Labor & Employment Law Daily Wrap Up, DISCRIMINATION—AGE—D. Mass.: Agreement’s 300-day deadline for filing demand to arbitrate ADEA claim was invalid, (Oct 8, 2025)

By Ursula Furi-Perry, J.D.

The ADEA’s statutory limitations period is substantive and cannot be waived or shortened by contract.

A 52-year-old former employee sued IBM after being terminated as part of a group reduction in force, claiming violation of the ADEA. The employee had signed a separation agreement mandating all ADEA claims be pursued in arbitration and prescribing a strict 300-day deadline from termination to file any arbitration demand. A federal court in Massachusetts held that the ADEA’s statutory limitations period is substantive and cannot be waived or shortened by contract. After reviewing First Circuit precedent and legislative history, the court concluded that the ADEA’s filing deadlines are integral to the statutory scheme, emphasizing that when legislatures progressively lengthen a statute of limitations, this signals intent that the period is essential to the right itself (Rumsey v. International Business Machines Corp., No. 24-CV-12187-AK (D. Mass. Sept. 30, 2025)).

Severance agreement. The employee, age 52, was terminated from his position at IBM’s Cambridge, Massachusetts, office in March 2016 as part of a group reduction in force. At termination, IBM presented him with an agreement offering severance pay and benefits in exchange for a release of claims. The agreement contained an “Arbitration Procedure and Collective Action Waiver,” mandating that all ADEA claims be pursued individually in arbitration. It also included a timing provision requiring that arbitration demands be filed within the statute of limitations prescribed by law, or if the claim required a prior administrative filing, within the deadline for that filing. IBM interpreted this to impose a strict 300-day deadline from termination to file any arbitration demand.

The employee filed an EEOC charge in July 2016 alleging age discrimination, joining over 60 other former IBM employees pursuing similar claims. After a lengthy investigation, the EEOC issued a determination in September 2020 finding reasonable cause to believe IBM had engaged in systemic age discrimination during its layoffs, noting that older workers disproportionately comprised those selected for termination.

Right to sue letter. In August 2021, the employee received a right-to-sue notice. He filed his arbitration demand in November 2021—89 days later, within the ADEA’s statutory 90-day window following receipt of the notice. IBM rejected his demand as untimely, arguing that the separation agreement required him to file by December 2016 (300 days from termination).

The employee filed suit, seeking a declaration that the contractual deadline was invalid, unconscionable, or that no agreement was formed. IBM moved to dismiss, insisting the contractual limit was enforceable and consistent with federal arbitration principles.

Conflict. The court first held that a conflict existed, as the notice of the right to sue from the EEOC came later than the initial 300-day deadline to file an EEOC charge. Furthermore, held the court, the ADEA’s statutory limitations period is substantive and cannot be waived or shortened by contract. The court first recognized a direct conflict between the ADEA’s scheme—which allows a worker 90 days after receiving an EEOC right-to-sue notice to file an action—and IBM’s contractual 300-day cutoff from termination. Under IBM’s reading, the employee would have been required to file years before the EEOC issued its notice, effectively nullifying his statutory rights, the court explained.

Competing authority. The court analyzed competing circuit authority and noted that the U.S. Supreme Court has not addressed this issue. The Second Circuit has upheld shortened ADEA deadlines as procedural and waivable, while the Sixth Circuit has treated the ADEA’s limitations period as substantive and therefore nonwaivable. After reviewing First Circuit precedent and legislative history, the court concluded that the ADEA’s filing deadlines are integral to the statutory scheme, emphasizing that when legislatures progressively lengthen a statute of limitations, this signals intent that the period is essential to the right itself. Congress extended the ADEA’s deadlines over time precisely to ensure victims of age discrimination could pursue remedies after EEOC review, the court noted, and IBM’s contractual provision undermined congressional intent.

The court further rejected IBM’s argument that the ADEA’s deadlines apply only to “civil actions” in court and not to arbitration. The judge reasoned that arbitration agreements, like any contracts, cannot waive substantive statutory rights; they merely shift the forum. Supreme Court cases such as Mitsubishi Motors and Gilmer confirm that arbitration of statutory claims is permissible only if the substantive rights remain intact. Finding no ambiguity to send to arbitration, the court exercised its authority to rule the provision invalid. The timeliness requirement in IBM’s separation agreement was severed, but the arbitration agreement otherwise remained enforceable, making the plaintiff’s arbitration demand timely.

The case is No. 24-CV-12187-AK.

Judge: Kelley, A.

Attorneys: David G. Webbert (Johnson & Webbert) for Michael W. Rumsey. Traci L. Lovitt (Jones Day) for International Business Machines Corporation.

Companies: International Business Machines Corporation

Cases: Arbitration AgeDiscrimination ContractClaims Procedure Discrimination Discharge MassachusettsNews