Big change in Michigan for contractually shortened statute-of-limitation periods

On July 31, 2025, the Michigan Supreme Court changed the test for enforceability of contractually shortened claim limitation periods, overruling earlier cases. Employers should be aware of the change and consider whether they need to revise or replace certain employment documents in light of the new test.

Special scrutiny

Employers often shorten the statute of limitations of certain state employment-law claims to 180 days (six months) in their applications, employment contracts, and other onboarding documents.

In Rayford v. American House, the Michigan Supreme Court held that employees and employers can agree to shortened limitation periods (applying to state-law claims) but that special scrutiny applies when the provision is contained in nonnegotiated, boilerplate employment agreements. The court ruled that such provisions—commonly found in employment applications, handbooks, or acknowledgment forms—are adhesion contracts that must be examined for reasonableness before being enforced.

New test going forward