New Jersey Appellate Court Permits Employers to Reduce The Statute of Limitations for New Jersey Based Employment Claims Under Certain Circumstances
A New Jersey Appellate Court was presented with deciding “whether a contractual provision, contained in an employment application, by which the employee waives the two year statute of limitations applicable to claims against the employer and shortens the period for such claims to six months” is enforceable? Rodriquez v. Raymours Furniture Company, Inc., 93 A.3d 760 (App. Div. 2014). As will be explained further below, the Rodriquez decision has important implications to New Jersey employers, employees and labor attorneys. That is, because the Appellate Division permitted under certain reasonable circumstances for an employer to reduce the two year statute of limitations governing claims brought pursuant to the New Jersey Law Against Discrimination to six months.
The facts of the case were simple and not in dispute. In August, 2007, the Plaintiff approached the defendant, a retail furniture company, seeking employment. The defendant gave Mr. Rodriquez a two page employment application. Towards the bottom of the second page, in bold faced letters, it stated:
I AGREE THAT ANY CLAIM OR LAWSUIT RELATING TO MY SERVICE WITH RAYMOUR & FLANIGAN MUST BE FILED NO MORE THAN SIX (6) MONTHS AFTER THE DATE OF THE EMPLOYMENT ACTION THAT IS THE SUBJECT OF THE CLAIM OR LAWSUIT. I WAIVE ANY STATUTE OF INTERPRETATIONS TO THE CONTRARY.
Mr. Rodriquez took the application home with him. Although, Mr. Rodriguez’s primary language was Spanish, he brought the application home with him and had a bilingual friend assist him with completing the application. In other words, Mr. Rodriquez was afforded ample opportunity to review the terms and conditions set forth on the application.
Mr. Rodriquez was hired by the Defendant. Eventually, his employment was terminated. More than six months after his employment was terminated, Mr. Rodriquez filed a civil complaint in the Superior Court of New Jersey in which he alleged that he was terminated in retaliation for having filed a workers’ compensation claim and was discriminated against based upon disability, in violation of the Law Against Discrimination, N.J.S.A. 10:5-1 to -49.
After discovery was completed, the Defendant filed a motion to dismiss Plaintiff’s complaint. In Defendant’s motion for summary judgment, it asserted that because Mr. Rodriquez did not file his suit within the six month time period provided for in the employment application he executed before he was hired his claims were time barred. Defendant’s motion was granted. The Appellate Court agreed with the Trial Court.
In his appeal, Plaintiff first argued that the shorted statute of limitations period in the initial application is unconscionable and therefore unenforceable. Although, the Appellate Court found that the limitations period contained in the initial application was a contract of adhesion, the Court reason, that is the “beginning, not the end of the inquiry into whether a contract or any specific term therein, should be deemed unenforceable based upon policy considerations.” Citing, the United States Supreme Court’s decision in Order of United Comm. Travelers of Am. v. Wolfe, 331 U.S. 586, 608 (1947), along with a myriad of New Jersey State Court decisions, the Appellate Division concluded that the absence of a specific controlling statute which does not permit a statute of limitations to be reduced by contract, the parties to a contract may agree to shorten the statute of limitations, so long as the shorter period is reasonable.
First, the Appellate Court while recognizing that there is a strong public policy to protect workers’ rights, the statutes of limitations in the New Jersey Law Against Discrimination does not specifically disallow parties from agreeing to shorten the time period. Hence, the Court moved to the second part of the analysis – whether or not reducing the statute of limitations to 6 months from the termination of employment was reasonable in the context of New Jersey’s Law Against Discrimination. In performing that analysis, the Court recognized that the New Jersey Legislature selected differing statute of limitations period for different employment based claims. For example:
- There is a one year statute of limitations pursuant to New Jersey’s Conscientious Employee Protect Act (whistle blower statute) – (N.J.S.A. 34:19-5);
- There is generally a two year statute of limitations to bring a claim under the New Jersey Law Against Discrimination, but a party seeking an administrative remedy rather than filing a lawsuit must file a claim with the Division on Civil Rights within 180 days;
- There is a six month statute of limitations for an alleged unfair practice pursuant to the New Jersey Employer-Employee Relations Act (N.J.S.A. 34:13A-5.4)
Because the Court recognized that at least one employment based New Jersey statute had a six month statute of limitations, it concluded that the six month limitation contained in the employment application Mr. Rodriquez signed was reasonable.
Next, the Court considered whether or not Mr. Rodriquez agreed to the reduction. The Court considered the facts that the clause was not buried in the agreement to be extremely important. The fact that the clause was in bold faced print contained in a short agreement was important. Moreover, the fact that Mr. Rodriquez was afforded an opportunity to take the application home and review it was also important and favorable to the Defendant.
So, what can employers learn from this case:
- If reasonable, employers can reduce the statute of limitations period – a six month reduction to assert New Jersey based discrimination claims is reasonable (it may not be reasonable as to federal causes of action)
- The reduction of the statute of limitations period should be placed in bold face print. I also recommend that the prospective employee be asked to initial the clause limiting the statute of limitations period.
- When a prospective employee is hired, include in their acceptance letter a reminder that pursuant to the terms and conditions of the employment that they agreed to reduce the statute of limitations; and
- Give the prospective applicant an opportunity to review the application. Let them take the application home and submit it on another day.
Employees and labor attorneys who represent Plaintiffs should also be aware of this decision. An attorney should ask the prospective employee if they signed an agreement reducing the applicable statute of limitations. The employee should be aware if they did. This case eliminates the “one sized, fits all” analysis of statutes of limitations.