recognition that what had once been common behavior toward certain gender groups no longer is acceptable in the Old Dominion. On January 5, 2020, Virginia Attorney General Mark Herring announced that the existing Office of Human Rights would be restructured in order to create a new Office of Civil Rights. Along with the name change, the staffing will be significantly increased, and the new office will have a more encompassing scope of reach.

This change builds upon a series of bills passed in the General Assembly last year authorizing Virginia’s Attorney General to investigate discrimination in local police departments as well as enhancing the Attorney General’s ability to protect LGBTQ rights and to root out gender-based discrimination. The Office of Civil Rights will be staffed by seven attorneys and six staff members, which is a dramatic change from the Office of Human Rights’ prior complement of just one attorney and three staff members. As Attorney General Herring explained when announcing the change, “The Office of Civil Rights will enhance our ability to protect Virginians from discrimination in housing, employment and public life, as well as allow us to tackle new responsibilities, like ‘pattern and practice’ investigations that can root out and end unconstitutional policing and enforcing protections against discrimination for LGBTQ Virginians.”

The new office can be reached at 804-225-2292 or

DiMuroGinsberg Partner Discusses the Impact of the Continued COVID Pandemic

“2021 Trends: Dealing with the Impact of the Continued Pandemic Emergency in a Legally Compliant Manner,” was the subject of a presentation by DiMuroGinsberg partner, Jonathan R. Mook, for a January 20, 2021 webinar sponsored by Simplify Compliance. As part of his presentation, Jonathan addressed the legal ramifications stemming from the increased reporting by employees of symptoms of anxiety and stress and how those symptoms may be indicia of a disability under the Americans with Disabilities Act (“ADA”). According to the Centers for Disease Control, the number of persons with symptoms of anxiety disorders tripled in 2020 compared to 2019. That increase is likely to continue into 2021, Jonathan predicted.

As a result, Jonathan cautioned employers to carefully consider the concerns of employees who report episodes of anxiety and stress and to make an assessment as to whether they may have a legal basis to claim coverage under the ADA. Jonathan discussed the common types of accommodations that an employer may need to provide to accommodate employees with mental disabilities exacerbated by the pandemic. These accommodations include telework, modified work schedules, medical leave, and the elimination of stressful, nonessential job functions.

Jonathan’s presentation also addressed the ways in which employers can facilitate the return of employees to the workplace. In doing so, Jonathan emphasized the obligation of employers to ensure the safety of those returning to work, which may include instituting social distancing policies, mask mandates, and more intensive cleaning and disinfection protocols. Additionally, Jonathan discussed the EEOC’s recent guidance pertaining to the pandemic, including allowing employers to institute health screenings and COVID-19 testing of employees returning to the workplace. The EEOC’s recent guidance allowing employers to mandate COVID vaccinations also was discussed. Jonathan advised, however, that employers should proceed with care in imposing a vaccination mandate, especially in light of an employer’s obligation to reasonably accommodate disabled employees who for health reasons should not be vaccinated, as well as to accommodate other employees whose religious belief opposes vaccinations.

If you would like to receive a copy of the PowerPoint for Jonathan’s presentation, you may contact him at

DGRead 21.03.01

Virginia Set to Legalize Recreational Marijuana; President Biden Names New Chair to the EEOC: DiMuroGinsberg Partner Jonathan Mook Comments on EEOD’s Proposed Wellness Rule: DG/30 Milestone