Massachusetts Lawyers Weekly
Arbitration pact didn’t waive ADEA limitations period
Statute of limitations deemed substantive right
Eric T. Berkman//October 15, 2025//
In brief
- Judge Angel Kelley ruled the ADEA’s filing deadlines are substantive rights.
- IBM’s arbitration clause requiring claims within 300 days was invalidated.
- The court found employees cannot contractually waive ADEA limitations.
The statute of limitations under the federal Age Discrimination in Employment Act could not be contractually waived by an employee’s mandatory arbitration agreement, a U.S. District Court judge has held.
The ADEA mandates that an aggrieved employee must first file a charge with the U.S. Equal Employment Opportunity Commission within 300 days. It also states that an employee must file suit in court within 90 days of the EEOC issuing a right-to-sue letter.
In 2016, IBM Corp., the defendant in the case, laid off plaintiff Michael Rumsey, who was 52 at the time, as part of a group reduction in force.
Rumsey’s separation agreement contained a clause mandating that he arbitrate all claims and file an arbitration demand within 300 days of a claim arising.
Instead of filing for arbitration right away, Rumsey filed a timely ADEA charge with the EEOC.
More than four years later, but less than 90 days after the EEOC issued a right-to-sue notice, Rumsey filed an arbitration demand pursuant to the arbitration agreement.
IBM moved to dismiss.
Specifically, it argued that the hard 300-day filing deadline in the arbitration agreement constituted a waiver of the ADEA’s statute of limitations period.
Judge Angel Kelley disagreed.
“The nature of the statute of limitations — whether it is substantive or procedural — is a critical preliminary issue because this Court must protect the non-waivable substantive rights guaranteed by the ADEA,” Kelley wrote in denying IBM’s motion. “This Court wades through competing rulings to arrive at its own following First Circuit binding guidance: the ADEA’s statute of limitations is substantive in nature and, thus, cannot be contractually waived.”
The 24-page decision is Rumsey v. International Business Machines Corporation, Lawyers Weekly No. 02-558-25.
‘Underhanded scheme’?
Counsel for the plaintiff, David C. Webbert of Topsham, Maine, said IBM’s top executives covered up an “underhanded scheme” to fire thousands of workers because of their age and then keep them from suing over it.
“It is long overdue for IBM to be held accountable and for Mr. Rumsey and others like him to get the justice they deserve.”
IBM’s attorney, Traci L. Lovett of Boston, could not be reached for comment prior to deadline.
But Alicia J. Samolis, a Providence employment lawyer who is also licensed in Massachusetts, said the decision is disappointing for employers.
“Administrative agencies have a huge caseload and, despite their best efforts, need a long time to issue decisions as to probable cause and corresponding right-to-sue letters,” Samolis said. “This lag causes employers a disproportionate amount of prejudice because, during the delay, employees that are witnesses often leave their employment, becoming uncooperative or unavailable.”
While there is no dispute that employees still have the right to pursue an agency action despite an arbitration provision, Samolis said, there is no legitimate reason why an employee who timely files an EEOC action cannot also contemporaneously file a timely arbitration action.
“Allowing employees to wait to arbitrate claims until so many years after the claim arises just provides another way for employees and employee-side plaintiffs’ attorneys to game the system,” she said.
Boston attorney John A. Mangones said the most significant aspect of the decision was Kelley’s holding that the ADEA’s statute of limitations is a substantive rather than procedural right that cannot be waived in contract.
If this decision is upheld by the [1st Circuit], the rationale would likely apply to any state or federal statute that contains an administrative remedial scheme or dispute resolution process. Thus, any contract term that has the effect of abridging a party’s ability to fully participate in those administrative processes would be void.
— John A. Mangones, Boston
In particular, he pointed to Kelley’s explanation that a plaintiff’s right to fully participate in an EEOC proceeding as set forth in the ADEA without losing the ability to later file a private arbitration is a substantive right that cannot be waived.
“If this decision is upheld by the [1st U.S. Circuit Court of Appeals], the rationale would likely apply to any state or federal statute that contains an administrative remedial scheme or dispute resolution process,” Mangones said. “Thus, any contract term that has the effect of abridging a party’s ability to fully participate in those administrative processes would be void.”
Nancy J. Puleo of Boston said the issue of whether the ADEA’s statute of limitation is a substantive or procedural issue is primed for review by the U.S. Supreme Court given a circuit split noted in the opinion.
She also described the case as a “classic Goldilocks situation.”
