Posted: July 8, 2020 |
COVID-19 has generated yet another lurking danger to California employers. In addition to all of the challenges that COVID-19 has presented to employers, it has also resulted in an extended statute of limitations period for certain lawsuits to be filed.
The rationale for imposing statutes of limitations is to encourage plaintiffs to bring their claims within a reasonable time and to protect defendants from stale or lost evidence that could disprove the allegations against them. It is generally agreed that claims should be brought against a defendant in a timely manner and this is especially true when the evidence may change as a result of a delay. For example, witnesses may no longer be available due to the passage of time, evidence may be lost, storage issues may arise, or evidence may be unrecoverable due to the replacement of technology.
Despite all of the reasons for imposing statutes of limitations, California has instituted emergency rules in response to the COVID-19 pandemic extending all statutes of limitations and all statutes of repose (laws that bar claims in a way similar to statutes of limitations). On April 6, 2020, the Judicial Council of California issued Emergency Rule 9, which provided that:
Part of the reasoning for Emergency Rule 9 was that courts were closed and the public, including lawyers, were unable to access the courts to file new actions, except in those jurisdictions allowing e-filing. Circumstances changed when courts began to reopen and part of the rationale for Emergency Rule 9 no longer existed.
Under Emergency Rule 9, as initially issued, there was a risk that statutes of limitation could be extended for years. Tying the expiration of the extended statutes of limitation to a time when the COVID-19 pandemic would be lifted ran the risk of undermining the very purpose of those statutes of limitation. The Judicial Council received complaints that the additional, uncertain extension of time was inconsistent with the shorter limitation periods in the statutes and the intent that causes of action should be brought by plaintiffs expeditiously.
As a result of the possibility that statutes of limitations could be extended for years beyond their ordinary deadlines, the Judicial Council issued an Amended Emergency Rule 9 on May 29, 2020 which created a bifurcated standard for the extension of statutes of limitations and repose. Amended Emergency Rule 9 provides that:
The Judicial Council provided additional guidance stating that Amended Emergency Rule 9 should be interpreted broadly to toll any statute of limitations as that term is applied to any deadline requiring the filing of a pleading in a California Superior Court. The Judicial Council also advised that special proceedings fall within the definition of “civil causes of action.” This would include civil actions such as writs of mandamus actions under Code of Civil Procedure sections 1085, 1088.5, and 1094.5.
The guidance also advised that all filing deadlines, including those found within the Family Code and the Probate Code are extended, and that Amended Emergency Rule 9 does not apply to the Code of Civil Procedure alone.
What this change means to employers is that all statutes of limitations are extended, regardless of whether they may have otherwise expired within the April 6, 2020 to October 1, 2020 period. For example, a written employment contract that an employee claims was breached by the employer on March 30, 2020 would expire on September 25, 2024 rather than March 30, 2024.
Given this change, employers who have document retention policies tied to statutes of limitations should consider taking measures to ensure that records are retained beyond their normal deadlines. Employers should also remain aware that employees will now have additional time to bring lawsuits based upon California state laws. Currently it remains to be seen whether there will be similar tolling for claims brought under federal laws.
For advice specific to your situation, please contact any of the employment attorneys at Ferruzzo & Ferruzzo, LLP who are ready to assist you with your COVID-19 response plan and explain how this change may affect you.