Michigan Court Of Appeals Reminds Employers Of The Importance Of Carefully Drafting Employment Agreements And Onboarding Documents

Takeaways

• Employers that include unambiguous contractual language regarding integration and modification in employment agreements must ensure that the agreement contains all relevant terms and conditions of employment.
• Careless drafting or inconsistent onboarding documents can eliminate otherwise enforceable employer protections.

The Michigan Court of Appeals recently provided employers with an important reminder about the interplay between employment applications and employment agreements in Mayberry v. Acrisure Wallstreet Partners, LLC. In that case, the Plaintiff signed both an employment application and a separate employment agreement at the time he was hired. The application included a shortened limitations period that required her to bring any claim against the Company within six months of the events underlying the claim. The employment agreement, signed later in the day, contained no such shortened limitations period.

What the employment agreement did contain, however, was an integration clause which stated that it superseded all prior agreements between the parties, represented the parties' entire agreement on the terms and conditions of employment, and could not be modified or supplemented except by a written document stating as such.

After several years of employment, the Plaintiff sued his employer for breach of contract. The employer argued the Plaintiff's action was time-barred by the shortened limitations period in his employment application. The trial court found for the Plaintiff, holding that because the employment agreement unambiguously stated that it was the parties' entire agreement and barred supplementation except by express written modifications, the application's limitations period was not part of the employment agreement and could not be asserted by the employer as a defense.

On appeal, the Court of Appeals agreed, rejecting the employer's arguments that (1) the application and agreement should be read together since they were both signed during onboarding and (2) the application's limitations period should control because it was not inconsistent with the employment agreement. The Court explained that, given the employment agreement's unambiguous integration clause, the two documents could not be read together. And the employment agreement's silence as to a shortened limitations period did not give weight to the application, because the agreement expressly barred modifications and supplementation.

The Mayberry case serves as a useful reminder to Michigan employers of the importance of carefully drafting employment agreements and applications and making sure that they are consistent both in their terms and in their usage. Unambiguous contractual language regarding integration and modification will be adhered to by Michigan Courts, so employers that include such language in employment agreements must ensure that the agreement contains all relevant terms and conditions of employment.

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