“Employers who utilize arbitration provisions must ensure the required arbitration filing period is ‘just right,’” Puleo said. “Employers reasonably avoid having an open-ended time period for employees and former employees to initiate arbitration of a claim. However, according to [Rumsey], that time period can be no shorter than the applicable statute of limitations for the underlying ADEA claims.”
In light of the ruling in Rumsey, employers should review their existing arbitration provisions to determine whether they are still vulnerable to arbitrable claims they may otherwise have considered time-barred, Puleo added.
Timely filing?
The plaintiff worked at IBM’s Cambridge office until his layoff in March 2016.
When he was terminated, he executed a separation agreement under which, in exchange for a month’s salary and three months of continued health and life insurance benefits, he waived all potential claims against IBM except ADEA claims or any that could not be released by private agreement.
Attached to the agreement was a provision mandating that any ADEA claims be brought individually in arbitration.
The arbitration agreement also included a timing provision stating that if the claim was one that “must first be brought before a government agency,” the plaintiff would need to file a written arbitration demand “no later than the deadline for filing such a claim.”
In July 2016, apparently believing that the arbitration agreement did not affect his administrative remedies, the plaintiff filed a discrimination charge with the EEOC, alleging that IBM discriminated against him because of his age.
The EEOC initiated an investigation into the charge as well as those made by several dozen similarly situated IBM employees.
In September 2020, the EEOC issued a determination that there was reasonable cause to believe IBM engaged in age discrimination during its RIFs between 2013 and 2018.
Rumsey v. International Business Machines Corporation
THE ISSUE: Could the statute of limitations under the federal Age Discrimination in Employment Act be contractually waived by an employee’s mandatory arbitration agreement?
DECISION: No (U.S. District Court)
LAWYERS: Joseph M. Sellers (Washington, D.C.) and Daniel H. Silverman (Boston), of Cohen, Milstein, Sellers & Toll; David G. Webbert of Johnson & Webbert, Topsham, Maine (plaintiff)
Traci L. Lovitt of Jones Day, Boston (defense)
On Aug. 27, 2021, the EEOC issued the plaintiff and other laid-off workers a notice of right to sue.
The plaintiff filed his individual arbitration demand with IBM on Nov. 23, 2021, 81 days after receiving his notice.
IBM asserted that the demand was untimely, arguing that under the timing provision, the plaintiff had only the same 300 days to bring his arbitration demand that he had to bring his agency claim.
The plaintiff subsequently filed suit in U.S. District Court seeking a declaration that the 300-day deadline in the arbitration agreement was invalid.
IBM, moving to dismiss, argued that the arbitration agreement effectively waived the ADEA’s statute of limitation and cited precedent from the 2nd U.S. Circuit Court of Appeals as support.
Substantive right
While describing IBM’s position as “initially more persuasive” due to the number of non-binding decisions in its favor, Kelley ultimately found that binding 1st Circuit precedent mandated a decision that the ADEA’s statute of limitations was a substantive right and thus the plaintiff indeed had until 90 days after receiving his right-to-sue letter from the EEOC to file his arbitration demand.
In particular, Kelley looked to the 1st Circuit’s 2007 ruling in Anderson v. Comcast Corp.
The 1st Circuit ruled in that case that the four-year statute of limitations for a Massachusetts consumer protection statute could not be shortened by the parties because of the importance the Legislature accorded to the statute for consumers.
In particular, the 1st Circuit focused on the years of revisions and progressive lengthening of the statute, reflecting a legislative concern that a longer limitations period was needed to allow consumers to effectuate their private cause of action under the statute.
Kelley noted that the ADEA was also amended several times, eventually extending the period for which a claim could be filed, and that the legislative history indicated that that was done to avoid “problems” with the law as written at the time, specifically the issue of filing suit before the EEOC completed its investigation.
She also noted that the features of the statute in Anderson paralleled the discussion of substantive rights in another case, Thompson v. Fresh Prods., LLC, in which the 6th Circuit determined that the ADEA’s statute of limitations was substantive in nature because it was necessary for conciliation and cooperation to occur.
“Both statutes include a self-contained limitations period and underwent revisions and extended filing deadlines,” Kelley said. “While the First Circuit has not labeled statutes of limitations as substantive rights — in Anderson or otherwise — this Court finds persuasive the parallel features between Thompson and Anderson. Accordingly, this Court concludes that the ADEA’s statute of limitations are substantive rights that cannot be shortened.”
Because Congress wanted to afford the full limitations period for ADEA claims, Kelley concluded, IBM’s motion to dismiss was denied.